Winding up or closing a company in India: process, costs, compliance
Authored by - Adv. Pranay Sawant, Senior Executive at Outsource360
The company stopped trading in March 2024. Two founders, a direct-to-consumer skincare brand in Pune, eighteen months of runway, one pivot that didn't take. They settled the last vendor invoice, handed back the warehouse keys, split the Rs 4 lakh still in the current account, and told their accountant they were shutting it down. He said he would handle it.
What he handled was the final GST return for that quarter. Nothing else.
In July 2026 one of the founders tried to incorporate a new company and the Director Identification Number came back blocked. That is when someone finally pulled the MCA master data, and four separate problems surfaced in a single afternoon.
The annual filings had never been made. Form AOC-4 for FY 2023-24 fell due at the end of October 2024, Form MGT-7 a month later, and neither was filed. Nor were the FY 2024-25 pair. Under section 403 of the Companies Act, 2013 the additional fee is Rs 100 per day per form, and it has no upper limit. By September 2026 the meter on those four forms had passed Rs 1.9 lakh, on a company whose entire remaining balance was Rs 4 lakh and had already been distributed.
The disqualification clock was two-thirds through. Section 164(2)(a) disqualifies every director of a company that fails to file its financial statements or annual returns for three continuous financial years, and the disqualification runs for five years and follows the director into every other company on their profile. Two years of default were complete. The third completed when the FY 2025-26 filings fell due.
The GST registration was still live. A live registration keeps generating return obligations whether or not there is a rupee of turnover, and cancellation is not something the portal does because a business quietly stopped.
And there was a foreign investor. A Singapore angel had put in Rs 30 lakh in 2022 against a Form FC-GPR that was filed correctly at the time. A company with foreign investment still on its books owes the Reserve Bank an annual Foreign Liabilities and Assets return every 15 July until that investment is gone, and the residual cash sitting in the account could not simply be wired back to Singapore because somebody felt the round had ended badly.
Here's the part that stings. All of it was fixable, and cheaply, in a window that was about to shut. The Ministry of Corporate Affairs had a one-time relief scheme running that cut the additional fee on those overdue filings to ten per cent and the strike-off application fee to a quarter. The scheme closes on 15 September 2026.
Closing a company in India runs through one of three routes. Strike off under section 248 of the Companies Act, 2013 is the route for a company with no assets and no liabilities: Form STK-2 is filed with C-PACE for a fee of Rs 10,000, and dissolution typically follows in three to six months. Voluntary liquidation under section 59 of the Insolvency and Bankruptcy Code, 2016 applies where a solvent company still has assets to realise and distribute, runs through a licensed liquidator, and ends in a National Company Law Tribunal dissolution order. Winding up by the Tribunal under section 271 is involuntary. Before any route opens, all overdue ROC, income-tax and GST filings must be brought current.
That is the map. What follows is which route you actually qualify for, what each one costs in real money, the compliance stack that has to be cleared before any of them will run, what changes when a foreign investor sits on the cap table, and what a strike off still does not protect you from afterwards.
On this page
Three exits, and the one most founders actually need
The fee window that closes on 15 September 2026
The compliance stack nobody budgets for
A foreign investor on the cap table changes the exit
Voluntary liquidation under the IBC, after the 2026 rewrite
Dormant status: the option between trading and closing
Closing an LLP is a different form on a different clock
One boundary first. This article is about ending an Indian company or LLP that already exists. If you are still at the other end of that lifecycle, registering a startup in India covers incorporation, and the first-year statutory compliance checklist covers what keeps it alive. This piece is the other end.
Three exits, and the one most founders actually need
Ask a founder how to close a company and most will say "winding up". Ask a company secretary and the first question back is whether there is anything left in it. That difference is the whole subject.
The Companies Act, 2013 and the Insolvency and Bankruptcy Code, 2016 between them provide three genuine exits, and they are not alternatives you pick from on price. Eligibility decides, and it decides before you get an opinion.
Strike off under section 248: the default for a company with nothing left
Strike off removes the company's name from the register and dissolves it. There is no liquidator, no asset realisation and no Tribunal. The Registrar does the work, and since May 2023 a single centralised office called C-PACE, the Centre for Processing Accelerated Corporate Exit, does it for the whole country instead of twenty-odd regional Registrars each running their own queue.
Two things trigger it. The Registrar can act on its own under section 248(1), where a company has not commenced business within a year of incorporation, or has not carried on any business for the two immediately preceding financial years without applying for dormant status. Or the company applies itself under section 248(2), by special resolution or with the consent of members holding seventy-five per cent of the paid-up share capital, on Form STK-2.
The practical reality is that this is the route for the overwhelming majority of failed startups, dormant subsidiaries and shell entities that were incorporated for a project that never happened. Between April 2025 and March 2026 roughly 16,749 companies came off the register in India, and the bulk of those were defunct rather than liquidated or amalgamated. Most of them had nothing to distribute.
