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Strike Off refers to the process of deleting the company's name from the Register of ROC. It is more akin to the Company being closed, as the Company will cease to exist following the Strike Off and will be unable to do any business thereafter.
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Close the Pvt Ltd Company

An Overview - Close the Pvt Ltd Company

Failure to maintain consistency for a business may result in fines and may also restrict the Directors from fusing another business. Following that, if a private limited organisation has been dormant and there are no cash exchanges within the organisation, it is prudent to wind up the business.

The investors in a company might initiate the wilful or voluntary closure of the company. If there are any protected or unbound banks or representatives on the books, the extraordinary duty must be settled. When all levies have been paid, the company's ledgers must be closed. Finally, the company must channel any outstanding compliance obligations, such as a personal government tax payment or yearly filing, and must surrender the GST registration. After concluding all normal procedures and surrendering enrolments, the company application request can be documented and sent to the Ministry of Corporate Affairs.

Pre-conditions to be fulfilled to Close the Company

The following conditions may result in the company being struck off:

  • When a business does not begin operations within one year after formation.
  • When a company has not conducted any business or activity for a period of two consecutive fiscal years and has not filed an application for dormancy during that time period.

The company cannot be struck out if the following occurred during the last three months:

  • The company's name has been changed or its registered office has been relocated to another state.
  • Made a disposition in exchange for the worth of its property or rights (subject to conditions).
  • Engaged in any other activity that is not required or expedient for the purpose of submitting an application under the applicable paragraph, and so forth.
  • Applied to the Tribunal for the grant of a Compromise or Arrangement, but no consensus has been reached.
  • Been wound up in accordance with Chapter XX, whether voluntarily, by the Tribunal, or pursuant to the 2016 Insolvency and Bankruptcy Code (IBC).

Documents required to Close the company

The following documents are necessary for the company's closure:

  • The company's PAN card.
  • Confirmation of the company's record being shut down.
  • A reimbursement bond, which must be authenticated by government officials.
  • The most recent announcement of the company's financial statements.
  • Declaration of all records pertaining to the company's assets and liabilities, as determined by a chartered accountant (CA).
  • Validation of 3/4ths of the board members' support for the objectives.
  • Request to have the company's name removed.

Procedure to Strike off the Company in India

The following steps apply to the dissolution of a private limited company:

  • Stage 1: The first step in voluntary winding up a private limited business is to convene a Board Meeting with at least two Directors. Pass a resolution stating that the Directors have conducted an investigation into the Company's operations and that, as a result, they have formed the supposition that the company has no obligations or that it will be able to cover its financial obligations through the proceeds of the benefits sold in the voluntary winding up of the organisation. Similarly, establish the date, location, time, and purpose of a General Meeting of the Company to be held five weeks after this Board Meeting.
  • Stage 2: Publish an advertisement in the form of a written statement announcing the company's General Meeting and presenting the purposes, along with an adequate logical explanation.
  • Stage 3: At the General Meeting, pass the company's standard aims for closure by a majority vote or unique resolutions by a 3/4 vote. The company's closure will begin on the date these resolutions are moved.
  • Stage 4: On the same day or the following day as the resolution to close the Company is introduced, prepare and convene a meeting of the Creditors. If 66 percent of the company's money investors believe that it is in the company's best interest to cover all interests, the company can be closed down deliberately. If the company is unable to satisfy all of its liabilities upon winding up, the Company must be wound up by a Tribunal.
  • Stage 5: Within ten days of moving the decision to dissolve the company, file with the Registrar a notification requesting the assignment of the liquidator.
  • Stage 6: Within 14 days of announcing the company's intentions for dissolution, publish a notice of the purpose in the Official Gazette and advertise them in a newspaper with distribution in the region where the enrolled office is located.
  • Stage 7: Within 30 days of the company's General Meeting for the purpose of dissolving the company, ensure that duplicates of any common or unique resolutions moved at the General Meeting for the purpose of dissolving the company are maintained.
  • Stage 8: Complete the company's projects and appoint suppliers to represent the company's closure and have the equivalent reviewed.
  • Stage 9: Call for the Company's conclusive and last General Meeting.
  • Stage 10: Adopt special goals for the closure of the company's books and accounts when the company's operations have been totally shut down and are about to be terminated.
  • Stage 11: Within about fourteen days of the Company's last General Meeting, duplicate the records and file an application with the Tribunal requesting that the company be liquidated.
  • Stage 12: If the Tribunal's requirements are met, the Tribunal will issue a request for the company's dissolution within 60 days of receiving the application.
  • Stage 13: As the final stage in the procedure for voluntary dissolution of a private limited company, the company vendor must file a duplicate of the request with the Registrar.
  • Stage 14: Upon receipt of a duplicate of the Tribunal's decision, the Registrar will publish a notice in the Official Gazette indicating the company has been closed. This concludes the different actions necessary to close a Private Limited Company.

FAQs on Strike off the company

Strike Off refers to the process of deleting the company's name from the Registrar of Companies' Register of Companies. It is more akin to the Company being closed, as the Company will cease to exist following the Struck Off and will be unable to do any business thereafter.
It typically takes at least three months for a company to be dissolved officially, however this time frame can vary significantly if the process is complicated. However, a company will generally cease to exist no later than three months after the winding-up notice is published in the Gazette.
Any individual affected by a Company Strike Off order may appeal / petition / apply to the NCLT for Revival of the Struck Off Company within three years of the date of the registrar's order, and the burden of evidence would be on the person appealing for revival.
After being Struck Off, the company will cease to exist and will be unable to conduct any business.
The ROC has right to Strike off a company if:-
  • If within one year of its registration the company fails to start its business, and
  • If a company has not furnished any application to get dormant status, being not operational for 2 financial years.

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