Winding up and striking off a company or LLP is the formal legal process of closing the entity — distributing assets, settling liabilities, and removing the entity from the MCA register. Many business owners are unaware that an inactive company still accumulates annual compliance obligations, penalties, and director liability — the longer you wait, the more expensive and complicated it becomes. This guide explains the winding up and strike-off options available in India.
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1. Closure Options — Choosing the Right Path
| Method | Best For | Key Requirement |
|---|---|---|
| STK-2 Fast Track Strike Off | Dormant companies with nil or minimal activity | No pending liabilities, all returns filed, bank account closed |
| Voluntary Winding Up (Section 59) | Solvent companies with assets to distribute | Liquidator appointment, creditor settlement, asset distribution |
| NCLT Winding Up (Compulsory) | Court-ordered closure or creditor petition | NCLT order required |
| LLP Strike Off (Form 24) | Inactive LLPs | Nil assets/liabilities, all returns filed |
2. Fast Track Strike Off — STK-2 (Most Common)
The Fast Track Strike Off is the simplest and most cost-effective way to close a dormant or inactive Private Limited Company, OPC, or company that has never commenced business. Eligibility conditions:
- Company has not commenced business within 1 year of incorporation, OR
- Company has not been carrying on any business or operation for the immediately preceding 2 financial years and has not made any application to be declared as dormant
- No pending liabilities — all dues to government (tax, GST, TDS) settled
- Bank account closed
- All pending annual filings cleared (though MCA has amended this — file everything first)
Before filing STK-2, all pending ITRs, ROC annual filings, and GST returns must be up to date. Our team clears the compliance backlog before filing the strike-off application.
Clear Compliance & Close Company →STK-2 Process:
- Board resolution and special resolution (if required) approving closure
- File all pending ITRs, ROC returns, and GST returns
- Close all bank accounts — obtain bank closure certificate
- File Form STK-2 with affidavit, indemnity bond, statement of accounts (not older than 30 days), and NOC from tax authorities
- MCA publishes notice in Official Gazette — 30-day objection window
- If no objections — company struck off. Strike-off order published in Official Gazette.
3. LLP Closure — Form 24
An LLP with nil assets and nil liabilities can apply for strike-off in Form 24 — with consent of all partners, a declaration that there are no pending liabilities, and all LLP returns filed up to date. The process is similar to STK-2 and typically completed within 90 days.
4. Consequences of Not Closing an Inactive Company
- Accumulating ROC penalties: ₹100/day for missed filings — compounding year after year with no upper limit
- Director disqualification: Directors of companies with 3+ years of missed annual returns face 5-year disqualification under Section 164(2)
- Income tax notices: ITD may issue notices and levy penalties for non-filing of ITRs
- GST notices: If GST was registered — non-filing leads to GSTIN suspension and penalties
⚠️ An inactive company is never truly dormant from a compliance standpoint. Every day of inaction adds to the penalty burden and director liability. Close it properly — or apply for dormant company status — to draw a clean line.
Company / LLP Winding Up and Strike Off — Pan India
Our CA team handles the complete closure process — pending compliance clearance, STK-2 / Form 24 filing, bank closure coordination, and post-strike-off ITR filing — for companies and LLPs across India. Close your company cleanly and confidently.
Wind Up My Company →Disclaimer: This article is for general informational and educational purposes only, representing our professional views as Chartered Accountants. It does not constitute legal or tax advice. Laws and regulations are subject to change. Please consult our team for situation-specific guidance.