Company Closure

Why close an inactive company or LLP?

• Stop recurring costs: avoid annual audit, ROC filing and accounting fees for a business that is not operating.
• Avoid penalties: inactive companies that do not file returns accumulate additional fees of ₹100 per day per form.
• Protect directors: non-filing can lead to disqualification of directors for five years, which affects all their other companies.
• Clean exit: a formal closure gives you documentary proof that the business ended lawfully.

Ways to close a company

• Strike-off (fast track exit): for companies with no operations and no liabilities, through Form STK-2 under Section 248 of the Companies Act, 2013. This is the most common route for small companies.
• Voluntary liquidation: for solvent companies with assets to distribute, under the Insolvency and Bankruptcy Code. It is more detailed and suited to larger companies.
• LLP strike-off: inactive LLPs apply to the ROC through Form 24.

Eligibility for strike-off

• The company has not started business within one year of incorporation, or
• The company has not carried on any business for the last two financial years and has not applied for dormant status
• The company has no assets or liabilities, or has settled all of them
• The bank account is closed and there are no pending litigations or government dues

Close or keep dormant?

If you plan to restart the business later, applying for dormant status may be better than closing. A dormant company has lighter compliance but keeps its name and registration. We help you choose the right option.

Documents required

• Board resolution approving the closure
• Special resolution or consent of at least 75% of shareholders by paid-up value
• Indemnity bond signed by every director (Form STK-3)
• Affidavit from every director (Form STK-4)
• Statement of accounts showing nil assets and liabilities, certified by a chartered accountant, not older than 30 days
• Proof of bank account closure
• Pending ROC filings, if any, completed before applying

Our company closure process

1. Review: we check MCA records, pending filings, bank accounts and tax registrations.
2. Clean-up: we file pending annual returns, close the bank account and cancel GST and other registrations.
3. Documentation: we prepare resolutions, indemnity bonds, affidavits and the statement of accounts.
4. Filing: we file Form STK-2 for companies or Form 24 for LLPs with the ROC, Chennai.
5. Follow-up: we track the application, respond to ROC queries and monitor the public notice period.
6. Closure: once the ROC publishes the strike-off notice in the Official Gazette, the company or LLP is formally dissolved.

Timeline and cost

Preparation usually takes one to two weeks, depending on pending filings. ROC processing and the notice period typically take a few months. The cost includes the government filing fee, any fees for pending filings and our professional fee, all shared upfront.

Frequently Asked Questions

Do I need to file pending annual returns before closing?

Generally yes. The company must usually be up to date with its financial statements and annual returns up to the end of the financial year in which it stopped operations.

What form is used to close a Private Limited Company?

Form STK-2 is filed with the Registrar of Companies, along with an indemnity bond, affidavits, a statement of accounts and the special resolution or consent of shareholders.

How do I close an LLP?

An inactive LLP with no liabilities can apply for strike-off by filing Form 24 with the ROC, after filing its pending annual returns and closing its bank account.

How long does company closure take?

After filing, the ROC reviews the application and publishes a public notice. Strike-off usually takes a few months, depending on processing time and any objections.