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IndianTaxPert — Simplifying Business Registration & Compliance in India | Company Incorporation • LLP Formation •
Closing an inactive or defunct company in India is possible through a formal ROC procedure, either by striking off or winding up. At Indian Tax Expert, we provide complete online assistance to help you close your company efficiently, legally, and without hassle.
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Understanding Company Closure
Striking Off
The company’s name is removed from the ROC register due to prolonged inactivity or failure to commence business. Struck-off companies can be restored if they regain financial activity.
Voluntary Striking Off
Companies may apply to the ROC using Form STK-2, confirming inactivity under Section 248 of the Companies Act. The ROC can also strike off a company on its own.
Difference Between Striking Off & Winding Up
| Process | Details |
|---|---|
| Striking Off | Simple, cost-effective, faster; used when company is inactive. Can be initiated voluntarily or by ROC. |
| Winding Up | Complex, formal liquidation of assets and distribution of liabilities; initiated by members, creditors, or NCLT order. |
Note: Striking off is for dormant companies, while winding up is for full liquidation of assets and liabilities.
Legal Provisions for Company Closure
Section 248 of the Companies Act, 2013 allows ROC to strike off a company under specific conditions.
Conditions for ROC Striking Off
- Company hasn’t commenced operations within 1 year of incorporation
- No business for 2 consecutive financial years, and not a dormant company
- Subscribers haven’t paid capital within 180 days of incorporation
- ROC verification shows no business activity
Minimum Requirements for Striking Off
- Identify the relevant clause under Section 248
- Obtain consent from at least 75% shareholders or pass special resolution
- Clear all government dues and liabilities
- Close company bank account and obtain closure statement
- Ensure company has no assets or liabilities
- Prepare CA-certified statement of accounts showing nil assets/liabilities
Benefits of Striking Off a Company
- No Compliance Burden: Avoid mandatory filings for inactive companies
- No Penalties: Prevent penalties due to non-compliance
- Resource Optimization: Free resources for other ventures
- Option to Restore: Companies can be restored within 3 years of striking off
Documents & Information Required for MGT-7
Info
Company Information
Basic company details including CIN, registered office address, principal business activities, and shareholding structure.
Info
Management Details
Details of Directors and Key Managerial Personnel (KMP), along with changes during the financial year, if any.
Info
Board & Compliance Records
Information relating to board meetings, penalties or punishments, and other statutory disclosures.
Attach
Mandatory Attachments
List of shareholders / debenture holders, corporate governance disclosures, and certification (if applicable).
Step-by-Step Process for MGT-7 Filing
Step 1: Document Preparation
Collect statutory registers and records and prepare the list of shareholders / debenture holders as on 31st March.
Step 2: Form Preparation
Download the applicable MGT-7 / MGT-7A form, fill in company and compliance details, and attach required documents.
Step 3: Submission & Fee Payment
Upload the form on the MCA portal, pay applicable ROC fees online, and generate the SRN (Service Request Number).
Step 4: ROC Processing
Form is processed under STP mode. Preserve the acknowledgement and filed form for future reference and records.
