Many startups and private limited companies become inactive after incorporation due to lack of business activity, funding issues, disputes among founders, or change in business plans. However, even inactive companies continue to attract annual ROC compliance requirements, penalties, and professional costs.
To provide an exit mechanism for such companies, the Companies Act, 2013 allows removal of the company’s name from the Register of Companies through the strike off process under Section 248.
In this article, a complete practical guide on Strike Off of Company under STK-2 is explained including eligibility, procedure, documents required, consequences, government fees, and important precautions for 2026.
What is Strike Off of Company?
Strike off means removal of the name of a company from the Register of Companies maintained by the Registrar of Companies (ROC).
Once the company is struck off:
- the company ceases to exist as a legal entity,
- its name is removed from MCA records,
- and the company stands dissolved.
The process is governed by:
- Section 248 of the Companies Act, 2013; and
- Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016.
What is Form STK-2?
Form STK-2 is the prescribed e-form filed with the ROC for voluntary strike off of a company.
The form is used when a company itself applies for removal of its name from ROC records.
Why Companies Opt for Strike Off?
Common practical reasons include:
- No business activity after incorporation
- Startup idea discontinued
- Company incorporated but business never commenced
- Continuous annual ROC compliance burden
- No future operational plans
- Business shifted to LLP/proprietorship
- Closure due to losses or funding failure
- Internal disputes among promoters
Eligibility for Strike Off under STK-2
A company may generally apply for strike off if:
- It has not commenced business after incorporation; or
- It has not carried on any business activity for the preceding two financial years.
Additionally, the company should generally ensure:
- No outstanding liabilities
- Closure of bank accounts
- Filing of overdue ROC returns, wherever required
- No active commercial operations
- Extinguishment of all debts and obligations
When Company Cannot Apply for Strike Off?
Certain companies are restricted from applying for strike off under Section 249 of the Companies Act, 2013.
Generally, a company cannot apply if it has:
- Changed its name or registered office from one state to another during prescribed period
- Disposed property outside ordinary course of business
- Engaged in any activity except those necessary for strike off
- Made application to NCLT for compromise or arrangement
- Pending inspection, inquiry, or investigation
- Pending prosecution before court
- Outstanding public deposits
- Unsatisfied charges
Certain categories such as listed companies are also not eligible for normal STK-2 strike off.
Important Pre-Conditions Before Filing STK-2
Before filing Form STK-2, companies should complete the following practical compliances:
Closure of Bank Account
All bank accounts should preferably be closed before filing strike off application.
Settlement of Liabilities
All liabilities including creditors, taxes, statutory dues, and employee dues should be settled.
Filing of Pending ROC Returns
Pending annual filings should be reviewed carefully.
Closure of GST Registration
GST registration should be surrendered, wherever applicable.
Preparation of Statement of Accounts
A statement of accounts certified by Chartered Accountant is required.
No Active Business Transactions
The company should avoid carrying ongoing business transactions immediately before strike off application.
Documents Required for STK-2 Filing
The following documents are generally required:
- Form STK-2
- Board Resolution approving strike off
- Special Resolution or consent of shareholders
- Indemnity Bond in Form STK-3
- Affidavit in Form STK-4
- Statement of Accounts certified by Chartered Accountant
- Copy of PAN
- Identity and address proof of directors, if required
- Authority letter, if applicable
The ROC may seek additional clarification depending upon facts of the case.
Step-by-Step Procedure for Strike Off of Company
Step 1: Hold Board Meeting
The Board of Directors should consider strike off proposal, approve closure process, and authorise filing of STK-2.
Step 2: Extinguish All Liabilities
The company should settle creditors, statutory liabilities, taxes, employee dues, and contractual obligations.
Step 3: Close Bank Account
Bank account closure is strongly recommended before filing STK-2.
Step 4: Obtain Shareholders Approval
The company should obtain a Special Resolution or consent of 75% members in terms of paid-up share capital.
Step 5: Prepare Required Documents
Prepare STK-3 Indemnity Bond, STK-4 Affidavit, Statement of Accounts and other supporting documents.
Step 6: File Form STK-2 with ROC
Submit an e-form STK-2 with Registrar of Companies within 30 days of execution of all documents.
