How to Strike Off a Defunct Company Under Section 248 of the Companies Act 2013

A company that stopped operating two years ago but has not been formally closed is not a dormant entity. It is a liability. Directors remain responsible for filing annual returns. Penalties accumulate on missed AOC-4 and MGT-7 submissions. The Section 164(2) disqualification clock is running. And if the ROC gets there first, the company gets struck off without the directors’ clean exit documentation in place, which creates complications for the same directors when they want to incorporate their next company.

When a company has stopped doing business and all of its liabilities have been settled, Strike Off a Company Under Section 248 is often the most efficient way to formally close it. Since May 2023, the process has been managed centrally through C-PACE, bringing down processing times from six to twelve months to less than sixty days in many standard cases. More than 38,600 companies have been dissolved through C-PACE since it became operational.

What Is the Legal Basis to Strike Off a Company Under Section 248?

Strike off a company under Section 248 of the Companies Act 2013 operates through two routes: compulsory strike-off initiated by the ROC under Section 248(1) when a company fails to commence business within one year of incorporation or the company is not carrying on any business or operation for a period of two immediately preceding financial years and has not applied for dormant status under Section 455, and voluntary strike-off under Section 248(2) where the company applies to the ROC after extinguishing all liabilities with consent of 75% of members by paid-up capital or through a special resolution.

Section 248 was notified effective December 26, 2016. The Companies (Removal of Names of Companies from the Register of Companies) Rules 2016 govern the procedural aspects, with the Companies (Removal of Names) Amendment Rules 2025 adding new compliance pre-conditions, specifically requiring that all pending annual returns be filed before an STK-2 application is accepted.

The two routes have different triggers and different consequences:

The voluntary route is almost always preferable. It allows the directors to control the documentation, the timing, and the exit narrative. A compulsory strike-off initiated by the ROC creates a less clean record and leaves questions during future due diligence on the same directors.

Who Is Eligible to Apply for Voluntary Strike Off a Company Under Section 248?

A company may opt for Voluntary Strike Off of Company under Section 248(2) if it has never carried on business or has remained inactive for two or more consecutive financial years. However, it can apply only after all liabilities have been cleared, bank accounts have been closed, and there are no pending legal proceedings involving the company. Section 249 explicitly bars companies from applying if they have changed their name, shifted registered office across states, made a disposal of property for value, or engaged in business in the three months before application.

The Section 249 bar conditions,  the ones most commonly overlooked. A company that sold assets, received payment from a client, or transferred its registered office across states in the three months before the STK-2 is filed cannot apply for the company strike off procedure India for that period. The three-month cooling-off must pass first.

Categories specifically barred from voluntary strike off:

• Listed companies
• Section 8 (non-profit) companies
• Companies with pending CIRP proceedings under IBC
•  Companies against which inspection, inquiry, or investigation has been ordered or is pending, or where prosecutions arising from such proceedings are pending
• Companies that have changed name, shifted registered office across states, or made property disposals for value within the preceding three months
• Companies with outstanding charges registered on the MCA portal
• Companies with outstanding public deposits or defaults relating thereto
• Companies against which an application for compromise or arrangement is pending before the Tribunal
• Companies with undischarged statutory dues (income tax, GST, EPF, ESIC)

An important change introduced by the 2025 Amendment Rules is that an STK-2 application cannot move forward until all pending annual returns have been filed. Companies must therefore bring their filing records up to date before applying for strike-off.

What Is the Step-by-Step Company Strike Off Procedure India?

For a Voluntary Strike Off of Company, the process involves passing the necessary board resolution, clearing all liabilities, closing bank accounts, preparing the STK-8 statement of accounts, obtaining shareholder approval, and completing STK-2 Form Filing through C-PACE on the MCA V3 portal. After filing, the ROC invites objections through a 30-day public notice and, in the absence of any objections, issues the final strike-off notification in Form STK-7.

Here is the sequence in full:

Step 1: Board Resolution

The board passes a resolution approving the decision to strike off a company under Section 248, authorising a director to file the STK-2 application, and directing the closure of all bank accounts and extinguishment of all liabilities.

Step 2: Extinguish All Liabilities

Every outstanding liability must be settled before the application is filed. This includes vendor dues, employee dues, loan repayments, statutory tax dues, and any other obligations. The CA preparing the STK-8 must certify that no liabilities remain.

Step 3: Close Bank Accounts

All company bank accounts must be closed before STK-2 is filed. Bank closure certificates are required as attachments to the application. A company that still has an active current account at the time of filing will have the application rejected.

Step 4: File Pending Annual Returns

All outstanding AOC-4 and MGT-7 filings must be completed up to the date of application. The 2025 Amendment Rules made this a hard pre-condition. ROC will not process STK-2 if pending returns appear on the MCA portal for the company.

Step 5: Statement of Accounts is in Form STK-8

A Chartered Accountant must prepare the Statement of Accounts in Form STK-8 showing the company’s financial position. The statement must not be older than 30 days from the date of filing the STK-2 application. This is one of the most commonly missed timing conditions.

Step 6: Obtain 75% Member Consent or Pass Special Resolution

Approval for the strike-off application can be obtained in one of two ways: through written consent from members representing at least 75% of the paid-up share capital or by passing a special resolution at a general meeting.

