Striking off names of company

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Striking off names of company

A company that has stopped operating can exit the MCA register cleanly by filing Form STK-2 under Section 248(2) of the Companies Act, 2013. Since 2024, every STK-2 application — regardless of where the registered office sits — is processed centrally by C-PACE (Centre for Processing Accelerated Corporate Exit) at IICA, Manesar. A complete, well-prepared application typically receives the final dissolution order in Form STK-7 within 90–120 days. Companies with pending annual returns, active GST registrations, unsatisfied charges, or unpaid statutory dues face rejection, queries, and — in the worst case — director disqualification.

What Section 248 of the Companies Act, 2013 actually says

Section 248 creates two distinct tracks for removing a company's name from the Register.

Section 248(1) — Suo motu strike off by the Registrar of Companies (RoC): The RoC may initiate removal if it has reasonable cause to believe that the company has not commenced business within one year of incorporation, or has not carried on any business or operation for two immediately preceding financial years and has not applied for dormant company status under Section 455. The RoC issues a notice in Form STK-1 giving the company 30 days to respond. Silence or an inadequate reply leads to the company being struck off without its consent — and with consequences that voluntary strike off avoids.

Section 248(2) — Voluntary application: A company that has genuinely ceased operations may proactively file Form STK-2, backed by a special resolution or written consent of members holding at least 75% of paid-up capital in value. This is the preferred route: it is faster, more transparent, and leaves directors with a clean record provided all pre-conditions are met.

The practical difference is significant. A suo motu strike off is a regulatory enforcement action; a clean STK-2 is an orderly closure. Directors who allow the company to drift into suo motu territory lose control of the timeline and expose themselves to Section 164(2) disqualification.

Who qualifies — and who does not — for voluntary strike off

Before investing any time in document preparation, verify eligibility against the bars in Section 248 and Rule 4 of the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016.

Your company CAN apply if:

• It is a private limited company or an unlisted public company
• It has not commenced business since incorporation, or it has genuinely ceased all business operations
• All charges are satisfied and reflected on the MCA V3 portal
• All statutory dues — Income Tax, GST, PF, ESI — are cleared
• No pending litigation exists in the company's name

Your company CANNOT apply if any of the following apply:

1. It is a listed company on any recognised stock exchange
2. In the three months immediately preceding the application date, it has changed its name, shifted its registered office between states, disposed of any property or rights (otherwise than in the ordinary course of business), or engaged in any activity other than what is necessary for pursuing the strike off application itself
3. It is subject to inspection, investigation, or pending prosecution under any law
4. It has accepted public deposits that remain outstanding or unrepaid
5. It has any subsisting charge registered with MCA that has not been formally satisfied via Form CHG-4
6. It has applied for or is party to a scheme of arrangement under Section 230

The three-month restriction catches more companies than any other bar. A director who transfers a company vehicle to himself, repays a director loan, or distributes assets within 90 days of the target filing date triggers this bar — even if the intent was to clean up the company's balance sheet. Plan all asset disposals at least 90 days in advance.

C-PACE: how the centralised exit window works

C-PACE was set up to eliminate the inconsistency and delays that plagued RoC-level processing of STK-2 applications. Its mandate is simple: one office, uniform standards, faster disposal.

The C-PACE process, step by step:

1. The company files Form STK-2 electronically on the MCA V3 portal (www.mca.gov.in), digitally signed by all directors and certified by a practising CA, CS, or Cost Accountant
2. C-PACE reviews the application and supporting documents for completeness
3. If the documents pass scrutiny, C-PACE publishes a public notice in Form STK-5 in the Official Gazette and on the MCA website, inviting objections within 30 days
4. The company simultaneously publishes its own notice in Form STK-6 in a newspaper circulating in the district of the registered office
5. C-PACE sends formal intimations to the Income Tax Department, GST authorities, and SEBI (if the company has previously issued securities to the public)
6. After the 30-day objection window closes without valid objections, C-PACE issues the final dissolution order in Form STK-7
7. Form STK-7 is published in the Official Gazette, and the company's name is removed

A complete, deficiency-free STK-2 typically completes this cycle in 90–120 days. Applications returned for documents or with objections lodged can take 150–180 days or longer.

Documents you must file with Form STK-2

The documentary package under the amended Rules is more demanding than the earlier regime. Every item below is mandatory; a single missing document results in the application being marked deficient.