Step 7: ROC Examination and Public Notice
ROC examines the application and may issue public notice inviting objections.
Step 8: Final Strike Off Notification
If ROC is satisfied, the name of the company is struck off and notice is published in Official Gazette. The company stands dissolved from the date mentioned in the notification.
Government Fees for STK-2 Filing
The prescribed government filing fees for Form STK-2 is ₹10,000.
Important Relief under CCFS-2026
The Ministry of Corporate affairs on 24th February 2026 had issued General Circular No. 01/2026 giving one time opportunity under the Companies Compliance Facilitation Scheme, 2026 (CCFS-2026), effective up to 15 July 2026, eligible companies may avail substantial relaxation in additional ROC filing fees for regularising pending compliances before applying for strike off. This may significantly reduce the overall compliance cost for inactive or defaulting companies planning closure.
Companies should evaluate the benefit of the scheme before initiating strike off process.
To understand your annual ROC filing obligations, you may also refer to our comprehensive guide on Annual Compliance for Private Limited Company in India (2026).
Consequences of Strike Off of Company
Once the company is struck off:
- Company ceases to exist legally
- ROC removes company name from records
- Bank accounts become inoperative
- Business operations cannot continue
- PAN and GST implications may arise
- Directors may still remain liable for certain acts and liabilities
Strike off does not automatically extinguish personal liabilities of directors arising from fraud or wrongful acts.
Can a Struck Off Company be Revived?
Yes. Under Section 252 of the Companies Act, 2013, an application may be filed before the National Company Law Tribunal (NCLT) for restoration of company name. Restoration may be sought by the company, members, creditors, or other aggrieved persons. NCLT may restore the company if justified.
Strike Off vs Winding Up
| Basis | Strike Off | Winding Up |
|---|---|---|
| Process | Simplified closure | Formal liquidation process |
| Authority | ROC | NCLT |
| Cost | Comparatively lower | Higher |
| Time | Faster | Longer |
| Suitable For | Inactive companies | Companies with complex liabilities |
| Liquidator Required | No | Usually yes |
Common Mistakes During Strike Off Process
Many companies face rejection or future complications due to:
- Pending annual filings
- Active GST registration
- Non-closure of bank accounts
- Incorrect affidavits
- Undisclosed liabilities
- Pending tax notices
- Continuing transactions after application
Professional review before filing STK-2 is advisable.
Penalty for Improper Strike Off
Providing false declarations or suppressing liabilities during strike off process may attract penalties, prosecution, director liability, and restoration proceedings.
Companies should ensure complete and accurate disclosures in STK-2 filing.
Conclusion
Strike off under STK-2 provides an effective exit mechanism for inactive private limited companies and startups that no longer intend to continue operations.
However, companies should carefully evaluate pending liabilities, tax matters, ROC filings, and regulatory compliances before initiating strike off process.
Improper or premature closure may create future legal and financial complications for directors and shareholders.
Professional guidance helps ensure smooth and legally compliant closure of the company.
Need Assistance in STK-2 Filing or Company Closure?
For professional assistance in: Strike Off of Company, STK-2 Filing, ROC Pending Compliance, Closure of Private Limited Company, Revival of Struck Off Company — contact Legnex Solutions for expert support and end-to-end compliance assistance.
Frequently Asked Questions (FAQs)
What is Form STK-2?
Form STK-2 is an MCA e-form used for voluntary strike off of a company under Section 248 of the Companies Act, 2013.
Can a company with liabilities apply for strike off?
Generally, no. Liabilities should be settled before applying for strike off.
Is annual ROC filing required before strike off?
Pending annual filings should be reviewed carefully before filing STK-2.
What is the government fees for STK-2?
The prescribed filing fees is ₹10,000.
Can GST registration remain active during strike off?
It is advisable to surrender GST registration before strike off application.
Can ROC reject STK-2 application?
Yes. ROC may reject the application if documents are incomplete or liabilities remain pending.
What is the difference between dormant company and strike off?
A dormant company continues to legally exist, whereas a struck off company stands dissolved.
Can a struck off company be revived?
Yes. Under Section 252 of the Companies Act, a struck off company may be restored by NCLT if justified.