Form STK-2 — voluntary strike-off for dormant companies (the clean exit)

What Sec 248 does

Section 248 of the Companies Act 2013 lets the Registrar strike off a company from the register on grounds of non-operation. Two routes:

• Sec 248(1): ROC suo motu strikes off after issuing show-cause notice. Mostly involuntary — for companies that ROC believes are shell / non-functional.
• Sec 248(2): Voluntary application by the company itself via Form STK-2. Faster, cleaner, fully controlled by the company.

Eligibility for Sec 248(2) voluntary strike-off

The company must satisfy ALL of the following:

1. Has been a "defunct" or "inactive" company. Rule 4(1) of Companies (Removal of Names) Rules 2016 defines this as not carrying on any business or operation for the immediately preceding two financial years, AND not having filed application for status as a dormant company under Sec 455.
2. Has extinguished all its liabilities.
3. Has obtained consent of ≥ 75% of its members (in value of paid-up capital) by special resolution.
4. Bank accounts closed (zero balance, account closed certificate from bank).
5. No pending litigation / prosecution.
6. No charges registered against assets that are still active.

What Sec 248(2) needs — and doesn't

Since 1 May 2023 you must first file overdue financial statements (AOC-4) and annual returns (MGT-7) up to the end of the financial year in which the company stopped business — with their late fees. Filings for the years after that are not required. The voluntary path does NOT require:

• ✗ AOC-4 / MGT-7 for the years after business stopped
• ✗ Filing the income tax return for the past 2 years
• ✗ Settling MCA late fees that have accumulated

So the backlog is only partly avoided: filings up to the year business stopped must be made first; the ones after it are not needed.

Companies that CANNOT use STK-2

• Listed companies.
• Companies registered under Sec 8 (charitable).
• Vanishing companies.
• Companies whose application for compounding is pending.
• Companies against which prosecution is pending.
• Companies that have made any change in name / shifted registered office in the past 3 months.
• Companies that have engaged in any non-trivial activity in the past 2 FYs.

The documentation kit

1. Board resolution approving strike-off application.
2. Special resolution of members (75% in value) — copy in Form MGT-14 (filed within 30 days of EGM).
3. Indemnity bond by every director (notarised, ₹100 stamp paper per director) — Form STK-3.
4. Affidavit by every director — Form STK-4 — stating: no liabilities, no operations, no pending prosecution, all statements are true.
5. Statement of accounts certified by a Chartered Accountant (Form STK-8) — not older than 30 days from filing date.
6. Bank account closure certificates for every account the company had.
7. PAN of the company.
8. Latest available financial statements (not necessarily filed in MCA, but signed by directors).
9. NOC from creditors if any creditor balance is outstanding.
10. Consent of all directors with DSC.

The 4-6 month timeline

Tax-side closure — the parallel track

STK-2 closes the company under the Companies Act, but the Income-tax Act has its own track:

• File IT return up to date of strike-off to crystallise any tax position.
• Surrender PAN of the company after strike-off (Form PAN application — surrender).
• Surrender GST registration (GST REG-16).
• Surrender TAN (if any).

If the company is dormant with NIL income, the IT filings can be NIL returns up to the strike-off year. If there's any unsettled IT scrutiny / demand, settle or appeal first — STK-2 doesn't extinguish IT department dues.

Common pitfalls

1. Forgetting the 2-year inactivity test. If the company had ANY operational activity (even a single ₹1,000 invoice) in the past 2 FYs, STK-2 is rejected. Plan the application timing carefully.
2. Bank account not closed. Bank closure certificate is mandatory. Some banks take 30-60 days. Initiate closure before STK-2.
3. Existing creditor. Even a ₹500 unpaid vendor blocks STK-2. Either settle or get a NOC.
4. Stale CA statement of accounts. Must be within 30 days of STK-2 date. If filing is delayed, refresh the CA certificate.
5. Director DSC expired. All directors must sign STK-2 with DSC. Renew before filing.
6. Pending litigation. Any court case (consumer, civil, commercial) blocks STK-2 until disposed.
7. Charge not satisfied. Any registered charge (loan, hypothecation) must be satisfied via Form CHG-4 before STK-2.

Cost comparison — strike-off vs catch-up filing

For a company that is genuinely finished, STK-2 is usually cheaper than keeping it alive, because the filings stop at the year business stopped. The reason to keep filing instead is if the company still has operational potential.

What if STK-2 is rejected

If ROC raises objections you can't resolve (eg. an undisclosed liability surfaces), you can:

1. Address the objections and re-file STK-2 (you can withdraw the existing application).
2. Catch up the backlog filings if the dispute is small.
3. Approach the NCLT for winding up under Sec 271 (full wind-up route) — expensive and slow.

Restoration — if you change your mind

A company struck off under Sec 248 can be restored to the register by NCLT under Sec 252 if any aggrieved person applies within 20 years. The grounds include the company being struck off when it had ongoing operations. Restoration is doable but litigation-heavy. Once struck off, generally treat it as final.

Bottom line

STK-2 is the cleanest, cheapest exit for dormant companies. Filings stop at the year business stopped, so it avoids the years of late fees that follow. The eligibility is strict (genuinely dormant, no liabilities, no litigation), but if you meet it, the path is well-tested. Plan the timing, close the bank, get the CA certificate, file. 4-6 months later your company is off the register — and you stop carrying it as a compliance liability.

Related

• STK-2 eligibility checker
• AOC-4 + MGT-7 annual filing
• DIR-3 KYC every three years
• DPT-3 annual deposit return