Strike Off a Private Limited Company in India

1. What is Strike Off?

Strike Off means removing a company’s name from the Register of Companies (ROC), making it legally non-existent. A company can be voluntarily closed by its directors or compulsorily removed by the Registrar of Companies (ROC).

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2. Modes of Strike Off

Mode	Description	Applicable Law
Voluntary Strike Off (By Company)	The company applies for closure due to inactivity.	Section 248(2) of Companies Act, 2013
Compulsory Strike Off (By ROC)	ROC removes the company due to non-compliance.	Section 248(1) of Companies Act, 2013

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3. Eligibility for Voluntary Strike Off

A company can apply for strike-off if:
✅ It has no assets or liabilities.
✅ It has not commenced business within 1 year of incorporation.
✅ It has not carried out business for 2 consecutive financial years.
✅ It has no pending legal cases.

🚫 Not Eligible for Strike Off If:
❌ It has pending loans, liabilities, or dues.
❌ It is under investigation by any government authority.
❌ It has any active contracts or transactions.

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4. Procedure for Voluntary Strike Off (Section 248(2))

Step 1: Board Resolution

🔹 Hold a Board Meeting to approve the closure.
🔹 Pass a resolution for strike-off and appointment of an authorized director.

Step 2: Shareholder Approval (Special Resolution)

🔹 Conduct a General Meeting and pass a Special Resolution (with 75% shareholder approval).
🔹 File MGT-14 (for special resolution) with ROC within 30 days.

Step 3: Settle All Liabilities

🔹 Ensure all taxes, loans, and statutory dues are cleared.
🔹 Close all bank accounts and obtain a No Objection Certificate (NOC) from banks.

Step 4: File Form STK-2 (Application for Strike Off)

🔹 File Form STK-2 with the following attachments:
✅ Indemnity Bond (STK-3) signed by all directors.
✅ Affidavit (STK-4) from all directors.
✅ Statement of Accounts (certified by CA, not older than 30 days).
✅ Special Resolution copy (MGT-14 acknowledgment).
✅ PAN, Aadhaar, and other KYC details of directors.

💰 Government Fee for STK-2: ₹10,000

Step 5: ROC Verification & Strike Off Approval

🔹 ROC will examine the application and publish a notice in:
✅ MCA Website
✅ Official Gazette
🔹 If no objections are raised within 30 days, the company is struck off.

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5. Compulsory Strike Off by ROC (Section 248(1))

Reasons for Compulsory Strike Off

🚨 ROC may strike off a company if:
❌ It fails to commence business within 1 year of incorporation.
❌ It has not filed Annual Returns (MGT-7) or Financial Statements (AOC-4) for 2 consecutive years.
❌ The directors are disqualified (Section 164).
❌ The company is suspected of fraudulent activities.

Process of Compulsory Strike Off

1️⃣ ROC sends a Notice (STK-1) to the company and directors.
2️⃣ The company gets 30 days to respond with reasons for non-compliance.
3️⃣ If no response is received, ROC issues Public Notice (STK-5 & STK-6).
4️⃣ After 30 days, ROC removes the company’s name and updates the MCA database.

🚨 Effect of Compulsory Strike Off
🔹 Directors cannot form a new company for 5 years.
🔹 Assets of the company go to the government (under Section 250).
🔹 Any pending liabilities remain enforceable on directors.

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6. Post-Strike Off Compliance

✅ Company cannot conduct business after strike-off.
✅ Directors remain liable for past transactions.
✅ Revival is possible within 20 years by applying to NCLT (National Company Law Tribunal).

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7. Forms & Timelines

Form	Purpose	Timeline
MGT-14	Special Resolution filing	Within 30 days of passing resolution
STK-2	Application for voluntary strike-off	Any time after eligibility
STK-3	Indemnity Bond by Directors	Along with STK-2
STK-4	Affidavit by Directors	Along with STK-2
STK-5 & STK-6	ROC Public Notice for Strike Off	30 days before removal

FAQs on Strike Off

Final Summary

🔹 Voluntary Strike Off (STK-2) → If company is inactive & debt-free.
🔹 Compulsory Strike Off (STK-1 & STK-5) → If company fails compliance.
🔹 Directors remain liable even after strike-off.
🔹 Company revival possible within 20 years through NCLT.