A company you no longer use still needs annual filings — and still attracts penalties if they are missed. If the company has no future, closing it properly is usually the cheapest option. There are two main routes.
Strike-off (Section 248)
A company that has not carried on business for the previous two financial years, or did not commence business within a year of incorporation, can apply to the Registrar to have its name removed, using Form STK-2.
- Suits dormant companies with no assets and no liabilities.
- Requires a special resolution (or the consent of 75% of members by paid-up capital), indemnity bonds and a statement of accounts.
- Relatively quick and inexpensive.
Voluntary winding-up
A solvent company that still has assets or liabilities to settle is usually closed through a voluntary liquidation under the Insolvency and Bankruptcy Code, 2016.
- Suits companies that need to realise assets and pay off creditors.
- A liquidator is appointed; the process ends with an order of the NCLT.
- Takes longer and costs more, but deals with everything formally.
How to choose
If the company has no assets, no liabilities and no pending matters, a strike-off is usually the right answer. If it has money in the bank, property, loans or claims to settle, a formal winding-up is safer.
Before either route, pending annual filings generally need to be brought up to date. Our advisory team can review your situation and recommend the cleaner route.
This article is general information, not legal advice. Rules and due dates change — please confirm the current position before acting, or ask us.