The condition that catches people is what "nothing left" means. Not "not much left". The statement of accounts filed with the application has to show nil assets and nil liabilities, certified by a chartered accountant, made up to a date no more than thirty days before the application goes in. Every director signs an indemnity bond in Form STK-3 undertaking to meet any liability that surfaces after dissolution, and an affidavit in Form STK-4. If there is a loan outstanding, a disputed vendor invoice, or a bank account still open with money in it, the file isn't ready.
Voluntary liquidation under the IBC: the route when there is something to distribute
Where the company is solvent but has assets to realise, receivables to collect or surplus cash to return to shareholders, strike off is the wrong instrument and section 59 of the Insolvency and Bankruptcy Code, 2016 is the right one.
This is a formal process run by a registered insolvency professional acting as liquidator. It starts with a declaration of solvency: a majority of the directors swear an affidavit that the company has no debt, or that it can pay its debts in full from the proceeds of the liquidation, and that the liquidation is not being done to defraud anyone. Audited financial statements and a record of business operations for the previous two years are attached, along with a valuation of assets.
A special resolution follows within four weeks. If the company has any debt at all, creditors representing two-thirds in value have to approve the resolution within seven days of it being passed. Then the liquidator takes over, makes a public announcement calling for claims, realises the assets, distributes to stakeholders and files a final report. The Tribunal's only real role comes at the end, when it passes the dissolution order.
So why would anyone choose the expensive route? Because it is the only one that gives a clean, adjudicated end to a company that actually had value in it, and because a shareholder who is about to receive a distribution generally wants a paper trail showing the money came out of a statutory process rather than out of a board resolution.
Winding up by the Tribunal: not a route you choose
The third exit is compulsory winding up under section 271 of the Companies Act, 2013, and you do not opt into it in any meaningful sense. The Tribunal may wind a company up where it has passed a special resolution to that effect, where it has acted against the sovereignty and integrity of India, where its affairs have been conducted fraudulently, where it has failed to file financial statements or annual returns for five consecutive financial years, or where the Tribunal is of the opinion that it is just and equitable to wind it up.
Worth flagging: that fifth-year trigger is the same non-filing failure that produced the disqualification in the story above, one tier further along. A company that ignores its annual filings for half a decade has handed the Tribunal a statutory ground to dissolve it.
There is a lighter version. Section 361 provides a summary liquidation procedure for companies whose assets have a book value not exceeding Rs 1 crore and which meet the prescribed conditions on deposits, loans, turnover and paid-up capital, handled by the Central Government rather than the Tribunal. The Companies (Winding Up) Rules, 2020 set out the machinery for both. In practice a founder with a dead company and a nil balance sheet will still be sent to strike off, because it is faster and costs a fraction.
Route | Who qualifies | Who decides | Typical time to dissolution |
Strike off, section 248, Form STK-2 | Nil assets, nil liabilities, filings current, not a section 8 company | C-PACE (Registrar) | 3 to 6 months |
Voluntary liquidation, section 59 IBC | Solvent company with assets to realise or surplus to distribute | Liquidator, then NCLT for the dissolution order | 90 or 270 days to the final report, plus the Tribunal |
Summary liquidation, section 361 | Book value of assets up to Rs 1 crore, within prescribed limits | Central Government | Varies |
Winding up by the Tribunal, section 271 | Not elective in practice | NCLT | Years |
Dormant status, section 455, Form MSC-1 | No significant accounting transaction, or formed for a future project | Registrar | Not a closure, a pause of up to 5 years |
The fee window that closes on 15 September 2026
This section has a date on it, and the date is close.
On 24 February 2026 the Ministry of Corporate Affairs issued General Circular No. 01/2026 notifying the Companies Compliance Facilitation Scheme, 2026, universally shortened to CCFS-2026. It ran from 15 April 2026 to 15 July 2026, was extended to 31 August 2026 by General Circular No. 03/2026 dated 8 July 2026, and extended again to 15 September 2026 by General Circular No. 04/2026 dated 31 August 2026.
Three reliefs matter to anyone closing a company.
Overdue annual filings can be brought current at ten per cent of the additional fee otherwise payable. That is the Rs 100 per day per form under section 403, reduced by ninety per cent, on forms including AOC-4, MGT-7, MGT-7A, ADT-1, FC-3 and FC-4, and on the old 1956 Act forms for companies whose defaults go back that far.
Form STK-2 can be filed at twenty-five per cent of the fee under the strike-off rules. The statutory fee is Rs 10,000, so the scheme price is Rs 2,500.
And Form MSC-1, the application for dormant status, goes in at half the normal fee, for a company that wants to pause rather than close.
There is also immunity from prosecution for the defaults regularised, where the filing is made before the adjudicating officer issues a notice, or within thirty days of such a notice.
So what does that arithmetic look like on the Pune company? Four overdue forms carrying roughly Rs 1.9 lakh of additional fee come down to around Rs 19,000. The strike-off fee drops from Rs 10,000 to Rs 2,500. The difference between acting inside the window and acting outside it is roughly Rs 1.8 lakh on a shell with no money in it, which is the difference between a closure the founders can fund and one they abandon.
