How to Close a Private Limited Company in India

Not every business works out, and sometimes founders move on. An inactive company still has to file annual returns and pay fees – so if you do not plan to use it, closing it properly is the smart choice. Here are the options.

Why not just leave it inactive?

• Annual filings continue, and late fees build up every day.
• Directors can be disqualified if filings are missed for three years.
• The ROC may strike off the company on its own, with consequences for directors.

Option 1: Strike off (STK-2)

This is the simplest route for companies with no business and no liabilities. It is available when the company:

• Has not carried on business for a continuous period (as specified in the Act), or has not started business since incorporation; and
• Has no assets or liabilities, or they have been settled.

Steps usually include clearing pending filings, closing the bank account, passing a special resolution, preparing a statement of accounts certified by a chartered accountant, and filing STK-2 with indemnity bonds and affidavits from directors.

Option 2: Voluntary winding up

If the company has assets to sell or creditors to pay, it is wound up voluntarily under the Insolvency and Bankruptcy Code. A liquidator is appointed to settle debts and distribute any surplus to shareholders. This takes longer but is the correct route for companies with active assets and liabilities.

Before applying

• File any pending AOC-4 and MGT-7 returns, as required.
• Surrender or cancel GST registration and other licences.
• Close the bank account and settle all dues.

After the strike off

Once the ROC publishes the notice and approves the application, the company’s name is removed from the register and it stands dissolved.

Close your company the right way with our company closure service. For GST, see GST cancellation.

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Frequently Asked Questions

Q1. Can a company with pending liabilities be struck off?

No. Liabilities must be settled, or the company should use voluntary winding up.

Q2. How long does strike off take?

Usually a few months after filing STK-2, depending on the ROC.

Q3. Can a struck-off company be revived?

Yes, in some cases, through an application to the NCLT within the time allowed.

Q4. Is a bank account closure needed before strike off?

Yes. The company's bank account should be closed as part of the process.