Closing a Private Limited Company

Your Pvt Ltd has been dormant for two years. There is no revenue, no team, no bank activity — but the ROC compliance bill keeps arriving every year. MGT-7, AOC-4, DIR-3 KYC, board meetings, auditor fees. You are paying upkeep on a company that no longer exists in any meaningful sense, and the late fees compound silently in the background.

Closing a Pvt Ltd is not just a switch you flip. Section 248 of the Companies Act 2013 gives you a clean RoC-administered exit through Form STK-2, but only if your filings are current, your books are at zero, and your directors are willing to indemnify. This page walks you through the FY 2026-27 process — what qualifies, what doesn't, and what the real timeline looks like.

At a Glance

• Who needs this: Pvt Ltd companies that have not carried on business for two consecutive financial years and have NIL assets and NIL liabilities at closure.
• Governing law: Section 248 of the Companies Act 2013 read with the Companies (Removal of Names of Companies from the Register of Companies) Rules 2016.
• Key form: Form STK-2 filed on the V3 MCA portal, supported by STK-3 indemnity bond, STK-4 director affidavits and STK-8 statement of accounts.
• Turnaround: 60-120 working days from a clean STK-2 filing. Add 15-30 days if pending annual filings need clearing first.
• Eligibility cut-off: No business activity for two years, no pending litigation, no listed status, no pending CSR or worker dues, no Section 8 status.
• Shareholder approval: Special resolution under Section 248(2) — 75% by paid-up capital — filed in MGT-14 within 30 days.
• Alternative route: Voluntary liquidation under Section 59 of IBC 2016 where the company has assets to distribute or liabilities to settle.

What's New for FY 2026-27

Strike off is one of the few MCA workflows that has tightened year on year. Here is what changed since FY 2024-25.

• C-PACE jurisdiction stable: The Centre for Processing Accelerated Corporate Exit at Manesar now processes all STK-2 applications nationally. Regional ROCs no longer accept these filings, which has standardised review timelines.
• STK-8 freshness rule enforced: The statement of accounts certified by a CA must be dated within 30 days of the STK-2 filing date. Older statements are returned without review — a common rejection trigger in FY 2025-26.
• V3 portal mandatory: All STK forms are now V3 web-based with linked DSC verification. The old V2 PDF flow is retired. Director and CA DSCs must be active and linked to the V3 profile before filing.
• Director KYC enforcement: DIR-3 KYC for the current and prior year must be active. A deactivated DIN automatically halts STK-2 — even a small KYC default in the closure year now blocks the filing.
• GST de-registration check: ROC cross-verifies GSTN status before STK-7. A live GST registration on the same PAN now triggers a query — cancel GST first, attach the order to STK-2.
• Form fee unchanged: Government fee for STK-2 remains ₹10,000 in addition to any pending filing fees and late charges accumulated up to the application date.

Who Should Actually Use This Route

STK-2 is the lightest exit available to a Pvt Ltd, but it is also the most restrictive. The company must look genuinely dormant on paper, not just quiet in operations.

• Two years of no business: No invoices raised, no expenses booked (other than statutory upkeep), no employees on roll, no active vendor or customer engagements during the period.
• Clean balance sheet: Assets and liabilities both at zero on the closure date. Bank balance distributed, receivables collected or written off, payables settled, share capital returned or written down.
• No litigation: No pending case in any court, tribunal, consumer forum or under any tax statute against the company or its directors in their company capacity.
• No active registrations: GST cancelled, EPFO and ESIC accounts closed where applicable, professional tax shut, shop and establishment licences surrendered.
• No unpaid statutory dues: TDS, GST, advance tax, professional tax, EPFO and ESIC dues all paid in full. The statement of accounts must show zero on every statutory head.
• Not a Section 8 company: Section 8 (not-for-profit) companies cannot use STK-2 — they must follow the surrender of licence route under Section 8(6) before any closure.
• Not under inspection: Companies under inspection, investigation or prosecution under the Companies Act, SFIO or SEBI are barred from STK-2 until proceedings end.

