Closing a Private Limited Company

Closing a Private Limited Company in India is not the simple act that founders sometimes assume. A Pvt Ltd is a creature of statute — it was created by a filing with the Registrar of Companies (RoC), and it can only be ended by another statutory process. Until that process completes, the company continues to be a live legal person — accruing annual filing obligations (MGT-7, AOC-4), director KYC obligations (DIR-3 KYC), income tax return obligations, and exposure to penalties under Section 164(2) (director disqualification for 5 years) and Section 248(6) (strike-off without notice). Founders who simply 'stopped operating' a company three years ago are routinely sitting on ₹3-5 lakh of accumulated penalties and disqualified DINs.

By 2026, there are two principal lawful exit routes for a defunct or non-operating Pvt Ltd. Strike Off under Section 248 of the Companies Act 2013, read with the Companies (Removal of Names of Companies from the Register of Companies) Rules 2016, executed via Form STK-2 filed with the RoC — appropriate where the company has no business for the immediately preceding 2 financial years and no significant assets / liabilities. Voluntary Liquidation under Section 59 of the Insolvency and Bankruptcy Code 2016 (read with Section 271 reference) — appropriate where the company has assets / liabilities to be settled, requiring an Insolvency Professional and a longer NCLT-supervised process. For most non-operating closely held Pvt Ltds, the STK-2 route is the practical choice.

We close Pvt Ltd companies end-to-end — eligibility diagnostic, pending compliance clean-up, board and shareholder resolutions, statement of accounts, affidavits and indemnity bonds, STK-2 filing, ROC objection-window management, and final removal of name from the register.

Section 248 Strike Off — Eligibility & Conditions

• No Business for 2 Years:: The company must not have carried on any business or operation for the immediately preceding 2 financial years and must not have applied for the status of dormant company.

• No Assets / Liabilities:: As of the date of the application, the company should have no assets and no liabilities. Any pending bank balance must be transferred out, debtors collected, creditors paid, and the bank account closed before STK-2.

• Pending Compliance Cleared:: All annual filings (MGT-7, AOC-4) due up to the relevant year must be filed; all overdue ITRs filed; INC-20A (if not already filed) closed off; DIR-3 KYC current.

• Board & Shareholder Approvals:: Board resolution authorising the strike-off application; special resolution by shareholders (75% majority) approving the application — filed in Form MGT-14 within 30 days of the special resolution.

• Affidavit & Indemnity Bond:: Each director files an affidavit (Form STK-4) declaring no liabilities and an indemnity bond (Form STK-3) jointly indemnifying any future claimant.

• Statement of Accounts:: Statement of accounts in Form STK-8, certified by a Chartered Accountant, drawn up not earlier than 30 days before the date of application.

Voluntary Liquidation Route — When STK-2 Doesn't Fit

Where the company has assets to be distributed to shareholders, creditors to be paid, employees to be settled, or any commercial liability to be wound up, the STK-2 route is unavailable. The correct route is voluntary liquidation under Section 59 IBC 2016 read with Section 271 (winding up by Tribunal where company unable to pay debts). The Insolvency Professional (IP) is appointed; declaration of solvency filed; creditor and shareholder approvals obtained; assets realised; liabilities discharged; surplus distributed; final report filed with NCLT; dissolution order obtained. Timeline: 9-15 months typically.

STK-2 Workflow — Step by Step

Eligibility diagnostic and gap closure (clearing pending filings, closing bank account, clearing debtors / creditors) → Board meeting and resolution → EGM and special resolution → MGT-14 filing within 30 days → Statement of accounts (STK-8) certified by CA → Affidavits (STK-4) by each director → Indemnity bond (STK-3) → STK-2 filing with attachments → ROC examination → Public notice in STK-6 (objection window 30 days) → If no objections, RoC issues STK-7 (notice of striking off) and the company name is removed from the register.

Why Founders Get Stuck Mid-Closure

Pending MGT-7 / AOC-4 filings of multiple years (each carrying penalty), bank account not closed, INC-20A never filed (Section 10A breach), unresolved trade creditors, DSC of director expired, MGT-14 not filed within 30 days of special resolution, or Section 164(2) director disqualification already triggered. We diagnose all of these upfront and clear the path before the STK-2 itself goes in.