Close it properly — because a dormant entity keeps accruing penalties and disqualifies its directors.
An entity that has stopped trading does not stop filing. Annual returns remain due, additional fees accrue at ₹100 per day per form without a cap, and after three years of continuous default the directors are disqualified under Section 164(2) — which bars them from being a director in any other company for five years. Closing a dormant company is almost always cheaper than leaving it alone, and considerably cheaper than being struck off by the Registrar on his own motion.
Company strike off under Section 248
A company can apply to have its name removed from the register in Form STK-2 where it has not commenced business within a year of incorporation, or has not carried on any business for two immediately preceding financial years without applying for dormant status.
Requirement
Detail
Assets and liabilities
Nil. All liabilities discharged before the application; a statement of accounts not older than 30 days certified by a chartered accountant
Bank account
Closed, with the bank's closure certificate
Pending filings
All overdue AOC-4 and MGT-7 filings brought up to date before STK-2 is accepted
Resolution
Special resolution or consent of 75% of members by paid-up capital, filed in MGT-14
Affidavits
Form STK-3 indemnity bond and STK-4 affidavit from every director
Government fee
₹10,000 for STK-2
Some companies cannot use this route. Strike off is unavailable where the company has changed its name or shifted its registered office out of the state in the preceding three months, has made a disposal of property or rights held for gain, has engaged in any activity other than that necessary for closing, or has an application for compromise or arrangement pending. Companies with unpaid statutory dues or pending litigation must resolve those first.
The process
Clean-up. All pending annual filings completed, statutory dues settled, and the bank account closed.
Board and members' approval. Board resolution, then a special resolution or consent of 75% of members, with MGT-14 filed.
Closure accounts. Statement of accounts as at a date not more than 30 days before the application, certified by a chartered accountant.
STK-2 filed with STK-3 indemnity bonds and STK-4 affidavits from all directors, the special resolution and the closure accounts.
Public notice. The Registrar publishes the proposed strike off in STK-5 and STK-6 for objections, and the name is struck off and notified in STK-7 if none are received. The overall timeline typically runs three to six months.
LLP closure under Form 24
Available where the LLP has ceased commercial operations, or has not commenced business since incorporation
All partners must consent, and the LLP must have no creditors — a statement of account with nil assets and liabilities, certified by a chartered accountant and not older than 30 days, is required
Overdue Form 8 and Form 11 filings must be completed up to the end of the financial year in which the LLP ceased operations
Affidavits and indemnity from all designated partners, and the income tax return for the latest financial year where one was filed
Where the LLP agreement was never filed after incorporation, that filing has to be regularised first — a common blocker for LLPs incorporated and then abandoned
Dormant status — the alternative
Where the entity might be revived later, applying for dormant company status under Section 455 in Form MSC-1 is worth considering. A dormant company files a much lighter annual return in MSC-3 and holds fewer board meetings, and it can be reactivated in MSC-4 when business resumes. It is the right answer for a company holding an asset or a name you want to preserve, and the wrong answer for one that is simply finished.
What closure does not erase
Striking off does not extinguish liabilities that existed at the time. Directors and members remain liable as if the company had not been dissolved, and the Registrar or the National Company Law Tribunal can restore a struck-off company within the statutory period on an application by an aggrieved person or the Registrar. Income tax and GST assessments for earlier years survive too, so surrender the GST registration and file GSTR-10 as part of the closure rather than after it.
Frequently asked questions
File the overdue annual returns. Strike off is not available while filings are pending, and the additional fee accrues until they are filed, so delaying makes it worse rather than better. Check whether the directors have already been disqualified under Section 164(2), because that changes the sequence and may require an application to the tribunal.
No. Strike off requires nil liabilities, and lenders routinely object to the public notice. The loan must be settled and a no dues certificate obtained, or the entity taken through a formal winding up or insolvency process instead.
Typically three to six months from filing STK-2, driven by the public notice period and the Registrar's processing. Bringing pending filings up to date beforehand often takes longer than the strike off itself.
No. Suo motu strike off by the Registrar leaves the directors disqualified for five years and the default on the public record, and it does not clear the accumulated additional fees if the company is later restored. Voluntary closure costs money once; involuntary strike off costs the directors their ability to run other companies.