How It Actually Works

The closure runs in six distinct phases. Each phase has a hard dependency on the previous one finishing properly.

Step 1: Eligibility Diagnostic and Gap Audit

We start with a structured review of your last three years — financial statements, ROC filings, bank statements, tax returns, GST status, payroll history. The aim is to confirm two things: that the company is genuinely eligible under Section 248, and that there are no skeletons that will surface mid-process.

By the end of this phase you have a written closure roadmap with a list of clean-up tasks, a target STK-2 filing date, and a realistic estimate of total cost including late fees and penalties.

Step 2: Pending Compliance Clean-Up

Most defunct companies have at least one or two pending filings — usually DIR-3 KYC, MGT-7 or AOC-4 for the last operational year, or an unfiled INC-20A from incorporation. These have to be cleared with their accumulated late fees before STK-2 can move.

We also close the bank account in this phase. Any residual balance is settled by returning capital to shareholders, paying down director loans, or where small and orphaned, written off through a board resolution. The closing balance must read zero on every line.

Step 3: Board Meeting and Special Resolution

A board meeting is convened to authorise the closure and call an EGM. The EGM is then held with proper notice and a special resolution is passed under Section 248(2), requiring 75% approval by paid-up capital. For closely held companies with two or three shareholders, this is procedural; for companies with passive or absent shareholders, locating and securing signatures is often the longest step.

The special resolution is filed in MGT-14 within 30 days of being passed. Missing this 30-day window means re-doing the EGM — there is no cheap correction.

Step 4: STK-3, STK-4 and STK-8 Drafting

STK-3 is an indemnity bond signed by every director, promising to indemnify any future claimant against the struck-off company up to the value of any sums received from it. STK-4 is an affidavit by each director confirming the company has no liabilities and no pending dues. STK-8 is the statement of accounts certified by a practising Chartered Accountant.

Both STK-3 and STK-4 must be notarised on non-judicial stamp paper of the value prescribed by the state where each director is signing. STK-8 must be dated within 30 days of the STK-2 filing — older statements get rejected at C-PACE intake.

Step 5: STK-2 Filing on V3

STK-2 is filed online on the V3 MCA portal with all attachments — the special resolution, MGT-14 acknowledgement, STK-3, STK-4, STK-8, bank closure certificate, GST cancellation order if applicable, and director consents. Government fee of ₹10,000 is paid online and an SRN is generated.

From this point on, the file sits at C-PACE for examination. Any query raised must be answered within the time stipulated in the resubmission notice, typically 15 days.

Step 6: Public Notice and Final Strike Off

If C-PACE accepts the application, the ROC publishes Form STK-6 — a public notice on the MCA portal and in the Official Gazette — inviting objections from any person within 30 days. In parallel, the notice is sent to the Income Tax Department, GST authority and other regulators for a no-objection check.

If no objection is received within the 30-day window, Form STK-7 is issued and the company's name is struck off the Register of Companies. The company stands dissolved from the date of STK-7.

A Real Example: A Dormant Consulting Pvt Ltd

Take a closely held Pvt Ltd incorporated in 2019 with two directors, authorised capital ₹10 lakh, paid up ₹1 lakh, last invoice raised in March 2024.

• Starting position: MGT-7 and AOC-4 for FY 2024-25 unfiled; DIR-3 KYC pending for both directors; ₹47,000 in the current account; GST registration still live with NIL returns.
• Clean-up cost: MGT-7 and AOC-4 late fees ~₹15,000; DIR-3 KYC late fee ₹5,000 per director; GST cancellation filing — covered under retainer; bank balance distributed to shareholders as return of capital.
• Closure documentation: Board resolution and EGM held in week 4; MGT-14 filed in week 5; STK-3, STK-4 notarised in week 6; STK-8 drawn with closing balance sheet showing all zeros; STK-2 filed in week 7.
• Government and statutory fees: STK-2 fee ₹10,000, MGT-14 fee ₹600, ROC late filing charges ~₹20,000, notarisation and stamp duty ~₹2,000.
• Outcome: C-PACE accepted the file in week 11; STK-6 public notice published in week 12; no objections received; STK-7 issued in week 18 — total elapsed time approximately four months.

