Striking Off a Company in India — Fast Track Exit and Voluntary Strike Off

Closing a company in India is often more complex than opening one — but the Ministry of Corporate Affairs provides a simplified "Fast Track Exit" (FTE) route for companies that are inactive. Formally known as the Voluntary Strike-Off procedure under Section 248 of the Companies Act, 2013, this allows eligible companies to close legally within 3-6 months. Here is the complete guide.

When to Consider Striking Off

• The company has not commenced business within 1 year of incorporation
• The company has not been carrying on business for at least two immediately preceding financial years
• The promoters no longer wish to continue the company
• All liabilities have been settled and assets realised

Eligibility Conditions for Fast Track Exit (STK-2)

• No outstanding bank loans or borrowings
• No pending litigation in any court
• No pending investigations or inspections
• No outstanding statutory dues (tax, EPF, ESIC, etc.) — all dues must be cleared
• All previous ROC filings up to date (this is critical — pending filings must be filed first, with late fees)
• No ongoing business or significant accounting transactions in the past 2 years

Step-by-Step Process for Voluntary Strike-Off

Step 1 — Clear all dues and liabilities: Repay all loans, pay all statutory dues (income tax, GST, TDS, EPF), close all bank accounts.

Step 2 — File pending ROC returns: File all pending AOC-4 and MGT-7 returns (with late fees if applicable) — the company's ROC record must be clean.

Step 3 — Board Resolution: Pass a Board Resolution approving the application for striking off and authorising a director to sign the STK-2 application.

Step 4 — Shareholder Special Resolution: Pass a Special Resolution (75% majority) of shareholders approving the strike-off — if no dissenting shareholders, consent of majority suffices.

Step 5 — File Form STK-2: File Form STK-2 on the MCA V3 portal with: indemnity bond (STK-3), affidavit by directors (STK-4), statement of accounts showing nil assets and liabilities, and all relevant declarations. The filing fee for STK-2 is ₹10,000.

Step 6 — MCA Publication and Objection Period: The ROC publishes the striking-off notice in the Official Gazette and provides 30 days for any objections from creditors, regulators etc.

Step 7 — Strike-Off Order: If no objections, the ROC strikes the company's name from the Register and publishes the name removal notice in the Official Gazette. The company is officially dissolved.

Filing Pending Returns Before Strike-Off

Companies with years of unfiled returns often face huge late fees before they can file STK-2. The MCA has a Condonation of Delay (LLP/Company) scheme periodically — watch for amnesty windows that allow filing with reduced fees. SPOTON tracks these schemes and advises clients on the optimal timing.

Conclusion

Striking off an inactive company through the Fast Track Exit route is the cleanest way to close a company you no longer need. SPOTON provides end-to-end strike-off services — from clearing pending filings to submitting Form STK-2 and obtaining the ROC strike-off order. Contact us for expert company closure services across Kerala.