Step 7: STK-2 Form Filing

File Form STK-2 on the MCA V3 portal. The application is routed to C-PACE, not the local ROC. Attachments required:

• STK-3: Indemnity bond by directors (all directors must sign)
• STK-4: Affidavit by directors confirming no liabilities
• STK-8: CA-certified statement of accounts not older than 30 days
• Bank closure certificates for all accounts
• Special resolution or written consent of 75% members
• Statement regarding pending litigation (NIL declaration if none)
• Copy of board resolution

Step 8: C-PACE Review and Public Notice

C-PACE reviews the application. If complete, the ROC issues a public notice (Form STK-6) for 30 days inviting objections from creditors, employees, or any other interested party.

Step 9: Strike-Off Gazette Notification

After the expiry of the 30-day objection period, and provided no objections have been received, the ROC publishes the strike-off notification through Form STK-7. The publication of this notification marks the legal dissolution of the company and the removal of its name from the Register of Companies.

Under C-PACE processing, the typical total timeline from STK-2 filing to STK-7 gazette notification is now three to six months compared to six to twelve months under the pre-2023 system.

What Is the Suo Moto ROC Process to Strike Off a Company Under Section 248(1)?

When the ROC initiates compulsory strike off a company under Section 248(1), it sends Form STK-1 to the company and all its directors giving 30 days to respond. Companies can respond by filing STK-2 voluntarily, applying for dormant status under Section 455, or submitting a representation explaining why they should not be struck off. No response within 30 days results in the ROC proceeding with compulsory dissolution without the directors controlling the exit process.

The STK-1 notice from the ROC is not a warning letter. It is the beginning of a dissolution process. The four grounds on which ROC can initiate:

• Company has not commenced business within one year of incorporation
• Company has not carried on any business for two consecutive preceding financial years and has not applied for dormant company status
• Physical verification of registered office under Section 12(9) confirmed it is not operating
• Subscribers have not paid the subscription amount and no INC-20A declaration has been filed within 180 days of incorporation as required under Section 10A.

Since April 2023, C-PACE has dissolved over 38,600 companies, and many of these cases involved companies that had stopped filing annual returns for two or more consecutive years. For the ROC, the reason behind the non-compliance makes little difference. A company that quietly ceased operations but never completed its filings can face the same outcome as one that was completely abandoned.

What Happens to Directors After Strike Off a Company Under Section 248?

Section 248(7) of the Companies Act 2013 explicitly provides that strike off a company under Section 248 does not extinguish the liability of any director, manager, or member of the company. Every director remains personally liable for all obligations of the company as if the company had never been dissolved.

This is the provision most directors do not read carefully enough before applying for strike off. The legal dissolution of the company does not mean personal liability disappears. Under Section 248(7):

• Banks can pursue directors personally for outstanding loan obligations
• Income Tax authorities can raise demands against directors for pre-dissolution tax dues
• GST authorities can pursue directors for unpaid GST
• Employees can file claims against directors for unpaid wages and statutory dues
• Any creditor can initiate CIRP under IBC against the company’s assets (which vest with the Central Government on dissolution) within 20 years

Additionally, if it is subsequently discovered that strike off was obtained by misrepresentation or fraud, the ROC can restore the company to the register and directors face prosecution.

How Can a Struck-Off Company Be Revived Under Section 252?

A struck-off company can be restored to the Register of Companies through the NCLT under Section 252 of the Companies Act 2013. The application can be made by any member, creditor, or employee within 20 years of the STK-7 gazette notification date. The 20-year period applies to applications under Section 252(3). Appeals under Section 252(1) must be filed within three years. For voluntary strike offs, the company itself or any aggrieved party can apply. The NCLT has the power to restore the company as if it had never been struck off.

Voluntary strike off of company revival is less common than compulsory strike off revival, but it happens when assets are discovered after dissolution, tax demands arise, or business opportunities emerge that make restoration commercially valuable. The restoration procedure:

• File application to NCLT with jurisdiction over the company’s registered office
• Attach evidence of the company’s former existence, the reason for restoration, and compliance with any conditions the NCLT may impose
• If satisfied, the NCLT may order restoration of the company’s name and direct the Registrar of Companies to restore the company to the Register. The company must then file all pending annual returns and clear all statutory dues from the period of strike off to restoration

Conclusion

Strike off a company under Section 248 is the cleanest exit for a company that has genuinely stopped operating. The voluntary route through STK-2 form filing gives directors control over the timing and documentation. C-PACE has made the process significantly faster since 2023. The 2025 Amendment Rules have made the pre-conditions more stringent.

Two things do not change regardless of the route: the director’s personal liability under Section 248(7) survives dissolution, and any pending annual returns must be cleared before the application is processed. Companies that try to use strike off to escape compliance obligations or creditor pursuit are using the wrong mechanism 

Corporate Legit Consulting LLP manages the complete company strike off procedure India for Private Limited Companies and foreign-owned subsidiaries, covering pre-filing compliance clearance, STK-8 CA certification, STK-2 form filing through C-PACE, board and member resolution preparation, and post-strike off advisory on director liability. Reach out to Corporate Legit before filing the first resolution to ensure the preconditions are fully met.