Two conditions on eligibility, and they change the order you do things in. The scheme excludes companies against which strike-off action has already been initiated by the Registrar, companies that have already applied for strike off, companies that filed for dormant status before the scheme began, and companies dissolved through a scheme of amalgamation. Which means the sequence is: clear the overdue filings under the scheme first, then file STK-2 under the scheme. Not the other way round.
Fair warning: the extension to 15 September was a fifteen-day extension of an already-twice-extended scheme, and nothing in the circular suggests another one. If you are reading this after that date, the numbers above revert to full fee and the rest of this article still applies; schemes of this kind have recurred every few years, so it is worth checking whether a successor is open before you pay full additional fees on a five-year-old default.
Strike off, step by step
The form is short. The work in front of it is not.
What has to be true before you file STK-2
Rule 4 of the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016 sets the fee at Rs 10,000 and, since the 2019 amendment, bars the application outright unless the company has filed its overdue financial statements and annual returns up to the end of the financial year in which it ceased to carry on business.
Read that again, because it inverts the order most founders assume. You do not strike off a company to escape its pending filings. You complete the pending filings in order to be allowed to strike it off. That single rule is why the CCFS window and the closure decision are the same decision this month.
The rest of the preconditions are practical. Every liability has to be extinguished, not merely disputed. The bank account has to be closed and the closure certificate obtained. The statement of accounts in Form STK-8 must show nil on both sides, certified by a chartered accountant, dated within thirty days of the application. Each director signs the indemnity bond in Form STK-3 and the affidavit in Form STK-4. The application is digitally signed with a director's Class 3 signature and certified by a practising company secretary, chartered accountant or cost accountant.
Section 8 companies are out. Rule 4 makes a company licensed under section 8 ineligible to apply for removal of its name at all, which surprises founders of not-for-profit vehicles who assumed the same exit was available to them.
The section 249 blocks that send an application back
Section 249 is short, easy to miss, and the most common reason a strike-off file is withdrawn or rejected.
A company cannot apply under section 248(2) if, at any time in the previous three months, it has changed its name or shifted its registered office from one state to another. Nor if it has disposed of property or rights held for value immediately before it ceased trading, for anything other than the ordinary course of business. Nor if it has engaged in any activity beyond what is necessary for making the application itself. And not if it has applied to the Tribunal to sanction a compromise or arrangement that has not been finally concluded.
Once any of those comes to notice, the application is withdrawn by the company or rejected by the Registrar. The three-month cooling period is the one that bites in practice, usually because somebody tidied up the registered office or sold the last piece of equipment a few weeks before filing.
There is a second block worth knowing: once the Registrar has issued the section 248(5) public notice on its own initiative, the company can no longer file its own application. Control of the exit passes to the Registrar at that point, and with it any ability to time the closure around a fee scheme.
What C-PACE does with the file
C-PACE was set up in May 2023 and sits at Manesar. Before it existed, a strike-off application went to the Registrar of the state where the company was registered, joined a queue behind incorporations and every other filing, and routinely took six to twelve months. Centralising the function has pulled typical processing down to roughly three to six months.
After the application is accepted, the Registrar publishes a public notice in Form STK-6 inviting objections, which runs for thirty days. Where no objection stands, the name is struck off and the notice of dissolution is published in Form STK-7 in the Official Gazette. The company is dissolved from the date of that publication, not from the date you filed.
Does centralisation mean automatic approval? It does not. The file still gets examined, and the most common bounce-backs are a statement of accounts older than thirty days by the time it is picked up, an outstanding charge still showing on the MCA index that nobody satisfied with Form CHG-4, and pending litigation disclosed in one document and not in another.
What closing actually costs
Founders ask for one number, and the honest answer is that there isn't one. Why not? Because on a typical dead Indian company, most of the spend is not the closing at all. It is the catch-up.
The table below separates the statutory cost, which is fixed and knowable, from the professional cost, which is a market rate and varies with how bad the backlog is.
Cost line | Statutory amount | Notes |
Overdue AOC-4 / MGT-7 additional fee | Rs 100 per day per form, no cap, section 403 | Reduced to 10 per cent under CCFS-2026 until 15 September 2026 |
Form STK-2 filing fee | Rs 10,000 | Rs 2,500 (25 per cent) under CCFS-2026 until 15 September 2026 |
Form MSC-1, dormant status | Normal MCA fee scaled to share capital | Half the normal fee under CCFS-2026 |
GSTR-10 final return, if filed late | Rs 200 per day (Rs 100 CGST plus Rs 100 SGST) | Due within 3 months of cancellation or the cancellation order |
Professional fee, clean strike off | Market rate, commonly Rs 10,000 to Rs 30,000 | Covers CA certification, professional certification of STK-2, drafting |
Total, clean private limited strike off | Market range commonly quoted at Rs 15,000 to Rs 40,000 | Rises with the size of the filing backlog, not with the size of the company |
Liquidator's fee, voluntary liquidation | Where not agreed in advance: 5.00 per cent of the first Rs 1 crore realised in the first six months, 3.75 per cent in the next six, 1.88 per cent thereafter | Calculated on amounts realised from assets, not on cash and bank balances already held |
Two observations on that table that quotes rarely make explicit.