Company-level documents:

• Board resolution authorising the strike off application
• Special resolution or written consent from members holding ≥ 75% of paid-up capital in value
• Certified copy of the latest audited financial statements, or a Statement of Accounts in Form STK-8 prepared not earlier than 30 days before the STK-2 filing date, certified by a Chartered Accountant in practice
• Statement confirming nil pending litigation
• Copy of the company's PAN
• Details of any Income Tax refund due (must be surrendered or applied for before filing)

Director-level documents (required from every director individually):

• Indemnity Bond in Form STK-3, executed on non-judicial stamp paper of the value prescribed in your state (verify the current schedule — stamp duty varies: Rs. 500 in Maharashtra, Rs. 200 in Delhi as general reference; confirm before purchase)
• Affidavit in Form STK-4, sworn before a Notary Public or a Magistrate of First Class, declaring that the company has no liabilities and that the director accepts personal liability for any undisclosed liability that surfaces post-strike off
• Copy of PAN and a recent passport-size photograph

Regulator NOCs (where applicable):

• RBI — if the company holds an NBFC registration, money changer licence, or authorised dealer certificate
• SEBI — if the company has acted as a stockbroker, investment adviser, or portfolio manager
• IRDAI / PFRDA — if the company holds an insurance or pension-related licence

The STK-8 Statement of Accounts is the document most frequently prepared incorrectly. It must reflect nil or fully explained liabilities, and the certification must come from a CA in practice — not the company's internal accountant or bookkeeper. The 30-day freshness requirement is a hard condition; if filing is delayed, you must prepare a fresh STK-8.

Step-by-step preparation: the 90-day runway before filing

A deficient STK-2 wastes months. The sequence below reflects what a practitioner would advise a client preparing for a clean exit.

1. Audit all pending MCA filings (Week 1) Log into MCA V3 and pull the filing history for every financial year since incorporation. List every overdue Form AOC-4 (financial statements) and Form MGT-7 or MGT-7A (annual return). Also verify DIR-3 KYC status for all directors — a deactivated DIN (DIR-3 KYC overdue past 30 September) will block STK-2 signing. File DIR-3 KYC if overdue.

2. File all overdue returns with additional fees (Weeks 1–4) There is no waiver of additional fees under Section 403 except during a government amnesty scheme — check the MCA portal for any current scheme before filing. File every pending AOC-4 and MGT-7A/MGT-7. The fee is Rs. 100 per day per form, with no prescribed upper cap for these forms under the current fee schedule.

3. Cancel GST registration and clear Income Tax (Weeks 2–8) Apply for GST registration cancellation in Form GST REG-16 on the GST portal (www.gst.gov.in). The proper officer issues the cancellation in Form GST REG-19 after verifying pending returns and liabilities. C-PACE checks GST registration status; an active registration signals ongoing business and will trigger a query. File all pending ITRs and pay outstanding demand with interest under Sections 234A/234B/234C of the Income-tax Act, 1961.

4. Satisfy all charges and file CHG-4 (Weeks 2–6) Every charge registered with MCA must be formally satisfied. File Form CHG-4 for each satisfied charge. Wait until the MCA V3 portal reflects the satisfaction before filing STK-2 — the portal status is what C-PACE sees, not your internal records.

5. Settle PF, ESI, and labour dues (Weeks 2–8) If the company had any employees, obtain PF settlement confirmations linked to UANs. File all pending TDS/TCS returns on the TRACES/TIN-NSDL portal and clear outstanding challan demands.

6. Close bank accounts and distribute residual assets (Weeks 4–10) Obtain a bank account closure certificate in writing. Any remaining balance after settling all dues must be distributed among shareholders before filing. An open current account creates the appearance of ongoing operations.

7. Pass resolutions, execute STK-3 and STK-4, and prepare STK-8 (Weeks 10–12) Only after the above steps are complete should you convene the board meeting and circulate the special resolution. Execute indemnity bonds and affidavits for all directors, and commission the CA-certified STK-8. Keep the STK-8 date within 30 days of your planned STK-2 submission.

Worked example: the real cost of waiting

Scenario: Apex Infraservices Private Limited was incorporated in November 2019 with two directors, Rohan and Sunita. The company won no contracts and stopped all operations by March 2021. Neither director took action, assuming an inactive company was harmless.

Situation as at May 2026 — overdue filings and approximate additional fees:

Delays calculated from respective due dates to 23 May 2026. Fees computed at Rs. 100 per day per form under Section 403 read with the Companies (Registration Offices and Fees) Rules, 2014.

Beyond the Rs. 8.8 lakh in additional filing fees, Rohan and Sunita face director disqualification under Section 164(2)(a) — triggered automatically when a company fails to file financial statements or annual returns for three or more consecutive financial years. This five-year disqualification bars them from being appointed or continuing as director in any company, not just Apex Infraservices.

What a timely exit would have cost: Had Rohan and Sunita filed nil AOC-4 and MGT-7A for FY 2021-22 (within due date) and submitted STK-2 in early 2022, total government fees would have been under Rs. 5,000, with modest professional costs. The inaction multiplied their liability by roughly 175 times.

