Closure of Private Limited Company via Strike Off: Complete Guide

Planning to close your company? If your business is inactive, strike off is the simplest and most cost-effective way to legally close a Private Limited Company.

This guide explains the complete process, requirements, and key tips for smooth company closure.

Strike off provides a quick and legal exit for inactive companies with minimal compliance burden. Expert Insight

What is Strike Off?

Strike off is a process where the Registrar of Companies removes a company’s name from its register, effectively closing it.

  • Company ceases to exist legally
  • No further business operations allowed
  • Certificate of incorporation cancelled

When Should You Choose Strike Off?

  • Company is inactive
  • No business operations
  • No assets or liabilities
  • No legal cases pending

Eligibility Criteria

  • No outstanding liabilities
  • No pending litigation
  • No recent structural changes
  • No active business activities

Step-by-Step Process

Step 1: Board Meeting

Pass resolution to initiate closure.

Step 2: Special Resolution

Obtain approval from 75% shareholders.

Step 3: Clear Liabilities

Settle all dues and close bank accounts.

Step 4: Prepare Documents

Prepare financial statements, affidavits, and bonds.

Step 5: File MGT-14 (if applicable)

File resolution with ROC.

Step 6: File STK-2

Submit strike off application with fees.

Step 7: ROC Approval

Company is struck off after verification and notice period.

Documents Required

Document Purpose
Board Resolution Approval for closure
Special Resolution Shareholder consent
STK-2 Form Strike off application
STK-3 Indemnity bond
STK-4 Affidavit by directors
Financial Statements Proof of no liabilities
Bank Closure Letter Account closure confirmation

Time Required

Strike off usually takes 3 to 6 months depending on approvals.

Advantages of Strike Off

  • Simple process
  • Low cost
  • No court involvement
  • Fully online procedure

What Happens After Strike Off?

  • Company name removed from ROC
  • Business cannot operate
  • Directors may still be liable for hidden dues

Common Mistakes to Avoid

  • Not clearing liabilities
  • Incomplete documents
  • Incorrect filing
  • Ignoring compliance

Pro Tips

  • File pending ROC returns first
  • Ensure zero liabilities
  • Prepare documents carefully
  • Take professional help

Final Thoughts

Strike off is the easiest way to close an inactive company legally.

With proper planning and compliance, you can ensure a smooth and hassle-free exit.

Choose the right approach and close your business the right way.