The first is that the liquidator's fee scale is a default, not a price. Regulation practice is that the members fix the fee before the appointment, and the percentage scale only applies where they didn't. Based on what we've seen, a liquidator asked to quote a fixed fee on a clean, cash-only solvent company will generally do so, and founders who never ask end up on a percentage that was designed for a messy realisation.
The second is that the IBBI clarified how that percentage is computed, and it matters: the fee is a percentage of amounts realised from assets, and cash, bank balances, term deposits, mutual funds and quoted shares already sitting in the company at the start of the process are not "realised". A company whose only asset is Rs 3 crore in a fixed deposit is not a Rs 15 lakh liquidator fee.
For the Tribunal route, there is no useful price to publish, because nobody plans a budget around a process they did not initiate and cannot timetable.
The compliance stack nobody budgets for
Registrar filings are the visible half. The other half sits with three different authorities, each with its own clock. So who tells the income-tax department that the company is gone? Nobody does, unless you do.
Income tax, TDS and the returns that still fall due
A company files an income-tax return for every tax year in which it exists, including the year in which it does nothing. Under the Table to section 263(1) of the Income-tax Act, 2025, a company's return is due on 31 October. A nil return is still a return.
Worth citing carefully, because this is where most 2026 content on the subject is out of date: the Income-tax Act, 2025 came into force on 1 April 2026 and renumbered every section of the Income-tax Act, 1961. The provision that governs a company in liquidation, long cited as section 178, is now section 322 of the Income-tax Act, 2025. It requires the liquidator to give notice of the appointment to the assessing officer within thirty days, prohibits parting with assets until the officer notifies the amount to be set aside for tax, and makes the liquidator personally liable for the tax if either duty is breached. Any adviser still quoting the 1961 numbering on a live liquidation is working from a repealed statute.
TDS is the quieter problem. If the company deducted tax at source in its final months, quarterly TDS returns still have to be filed for those quarters, and the TAN is surrendered only after they are. Surrendering the PAN comes last, after dissolution. Our recommendation is to treat the tax file as the long pole: it is the one that most often forces a founder to reopen a closure they thought was finished. Where the numbers are complicated, this is exactly the work that goes out to a virtual CFO or an outsourced finance team rather than to the founder at midnight.
GST cancellation and the three-month GSTR-10 clock
GST cancellation runs on its own track and will not start until the returns are clean. The portal refuses an application for cancellation while any GSTR-1 or GSTR-3B is outstanding, along with the tax on it.
The application is Form GST REG-16, filed with details of stock held, the liability on it and the payment. The proper officer issues the cancellation order in Form GST REG-19. Then the clock that catches people starts: the final return in Form GSTR-10 is due within three months of the date of cancellation or the date of the cancellation order, whichever is later, and late filing carries Rs 200 a day.
GSTR-10 is a one-time return that closes the account: closing stock declared, remaining input tax credit reversed, outstanding liability settled. It is not GSTR-9 and it is not a normal periodic return, and the number of founders who believe they have "done their last GST filing" while GSTR-10 sits unfiled is not small. If GST registration was itself a recent exercise, the registration guide sets out the thresholds that put you there in the first place.
Payroll, provident fund and the people
If the company ever had employees on the roll, three more closures are waiting. The EPFO registration needs to be closed out after the final contributions and returns, and so does the ESIC registration where it applied. Professional tax registration is state-specific and has to be surrendered in the state that issued it.
Before any of that, the employment side has to actually be finished: notice served or paid, full and final settlement computed, gratuity where the service qualifies, and Form 16 issued for the final year. The Labour Codes that came into force in November 2025, with the Central Rules following in May 2026, changed several of the mechanics here, and the labour codes compliance checklist covers what moved. The contractual side sits in employment contracts and HR compliance.
The mistake we see most often is a founder who treats the last payroll run as the end of the employment relationship. It isn't. An unsettled gratuity claim is a liability, and a liability means the statement of accounts cannot show nil, and a statement of accounts that cannot show nil means no strike off.
A foreign investor on the cap table changes the exit
If the company took foreign money, closing it is not just a Companies Act exercise. It is an exchange-control exercise running in parallel, and the two have different regulators, different forms and different consequences for getting it wrong. Does dissolving the company close the FEMA file along with it? It does not, and the order you do the two things in matters more than founders expect.
Start with the obligation that survives dormancy. Any Indian company that has received foreign direct investment and still carries a foreign liability as at 31 March owes the Reserve Bank an annual Foreign Liabilities and Assets return by 15 July. It is not the auditor's job and it is not part of the ROC filing set. A company that stopped trading in 2024 but still has a non-resident on its cap table in 2026 has two unfiled FLA returns, and neither the MCA portal nor the GST portal will ever mention it.
