"Just stop filing and the company dies on its own": what striking off actually requires — and why 31 August 2026 matters

Every dormant private limited company in India has an owner who has been told the same thing: stop filing, stop responding, and after a few years the Registrar will remove the name from the register at no cost. It is one of the most expensive pieces of free advice in Indian corporate practice. The company does eventually get struck off — but by then the directors are personally disqualified under Section 164(2) of the Companies Act 2013, the DINs are frozen, and the late filing fees have compounded at Rs.100 per day per form with no upper ceiling. The correct route — a voluntary application in Form STK-2 — is available right now at 25% of the normal fee under the Companies Compliance Facilitation Scheme, 2026, and that window closes on 31 August 2026.

This piece explains the difference between striking off and winding up, when each one is the right instrument, exactly what STK-2 requires, and what the tax position is on closure.

What the law actually says

Two entirely different statutory routes exist for ending a company''s life, and they are not interchangeable.

Striking off operates under Section 248 of the Companies Act 2013, read with the Companies (Removal of Names of Companies from the Register of Companies) Rules 2016. Section 248(1) gives the Registrar power to remove a name on its own motion; Section 248(2) allows the company itself to apply after extinguishing all its liabilities, by special resolution or with the consent of 75% of members by paid-up share capital. The application is made in Form STK-2. Since 17 April 2023, every STK-2 in India is processed by the Centre for Processing Accelerated Corporate Exit (C-PACE), a single Registrar with pan-India jurisdiction, which has compressed the timeline from the old 6–12 months to roughly 3–6 months.

Section 248(6) is the provision most owners miss. It requires the Registrar, before passing the striking-off order, to satisfy itself that sufficient provision has been made for the realisation of all amounts due to the company and for the payment or discharge of its liabilities and obligations. And Section 250 makes the position after strike-off explicit: the company ceases to operate, but the liability of every director, manager, officer and member continues and may be enforced as if the company had never been dissolved. Striking off is not an amnesty.

Winding up is the formal liquidation route. Voluntary liquidation now sits under Section 59 of the Insolvency and Bankruptcy Code 2016 rather than the Companies Act, and involves appointing a registered Insolvency Professional as liquidator, a declaration of solvency by a majority of directors, public announcement to creditors, realisation of assets, distribution, and a final application to the NCLT for a dissolution order. Compulsory winding up by the Tribunal remains under Section 271 of the Companies Act 2013.

Which route applies to you. Strike-off is for a company that is empty — no assets to realise, no creditors to pay, no litigation, no disputes among members. Winding up is for a company that still has a balance sheet: assets that must be converted to cash, creditors who must be ranked and paid, or a surplus that must be distributed to shareholders in a legally defensible order. If there is anything to divide, you need a liquidator, not a strike-off form.

Certain companies are barred from Section 248 entirely. A company cannot apply under Section 248(2) if, in the preceding three months, it has changed its name, shifted its registered office to another state, disposed of property or rights held for value other than in the ordinary course of trading, engaged in any activity beyond what is necessary for making the application, or applied to the Tribunal for a compromise or arrangement. Listed companies, companies delisted for non-compliance, vanishing companies, Section 8 companies, and companies under inspection or prosecution are also excluded.

The 31 August 2026 window: what CCFS-2026 actually gives you

The Ministry of Corporate Affairs introduced the Companies Compliance Facilitation Scheme, 2026 by circular dated 24 February 2026. The scheme came into force on 15 April 2026, was originally valid to 15 July 2026, and was extended to 31 August 2026 by circular dated 8 July 2026.

Two distinct benefits matter here.

First, overdue annual filings — MGT-7/7A, AOC-4 and specified related forms — can be regularised at concessional additional fees instead of the standard Rs.100-per-day-per-form penalty that runs without a ceiling. For a company three years behind on both MGT-7 and AOC-4, the standard additional fee alone runs past Rs.2 lakh. Under the scheme it is a fraction of that.

Second, and directly relevant to closure: Form STK-2 filed during the scheme window attracts 25% of the applicable fee — Rs.2,500 instead of Rs.10,000.

Uptake tells you how real the problem is. As of 13 July 2026, 92,859 companies had availed the scheme, of which 11,829 had specifically filed Form STK-2 to close down. The MCA has indicated that while the scheme is open there are no grounds for enforcement action against companies that come forward. That protective posture ends when the window does.

The scheme does not cover everything. Section 8 companies cannot use CCFS-2026 for strike-off, and LLPs are outside its scope entirely — an LLP closure runs through Form 24 under the LLP Rules 2009, on its own separate track.

Practical implications: the real cost of waiting

Consider a private limited company incorporated in 2021 with Rs.1 lakh paid-up capital that stopped trading in 2023 and has filed nothing since.

Route A — do nothing. Non-filing for three consecutive financial years triggers Section 164(2). Every director of that company is disqualified for five years, and — critically — that disqualification attaches to the person, not the company. It freezes their DIN and bars them from being appointed or reappointed as a director in any company. A founder with one dead shell and two live businesses loses his board seat in all three. The Registrar will eventually strike the company off under Section 248(1) anyway, so the owner gets the outcome he wanted, plus a five-year disqualification he did not.

