How to Close a Pvt Ltd Company (STK-2) in India

The startup did not work out, the account has been quiet for months, and you just want the company gone so the annual filings and penalties stop. The bad news: you cannot close a private limited company the day you decide to. The good news: once you understand the two-year rule, the STK-2 route is clean and predictable.

Striking off through form STK-2 is the standard, low-cost way to shut a dormant private limited company under Section 248 of the Companies Act, 2013. This guide walks through when you actually qualify, the two things founders forget before filing (closing the bank account and getting the balance sheet to zero), the documents, the cost, and the timeline from filing to the company vanishing from the register.

1 Strike off versus winding up: pick the right door

There are two very different ways to end a company, and founders often reach for the heavy one when the light one will do.

Strike off (STK-2) removes the company’s name from the register maintained by the Registrar of Companies. It suits a company that has stopped trading, has no assets or liabilities left, and simply needs to disappear cleanly. It is faster and much cheaper.

Voluntary winding up is a formal liquidation, usually run under the Insolvency and Bankruptcy Code process, with a liquidator, asset realisation and creditor settlement. It is the route where there are real assets to distribute or liabilities to work through. For a spent startup shell, this is almost always overkill.

2 The two-year rule: you cannot close on demand

This is the single point most founders get wrong. A company is eligible for strike off only if it has not carried on any business or operation for the two immediately preceding financial years. Inoperative means nil operational or revenue-by-operation income. It does not mean the company must be frozen in every respect: small incidental expenses, such as bank charges, a professional fee for filing returns, or a nominal audit cost, can still occur without breaking dormancy.

So the moment you decide to wind down is not the moment you can file. If the company earned revenue this financial year, the clock has barely started. You have to let two clean financial years pass with zero operating income, keep filing the annual returns in the meantime, and only then apply.

3 Close the bank account first (attach the closing statement)

Before you file STK-2, close every bank account in the company’s name and obtain the bank closing statement from the branch. This is not optional housekeeping. The registrar wants concrete proof that the company has no live account through which it could still transact, and the closing letter is that proof.

Closing the account also forces you to deal with the last rupees sitting in it. Sweep out any residual balance, settle the final bank charges, and then request closure in writing. Keep the closure confirmation, because you will attach it to the application and refer to it in the statement of accounts.

4 Get the balance sheet to zero

The company that files STK-2 should show a nil balance sheet: no assets, no liabilities, no bank balance, and reserves brought down to zero. If anything is still sitting on the books, resolve it before you file.

• Assets: sell, write off or distribute them so nothing remains. Fixed assets, deposits and receivables all need to be cleared.
• Liabilities: pay off or settle every creditor, loan and statutory due. The company cannot be struck off with liabilities outstanding.
• Bank balance: zero, matching the account closure above.
• Share capital and reserves: the accounts should net down to nil, so the closing statement genuinely shows a company with nothing left in it.

5 Documents and the filing process

Once the two dormant years are behind you, the account is closed and the balance sheet is nil, the paperwork is straightforward. The core set is:

6 Cost, timeline and the indemnity you sign

The government fee for STK-2 is ₹10,000. On top of that you will pay for the certified statement of accounts, the affidavits and indemnity bond, and professional fees for preparing and filing, so the all-in cost is higher than the bare fee. It remains far cheaper than a formal winding up.

On timing, expect around four to six months end to end. After filing, the registrar publishes the STK-7 public notice inviting objections, and once that window closes with no objection, the company’s name is struck off and the dissolution is notified in the Official Gazette.

7 Your STK-2 closure checklist

1. Confirm the company has been inoperative, with nil operational revenue, for two full financial years.
2. File all overdue annual returns and financial statements up to the date it became inactive.
3. Settle every liability, loan and statutory due down to zero.
4. Dispose of or write off all assets so nothing remains on the books.
5. Close every bank account and collect the bank closing statement.
6. Prepare a nil balance sheet and get the STK-8 statement of accounts certified within 30 days of filing.
7. Pass the board resolution and the special resolution or 75 percent members’ consent.
8. Execute the STK-3 indemnity bond and STK-4 affidavit from each director, then file STK-2 with the ₹10,000 fee.

8 FAQs

Disclaimer: This article is general information as of September 2026 and is not legal advice. The Companies Act, the strike-off rules and MCA fees can change over time. Confirm your specific position with a qualified professional before filing STK-2.