Then there is the money. Surplus cash returned to a non-resident shareholder on a winding up is a capital account transaction, and it goes back under the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 through an authorised dealer bank, against the documentation that bank requires. The same framework governs pricing if the shares are bought back or transferred to a resident instead of the company being dissolved: the rule 21 pricing guidelines make fair value a ceiling on a transfer from a non-resident to a resident, which is the mirror image of the floor that applies on the way in. Getting a distressed exit "done as a favour" at a token price is exactly the transaction that framework is built to catch. The full picture of the inbound side is in FDI in India: rules, routes and compliance for startups, which covers the automatic route, the government route, the sectoral caps and the reporting clocks that this article assumes you already met.
Three practical consequences follow.
The reporting history has to be complete before the exit, not after it. A missing Form FC-GPR from a 2022 round does not disappear when the company does. It is a contravention under the Foreign Exchange Management Act, 1999, and it is compounded with the RBI as a live matter, which is considerably harder to do once the entity that committed it has been dissolved.
If the company made a downstream investment into another Indian company while it was foreign-owned or controlled, that second entity carries the full FDI framework in its own right, and closing the parent does not tidy up the subsidiary. Founders on a second entity forget this one constantly.
And a foreign investor generally has a contractual say. Shareholders agreements routinely make winding up, liquidation or an application for strike off a reserved matter requiring investor consent. Check the agreement before the board resolution, not after.
Voluntary liquidation under the IBC, after the 2026 rewrite
Section 59 has been the settled route for solvent exits since 2017. In 2026 it changed in two ways that matter to anyone running one now.
The Insolvency and Bankruptcy Code (Amendment) Act, 2026 received assent in April 2026, with provisions brought into force by notification. Alongside it, the IBBI (Voluntary Liquidation Process) (Second Amendment) Regulations, 2026 came into force on 1 June 2026.
The first change is a termination route. A newly inserted section 59(5A) allows voluntary liquidation proceedings to be terminated, and Regulation 42 sets out the procedure. Before this, a company that started a voluntary liquidation and then found a reason to keep trading, a buyer, a revived contract, a resolved dispute, had no clean statutory way back. Now it does.
The second is a hard claims deadline. Regulation 28A requires a person claiming to be a stakeholder to submit the claim on or before the last date specified in the public announcement. Late claims used to drift in and stretch a liquidation well past its statutory timeline; the amendment closes that door and, in doing so, puts more weight on the public announcement being done properly.
The timelines themselves sit in Regulation 37. The liquidator aims to complete the process and submit the final report within 270 days of the liquidation commencement date where creditors approved the resolution, and within 90 days in every other case. Where the process is not completed in time, the liquidator holds a meeting of contributories and reports on the delay.
How long does this actually take in practice? Better than the regulation suggests for clean files. The average for completed voluntary liquidations has been compressing year on year, and cash-only companies with no creditors and no disputed claims have closed inside three months. What stretches a file is almost never the law; it is an unreconciled receivable, an unresolved tax assessment, or a shareholder who cannot be traced to accept a distribution.
Dormant status: the option between trading and closing
Not every founder who stops trading wants to dissolve. Sometimes the entity is worth keeping: it holds a trademark, a licence, a lease, a bank relationship, or simply the name. So is there a setting between running a company and killing it?
There is, and it has a statutory name.
Section 455 of the Companies Act, 2013 allows an inactive company, one with no significant accounting transaction, or one formed for a future project or to hold an asset or intellectual property, to be entered on the register as a dormant company on Form MSC-1. Compliance drops sharply. The dormant company files a return of dormant company in Form MSC-3 within thirty days of the end of each financial year.
Three limits before anyone treats this as a permanent parking space.
Dormancy runs for a maximum of five consecutive financial years. If the company has not resumed business or applied to become active again within that period, section 455(6) empowers the Registrar to begin striking it off, which means the decision returns unmade.
Dormant status does not suspend everything. The FLA return still falls due if there is foreign investment. The GST registration still generates obligations unless it is cancelled. A dormant company with a live GST number is a dormant company with a growing late-fee problem.
And the application has to go in before the default, not after. CCFS-2026 excludes companies that filed for dormant status before the scheme began, and section 248(1)(c) lets the Registrar strike off a company that has not carried on business for two financial years and has not applied for dormant status. The window for choosing dormancy closes on its own.
What a strike off does not do
Here's the thing most closure content skips entirely. Dissolution ends the company. Does it end everything attached to the company? It does not.
What people assume ends | What actually happens | Source |
Director liability | The liability of every director, manager and officer continues and may be enforced as if the company had not been dissolved | Section 248(7), Companies Act, 2013 |
Disqualification | Disqualification under section 164(2) for three continuous years of non-filing runs five years and applies across every company the director sits on | Section 164(2), Companies Act, 2013 |
The indemnity given at filing | Every director signed Form STK-3 undertaking to meet liabilities that surface after dissolution. That bond is the mechanism by which a later claim finds them | Rule 4, Removal of Names Rules, 2016 |
Finality of the dissolution | A member, creditor, workman or the company may appeal to the NCLT within three years; any aggrieved person may apply within twenty years | Section 252(1) and 252(3), Companies Act, 2013 |
Tax exposure | Assessments and recovery proceedings for years before dissolution are not extinguished by the strike off | Income-tax Act, 2025 |
The restoration point deserves a sentence of its own, because it cuts both ways. If your company was struck off by the Registrar and you needed it alive, section 252 is the remedy: an appeal to the National Company Law Tribunal within three years of the Registrar's order, or an application by any aggrieved person within twenty years of the Gazette notice, and the Tribunal can restore the name and place everyone back in the position they would have been in. If you closed a company deliberately and assumed the file was shut forever, the same twenty-year window is a creditor's route back to it.