The total professional and statutory outlay landed around ₹52,000 — significantly less than another two years of compliance upkeep on a non-operating company.

When STK-2 Will Not Fit — and What to Do

Not every company can take the simple exit. Where assets exist, liabilities remain, or members disagree, you need a different route.

• Voluntary liquidation under Section 59 IBC: Used where the company has assets to realise and distribute, or liabilities to settle in an orderly way. An Insolvency Professional is appointed, NCLT supervises, and the process runs 9-15 months.
• Compulsory winding up: Initiated by NCLT on grounds of insolvency, default in statutory dues, or actions against public interest. Director-led closure is no longer possible once this starts.
• Dormant status under Section 455: A halfway house. Where the company expects to revive within five years, it can file MSC-1 to be marked dormant — reduced compliance, no closure.
• Merger or amalgamation: Where two related companies are being collapsed, a Section 233 fast-track merger may be a cleaner exit than two parallel strike-offs.
• Foreign subsidiary closure: Indian subsidiaries of foreign companies must additionally close their FEMA filings (FC-GPR, FC-TRS history reconciliation) and produce a CA certificate confirming no pending RBI reporting before STK-2.

Picking the wrong closure route does not just delay the exit — it can disqualify directors and trigger personal liability. The route decision should always come before any paperwork.

Where Strike Off Goes Wrong

These are the most common reasons C-PACE rejects or queries an STK-2 application.

• Stale statement of accounts: STK-8 dated more than 30 days before STK-2 filing. Re-certification by the CA is needed before re-filing.
• Missed MGT-14: Special resolution not filed in MGT-14 within 30 days. The EGM has to be re-convened and the resolution passed afresh.
• Live GST or PT registration: Active registration on the same PAN triggers an automatic query. Cancel GST first and attach the cancellation order to the STK-2 set.
• DIN deactivation: DIR-3 KYC default in the closure year deactivates DIN and halts STK-2. Reactivate first with late fee, then proceed.
• Hidden liability discovered post-filing: Trade payable, statutory due or director loan surfaces during C-PACE review. The application is rejected and the indemnity bond becomes a real exposure.
• Section 164(2) trap: Three consecutive years of MGT-7 / AOC-4 default before strike off triggers automatic 5-year DIN disqualification under Section 164(2) — even if closure proceeds. Clearing filings before STK-2 is the only defence.
• Bank account left open: Banks now require an STK-7 to close zero-balance accounts. A small dormancy fee accumulating in the background can leave a residual balance that contradicts the STK-8 statement.

What You Receive at the End

• Eligibility opinion and closure roadmap covering route choice, timeline and total outlay
• Cleared pending ROC filings — MGT-7, AOC-4, DIR-3 KYC, INC-20A — with payment acknowledgements
• Board minutes, EGM notice, special resolution and MGT-14 filing acknowledgement
• STK-3 indemnity bond and STK-4 director affidavits, notarised on appropriate stamp paper
• STK-8 statement of accounts certified by a practising Chartered Accountant
• Bank closure certificate and GST cancellation order where applicable
• STK-2 application acknowledgement and SRN tracker
• STK-6 public notice copy and 30-day objection-window monitoring
• STK-7 final strike-off order issued by C-PACE
• Closure file pack — full record retained for seven years for any future regulatory query

How to Get Started

Share three things to begin: your Certificate of Incorporation, the last filed MGT-7 and AOC-4, and a current bank statement of the company. Within three working days we will issue a written eligibility opinion telling you whether STK-2 fits, what clean-up is needed first, and what the realistic total cost and timeline will be.

If STK-2 is not the right route, the same opinion will recommend voluntary liquidation, dormant status or another option with the same level of clarity. Either way, you walk into the closure decision with full visibility rather than discovering issues mid-process.