Suo motu strike off and Section 12(9) physical verification

Where a company fails to act, the RoC does not wait indefinitely.

Suo motu process under Section 248(1): The RoC sends notice in Form STK-1 to the company and all directors at their registered addresses. If the company does not respond within 30 days, the RoC publishes a notice in Form STK-5 in the Official Gazette. After the notice period, the company is struck off and Form STK-7 is published. Critically, the company has no say in the process, and directors lose the protection of the Form STK-3 / STK-4 framework.

Physical verification under Section 12(9): Amendments in 2022 empowered RoCs to physically verify registered offices. If an RoC officer visits and finds no company signage, no activity, or a non-existent address, the RoC can initiate accelerated strike off action and recommend disqualification of directors under Section 164(2). Companies using a CA's or CS's office as their registered address — particularly if the professional has moved — should verify that the address is still responsive and file Form INC-22 proactively to update it if needed.

Physical verification reports are shared with the Central Government and can trigger action beyond mere strike off, including prosecution for Section 12 violations.

Common mistakes that get STK-2 applications rejected

1. Filing with an active GST registration C-PACE's checks include GST registration status. An active registration implies ongoing business. Obtain the cancellation order (Form GST REG-19) before filing.

2. STK-8 Statement of Accounts aged beyond 30 days at the time of filing This is an absolute condition, not a guideline. Prepare the STK-8 as close to the filing date as possible and do not allow it to stale.

3. Indemnity bond on wrong or insufficient stamp paper Stamp duty schedules vary by state and change with finance acts. Executing Form STK-3 on inadequate stamp paper makes the bond legally deficient. Confirm the current value in your state before purchase.

4. Subsisting charges still appearing on MCA V3 The portal status is the only status that matters to C-PACE. A charge may be economically settled but legally subsisting until CHG-4 is processed. Wait for portal confirmation before filing STK-2.

5. DIR-3 KYC not filed for one or more directors A director whose DIN is deactivated (DIR-3 KYC overdue past 30 September) cannot validly sign STK-2 or its attachments. File DIR-3 KYC, restore the DIN, and then proceed.

6. Written consent representing less than 75% in value If a special resolution is not passed and written consent is used instead, verify that the signatories hold at least 75% of paid-up share capital in value. Three out of five shareholders does not equal 75% in value if the shareholding is unequal.

7. Asset disposal within the three-month window Returning a director loan, distributing a company laptop, or transferring any asset — even to settle a legitimate liability — within 90 days of the planned STK-2 date triggers the Section 248 bar. Schedule these transactions at least three months before filing.

Restoration under Section 252: what happens if the company comes back

Striking off is reversible, which is why a clean exit matters.

Who can seek restoration:

• The company itself, any member, creditor, or workman aggrieved by the strike off can apply to the National Company Law Tribunal (NCLT) within 20 years of the date of publication of Form STK-7 in the Official Gazette
• The RoC may apply to the NCLT within three years if the strike off was made on an incorrect or erroneous basis

Effect of NCLT restoration: When the NCLT restores the company, it is deemed to have existed continuously — as if its name was never removed. This means every liability that arose during the gap period revives in full: Income Tax demands, GST dues, creditor claims, employee arrears. Directors who acted in the company's name during the gap period (assuming it was active) may face personal liability for transactions entered into without corporate authority.

For promoters, this underscores why a clean STK-2 — with nil liabilities, closed bank accounts, cancelled GST registrations, and Form STK-3 indemnity bonds properly executed — is the only reliable way to ensure the company stays struck off.

Key takeaways

• Act before the RoC does. A voluntary STK-2 processed through C-PACE closes the company on your terms. A suo motu STK-1 removes that control and can trigger Section 164(2) disqualification.
• C-PACE has standardised processing. The location of your registered office no longer determines which RoC handles your file or how fast it moves. A complete application moves uniformly.
• The 3-month look-back is a hard bar. No asset transfer, name change, or registered office shift within 90 days of the planned filing date — plan well in advance.
• Late filing fees compound fast. At Rs. 100 per day per form, missing AOC-4 and MGT-7 for five years can cost Rs. 8–9 lakh in additional fees alone, on top of disqualification risk for every director.
• Three prerequisites kill the most applications: active GST registration, unsatisfied charges on MCA V3, and overdue DIR-3 KYC. Resolve all three before the rest of the process begins.
• Section 252 gives aggrieved parties 20 years to restore the company. Only a genuinely nil-liability, fully-documented exit protects promoters from future restoration applications and revived claims.
• Start the preparatory runway at least 90 days before your target filing date — not because C-PACE is slow, but because GST cancellations, CHG-4 processing, and DIR-3 KYC restoration each take time that cannot be compressed.