Which is the practical argument for doing the closure properly rather than letting the Registrar do it for you. A voluntary strike off with clean filings, settled liabilities and a documented indemnity is a materially better position to be in twenty years later than a compulsory strike off with three years of defaults and a disqualified board.
Closing an LLP is a different form on a different clock
Limited liability partnerships have their own regime. Is Form 24 just STK-2 with a different number on it? Not quite, and the overlap with company strike off is smaller than the similarity of the language suggests.
An LLP is struck off on Form 24 under rule 37 of the LLP Rules, 2009. Since the notification dated 27 August 2024, which amended rule 37 to designate C-PACE as the processing authority for LLPs as well, the file goes to the same centralised office that handles company strike-offs, and the timelines have come down accordingly.
The conditions are recognisable. The LLP must have ceased commercial operations or not carried on business for at least one year. All liabilities must be settled and the bank account closed. Every designated partner has to consent. A statement of accounts showing nil assets and liabilities, certified by a chartered accountant and not older than thirty days, is attached, along with an affidavit and indemnity from the designated partners. Overdue Form 8 and Form 11 filings have to be brought current first, on the same logic as a company.
The government fee for Form 24 is modest, in the hundreds rather than the thousands of rupees, which is one of the few places where the LLP structure is genuinely cheaper at the exit than at any other point. If you are choosing an entity now rather than closing one, private limited versus LLP versus OPC sets out the trade-offs, and the cost of exit is a real one that founders almost never price in at incorporation.
One asymmetry worth knowing. CCFS-2026 is a Companies Act scheme. It does not extend to LLP filings, so an LLP sitting on years of unfiled Form 8 and Form 11 does not get the ninety per cent relief a company gets, and the additional fee runs on its own terms.
The order to do this in
Sequence is most of the difficulty. Why does a closure that looks like a four-month job take fourteen? Usually because somebody did step seven before step three.
Decide the route honestly. Anything left on the balance sheet beyond nil assets and nil liabilities means voluntary liquidation, not strike off. Wanting strike off does not make you eligible for it.
Check section 249 before you touch anything. If you changed the company name or moved the registered office across state lines in the last three months, the clock has to run out before you can apply.
Get investor and shareholder consent where the agreements require it, and pass the board resolution.
Bring the ROC filings current. Every overdue AOC-4 and MGT-7 up to the financial year in which the company ceased business, because rule 4 will not let the application through otherwise. If CCFS-2026 or a successor scheme is open, this step happens inside it.
File the outstanding income-tax returns and TDS returns, and settle any demand. Deal with the assessments before the entity disappears, not after.
Apply for GST cancellation in Form GST REG-16, and diarise GSTR-10 for three months after the cancellation order.
Close the employment side: settlements, gratuity, Form 16, then EPFO, ESIC and professional tax registrations.
Satisfy every registered charge on Form CHG-4 and confirm the MCA index shows nothing outstanding.
Close the bank account and collect the closure certificate. Only now can the statement of accounts show nil.
Get the CA-certified statement of accounts in Form STK-8 dated within thirty days, execute STK-3 and STK-4 with every director, and file STK-2.
Watch for the STK-6 public notice, respond to any objection, and keep the STK-7 Gazette notice when it publishes. That document, not the filing receipt, is the proof of dissolution.
Surrender the TAN after the final TDS returns, and the PAN after dissolution.
Steps four through seven are where the money and the months go, and they are also the steps that can run in parallel with each other. Running them in series is the single most common reason a closure that should have taken four months takes fourteen. If the internal bandwidth to run four regulators at once does not exist, this is a natural piece of work to hand to an outsourced legal and compliance team; the calendar discipline it needs is the same discipline set out in the annual ROC compliance calendar.
Closing an entity cleanly is a documentation exercise across four regulators on four clocks, and it is unforgiving of gaps. Outsource360 runs business registration and compliance end to end, including the closure filings, with virtual CFO support for the tax and GST cleanup that has to clear first. Book a consultation if that is the trade you want to make.
Frequently asked questions
How long does it take to close a company in India?
Through strike off with C-PACE, typically three to six months from filing Form STK-2, after the preparatory filings are complete. The preparation is usually the longer half: a company with three years of unfiled returns should budget two to three months before the application can even be filed. Voluntary liquidation under the IBC targets a final report within 90 days, or 270 days where creditors approved the resolution, plus the time the NCLT takes to pass the dissolution order.
What does it cost to strike off a private limited company?
