How to close a Private Limited Company in India

Last updated 22 May 2026

A startup that never launched — a common situation

Consider a two-founder software startup incorporated in Pune in 2021. They raised a small friends-and-family round, opened a current account, but the product never gained traction. By 2023, both founders had moved on to salaried roles. The company sat dormant — no revenue, no employees, no active contracts. The bank account still had a small balance. The founders wanted to formally close the company but had no idea where to start.

This is one of the most common scenarios Shunya's CA team handles. The process is straightforward when you know the rules — and avoidable complications arise when you don't.

Eligibility: can your company apply for strike off?

Under Section 248(2) of the Companies Act 2013, directors can voluntarily apply to the ROC to strike off the company. Two conditions must be met. First, the company must either have never commenced business since incorporation, or must have ceased to carry on business for a period of two or more immediately preceding years. Second, the company must have no pending liabilities — no outstanding loans, no unpaid vendor dues, no GST or income tax arrears, and no pending litigation.

A company cannot file STK-2 if it has recently been involved in a significant transaction — MCA rules bar filing within three months of certain actions like changing the registered office, making a capital call, changing the nature of business, or filing a change in directors. If any of these apply, you must wait out the three-month window before applying.

Step 1 — hold a board meeting and pass a resolution

The process begins with a board meeting of all directors. The resolution must specifically approve: (a) the closure of the company, (b) the authorisation of one director to sign and file Form STK-2, and (c) the indemnity bond and affidavit as required. All directors must sign the resolution. The signed, dated board resolution becomes a mandatory attachment to the STK-2 form.

Step 2 — prepare the documents

Before logging into MCA21, assemble the complete document set. This includes the board resolution, an indemnity bond executed by all directors on stamp paper (value varies by state, typically Rs 100, notarised), an affidavit sworn by each director, a statement of accounts certified by a practising CA (prepared within 30 days of filing), and a bank account closure certificate confirming the company's bank account has been closed with a nil balance. If the company filed GST returns, you will also need a GST cancellation certificate or a no-dues confirmation.

Step 3 — file STK-2 on MCA21

The authorised director logs into the MCA21 portal and files Form STK-2 with the digital signature certificate (DSC) of the authorised director and at least one other director. The form requires the CIN (Company Identification Number), registered office address, and the reason for closure. All attachments must be uploaded as PDF files. As of 2024, the government fee for filing STK-2 is Rs 10,000 for companies with paid-up capital up to Rs 1 lakh, with a graduated scale above that.

Step 4 — ROC acknowledgement and public notice

After filing, the ROC issues a Service Request Number (SRN). The ROC then reviews the application and, if found in order, publishes a public notice in the Official Gazette inviting objections from creditors or other interested parties. This public notice period is 30 days. During this window, any creditor or regulatory authority can object to the strike off.

Step 5 — ROC review and queries

After the public notice period closes, the ROC reviews the application. In straightforward cases with no objections and clean filings, the ROC proceeds to issue the strike off order. However, the ROC may raise queries — typically about pending annual returns, discrepancies in the statement of accounts, or questions about old bank transactions. Responding to these queries promptly is critical to avoid the application being marked as abandoned.

Step 6 — gazette notification and strike off

Once satisfied, the ROC publishes the name of the company in the Official Gazette notifying its strike off. From the date of this notification, the company ceases to exist as a legal entity. Directors receive confirmation via email to their registered MCA accounts. It is advisable to retain all company records (minutes books, financial statements, filed returns) for at least eight years after strike off — the Income Tax department can still issue notices for past periods.

Common reasons for rejection

The most frequent causes of STK-2 rejection include: pending annual returns (Form AOC-4 and MGT-7) for prior years, an active bank account not yet closed, a pending income tax demand or notice, a GST registration that has not been formally cancelled, directors with deactivated DINs, and mismatches between the statement of accounts and the last filed balance sheet. Clearing all of these before filing significantly improves the chances of a clean, query-free approval.

What directors must do after strike off

After the gazette notification, directors should retain copies of the strike off order and all filed documents. The company's PAN becomes inactive, and the bank account (which must already be closed) no longer operates. Directors remain personally liable for any liabilities of the struck-off company that were not disclosed at the time of filing — this is the reason the indemnity bond exists. If any liability surfaces after strike off, the ROC has powers to restore the company to the register to deal with it.

Timeline summary

From the day you begin gathering documents to the date of gazette notification, a clean strike off typically takes three to four months. Applications with pending annual returns, ROC queries, or GST complications can take six months or more. The public notice period alone accounts for 30 days, and ROC processing time after the notice period varies significantly by jurisdiction — some ROC offices are faster than others.

This article is for general information only. For your specific situation, consult a practicing CA.