Route B — regularise and file STK-2 before 31 August 2026. Bring the overdue MGT-7 and AOC-4 filings current at concessional fees under CCFS-2026, then file STK-2 at Rs.2,500. Directors keep clean DINs. C-PACE typically disposes of the application in 3–6 months.

Route C — file STK-2 on 1 September 2026. Same forms, same outcome, Rs.10,000 instead of Rs.2,500, and the overdue annual filings now carry full additional fees at Rs.100 per day per form with no cap.

The delta between Route B and Route C, for a company three years behind, is routinely Rs.1.5 lakh to Rs.2.5 lakh. The delta between Route A and Route B is a five-year professional disqualification.

One tax point that trips people up. There is no separate "no objection certificate" from the Income Tax Department prescribed as an attachment to Form STK-2. What the form requires is a statement of accounts in Form STK-8, certified by a Chartered Accountant, made up to a date not earlier than thirty days before the date of application, showing nil assets and nil liabilities. But your income tax obligations do not disappear because the company''s name did. The return for the financial year in which the company ceased operations still has to be filed. Any TDS deducted and not deposited remains recoverable, and under Section 179 of the Income-tax Act 1961 — carried forward into the Income-tax Act 2025 — directors of a private company can be held jointly and severally liable for the company''s unpaid tax where recovery from the company fails, unless they prove the non-recovery was not attributable to any gross neglect, misfeasance or breach of duty on their part. Strike-off does not sever that. Clear the tax position before you close, not after.

Step-by-step: closing a dormant private limited company before 31 August 2026

• Confirm eligibility. Verify the company has not, in the preceding three months, changed its name, shifted its registered office interstate, disposed of property other than in ordinary trading, or applied for a compromise or arrangement. Confirm it is not a Section 8 company and not under inspection or prosecution.
• Close the bank account and obtain the closure certificate. This must be done before STK-2 is filed. The bank''s account-closure letter is a mandatory attachment.
• Extinguish every liability. Settle creditor dues, statutory dues, and any director loans. The balance sheet must show nil on both sides.
• Regularise overdue annual filings under CCFS-2026. File pending MGT-7/7A and AOC-4 at concessional fees. Do this before 31 August 2026.
• Get Form STK-8 certified. A CA-certified statement of accounts showing nil assets and nil liabilities, made up to a date not earlier than thirty days before the STK-2 filing date. Note that thirty-day window — a stale STK-8 is the single most common cause of C-PACE rejection.
• Pass the board resolution, then the special resolution. Board resolution approving the application; then a special resolution in general meeting, or written consent of 75% of members in terms of paid-up share capital.
• Execute the affidavit and indemnity bond. Form STK-4 (affidavit) and Form STK-3 (indemnity bond) from every director, notarised.
• File Form STK-2 with C-PACE at Rs.2,500. Attach the CA-certified STK-8, bank closure certificate, STK-3, STK-4, the special resolution with MGT-14 where applicable, and a statement regarding pending litigation.
• File the final income tax return. Cover the period up to cessation of business. Do not skip this because the MCA process is separate — Section 179 exposure survives the strike-off.
• Retain records for eight years. Section 250 keeps director and officer liability alive after dissolution. If someone applies to the NCLT under Section 252 to restore the company within three years, you will need the file.

FAQ

Can a struck-off company be revived?
Yes. An appeal lies to the NCLT under Section 252 within three years of the strike-off order, and the Registrar itself may apply within the same period where the removal was obtained by improper means. Revival is typically sought by creditors or by the company where a bank account or property was overlooked. It is a contested proceeding with cost and delay — plan the closure properly rather than relying on restoration.

My company has Rs.4 lakh of unsold inventory. Can I still use STK-2?
No. STK-2 requires nil assets in the CA-certified Form STK-8. Either dispose of the inventory and settle the proceeds before applying — noting that a disposal of property other than in the ordinary course of trading within the preceding three months bars the application — or use voluntary liquidation under Section 59 of the IBC 2016 with a registered liquidator.

Does striking off wipe out the company''s unpaid tax and GST dues?
No. Section 250 of the Companies Act 2013 expressly preserves the liability of directors, officers and members after dissolution. Under Section 179 of the Income-tax Act, directors of a private company can be made jointly and severally liable for unpaid company tax where recovery from the company fails. GST registration must be surrendered separately in Form GST REG-16 with final return GSTR-10.

Is the Rs.2,500 STK-2 fee the total cost of closing a company?
No — it is the MCA filing fee only. Budget separately for regularising overdue annual filings under CCFS-2026, CA certification of Form STK-8, notarisation of STK-3 and STK-4 for each director, the final income tax return, and GST deregistration if applicable. The point of the scheme is that Rs.2,500 plus concessional catch-up fees is dramatically cheaper than Rs.10,000 plus uncapped Rs.100-per-day additional fees from 1 September 2026.

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Twenty-seven days remain in the CCFS-2026 window. If you are holding a dormant company, the decision to make this month is whether it exits cleanly at concessional cost or drags your DIN down with it.

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