The statutory filing fee for Form STK-2 is Rs 10,000, reduced to Rs 2,500 under CCFS-2026 until 15 September 2026. Professional fees for a clean file commonly run Rs 10,000 to Rs 30,000, putting total market quotes in the Rs 15,000 to Rs 40,000 range. The variable that actually moves the number is the filing backlog, which carries an additional fee of Rs 100 per day per form with no cap.
Can I close a company that has not filed its annual returns?
Not directly. Rule 4 of the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016 requires overdue financial statements and annual returns up to the end of the financial year in which the company ceased business to be filed before Form STK-2 can be submitted. The backlog is cleared first, then the closure is applied for.
What is CCFS-2026 and does it still apply?
The Companies Compliance Facilitation Scheme, 2026, notified by MCA General Circular No. 01/2026 dated 24 February 2026. It allows overdue filings at ten per cent of the additional fee, Form STK-2 at twenty-five per cent of the fee, and Form MSC-1 at half fee, with immunity from prosecution for the defaults regularised. It ran from 15 April 2026 and, after two extensions, closes on 15 September 2026.
What is the difference between strike off and winding up?
Strike off is an administrative removal of the company's name from the register by the Registrar, available only where there are no assets and no liabilities. Winding up is a formal process in which a liquidator realises assets, settles claims and distributes any surplus, ending in a dissolution order. A solvent company with assets uses voluntary liquidation under section 59 of the IBC; an insolvent or delinquent company can be wound up by the Tribunal under section 271 of the Companies Act, 2013.
Does striking off a company cancel its GST registration?
No. The two are separate processes with separate regulators. GST cancellation is applied for in Form GST REG-16 and granted by order in Form GST REG-19, and the final return in Form GSTR-10 is due within three months of the cancellation or the cancellation order, whichever is later. A struck-off company with a live GST registration still accrues return obligations.
Am I personally liable after my company is struck off?
Yes, for liabilities referable to the period before dissolution. Section 248(7) of the Companies Act, 2013 provides that the liability of every director, manager and other officer continues and may be enforced as if the company had not been dissolved. Every director also signs an indemnity bond in Form STK-3 as part of the application.
Can a struck-off company be revived?
Yes. Under section 252(1) the company, any member, creditor or workman may appeal to the National Company Law Tribunal within three years of the Registrar's order. Under section 252(3) any person aggrieved may apply within twenty years of the publication of the striking-off notice in the Official Gazette. The Tribunal may order restoration on such terms as it thinks fit.
Will closing my company remove a director disqualification?
No. Disqualification under section 164(2) of the Companies Act, 2013 arises from failure to file financial statements or annual returns for three continuous financial years, runs for five years, and applies to the director across every company. Closing the defaulting company does not reset it. Bringing the filings current before the third year of default completes is the only reliable way to avoid it.
What is C-PACE and do I have to deal with it directly?
The Centre for Processing Accelerated Corporate Exit, a centralised Ministry of Corporate Affairs office operational for companies since May 2023 and for LLPs since 27 August 2024, which processes all strike-off applications in place of the individual Registrars. You do not deal with it as a physical office; Form STK-2 is filed on the MCA V3 portal and routed to it.
How do I close a company with a foreign shareholder?
The company-law steps are unchanged, but the exchange-control file runs alongside. The annual Foreign Liabilities and Assets return remains due to the Reserve Bank each 15 July while foreign investment is on the books, historic reporting gaps such as a missing Form FC-GPR should be regularised before the entity is dissolved, and any surplus remitted to a non-resident shareholder goes out through an authorised dealer bank under the Foreign Exchange Management (Non-debt Instruments) Rules, 2019. Check the shareholders agreement as well: liquidation is frequently a reserved matter requiring investor consent.
What is dormant status and when is it better than closing?
Dormant status under section 455 of the Companies Act, 2013, applied for on Form MSC-1, keeps an inactive company on the register with sharply reduced compliance, filing only a return of dormant company in Form MSC-3 within thirty days of each financial year end. It suits a company holding a trademark, licence or asset, or formed for a future project. It runs for a maximum of five consecutive financial years, after which section 455(6) lets the Registrar begin striking the company off.
How is an LLP closed and is it cheaper?
An LLP files Form 24 under rule 37 of the LLP Rules, 2009, processed by C-PACE since 27 August 2024. It must have ceased business for at least a year, settled all liabilities, closed its bank account and brought Form 8 and Form 11 filings current, with a CA-certified nil statement of accounts not older than thirty days and consent from all designated partners. The government fee is materially lower than the Rs 10,000 for a company, but CCFS-2026 does not extend to LLP filings.
Who pays the liquidator in a voluntary liquidation?
The company, out of liquidation assets, and the fee ranks as a liquidation cost paid ahead of distributions. Where the members do not fix the fee before the liquidator is appointed, the default percentage scale applies: 5.00 per cent of the first Rs 1 crore realised in the first six months, 3.75 per cent in the next six months, and 1.88 per cent thereafter. The IBBI has clarified that the percentage is calculated on amounts realised from assets, not on cash, bank balances, term deposits, mutual funds or quoted shares already held when the process starts.
What changed in voluntary liquidation in 2026?
Two things. The Insolvency and Bankruptcy Code (Amendment) Act, 2026 inserted section 59(5A), creating a statutory route to terminate a voluntary liquidation that has been commenced, with the procedure set out in Regulation 42 of the IBBI voluntary liquidation regulations. And the IBBI (Voluntary Liquidation Process) (Second Amendment) Regulations, 2026, in force from 1 June 2026, inserted Regulation 28A requiring a stakeholder to submit any claim on or before the last date stated in the public announcement.
Do I still have to file an income-tax return for the year the company closed?
Yes. A company files a return for every tax year in which it exists, including a nil year, and the due date for a company under the Table to section 263(1) of the Income-tax Act, 2025 is 31 October. Outstanding TDS returns for the final quarters must also be filed before the TAN is surrendered, and the PAN is surrendered after dissolution.
Can the Registrar strike off my company without me applying?
Yes. Section 248(1) of the Companies Act, 2013 lets the Registrar act on its own where a company has not commenced business within one year of incorporation, or has not carried on business for two immediately preceding financial years without applying for dormant status. Once the Registrar has issued the public notice under section 248(5), the company can no longer file its own application under section 248(2), which means it also loses the ability to time its exit around a fee scheme.
References
Companies Act, 2013, sections 164(2), 248, 249, 252, 271, 361, 403 and 455, indiacode.nic.in.
Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016, rule 4 and Forms STK-2 to STK-8, including the 2019 amendment requiring overdue financial statements and annual returns to be filed before an application, Ministry of Corporate Affairs, mca.gov.in.
Ministry of Corporate Affairs, General Circular No. 01/2026 dated 24 February 2026, notifying the Companies Compliance Facilitation Scheme, 2026, in force 15 April 2026 to 15 July 2026.
Ministry of Corporate Affairs, General Circular No. 03/2026 dated 8 July 2026, extending CCFS-2026 to 31 August 2026.
Ministry of Corporate Affairs, General Circular No. 04/2026 dated 31 August 2026, extending CCFS-2026 to 15 September 2026.
Ministry of Corporate Affairs, Centre for Processing Accelerated Corporate Exit (C-PACE), established May 2023 for companies, mca.gov.in.
Limited Liability Partnership Rules, 2009, rule 37 and Form 24, as amended by notification G.S.R. 475(E) dated 27 August 2024 designating C-PACE as the processing authority for LLP strike-off.
Companies (Winding Up) Rules, 2020, notified 24 January 2020 and effective 1 April 2020, covering winding up by the Tribunal under section 271 and summary liquidation under section 361.
Insolvency and Bankruptcy Code, 2016, section 59, voluntary liquidation of corporate persons, ibbi.gov.in.
Insolvency and Bankruptcy Code (Amendment) Act, 2026, assented April 2026, inserting section 59(5A) on termination of voluntary liquidation proceedings, provisions commenced by notification.
Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017, including Regulation 37 on timelines, ibbi.gov.in.
Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) (Second Amendment) Regulations, 2026, in force 1 June 2026, inserting Regulation 28A on the last date for claims and Regulation 42 on termination.
Insolvency and Bankruptcy Board of India, clarification on computation of the liquidator's fee as a percentage of amounts realised from assets, excluding cash and bank balances, term deposits, mutual funds and quoted shares held at commencement.
Income-tax Act, 2025 (Act No. 30 of 2025), in force 1 April 2026, section 322 on a company in liquidation and the Table to section 263(1) on return due dates, incometaxindia.gov.in.
Central Goods and Services Tax Act, 2017 and rules, Form GST REG-16 for cancellation, Form GST REG-19 for the cancellation order, and Form GSTR-10 final return due within three months of cancellation, gst.gov.in.
Foreign Exchange Management (Non-debt Instruments) Rules, 2019, including rule 21 pricing guidelines, and the Reserve Bank of India annual Foreign Liabilities and Assets return due 15 July, rbi.org.in.
Ministry of Corporate Affairs strike-off data for FY 2025-26, as compiled from the ministry's published strike-off lists, showing approximately 16,749 companies removed from the register between April 2025 and March 2026.
Disclaimer
This article is for educational and general business information purposes only and does not constitute professional legal, financial, or tax advice. It states the Indian corporate-exit position as it stood on the date at the top of this page. Fees, forms, scheme deadlines and thresholds change by circular, notification and amendment, sometimes at short notice, and several of the instruments described here were issued during 2026. Two points are flagged as time-sensitive and should be checked in their current form before anything is filed: the closing date of the Companies Compliance Facilitation Scheme, 2026, stated as 15 September 2026 by General Circular No. 04/2026 and previously extended twice; and the commencement position under the Insolvency and Bankruptcy Code (Amendment) Act, 2026, whose provisions take effect on dates appointed by notification rather than all at once. Professional-fee ranges quoted here are market observations, not statutory amounts. Any figure, form, deadline or route that decides a filing should be verified against the current rules on the MCA, IBBI, CBDT, GST and RBI portals. Consult a qualified lawyer, company secretary or chartered accountant before acting on anything set out here.
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