How to close a company?

Section 248 of Companies Act, 2013:

Where the Registrar has reasonable cause to believe that—

(a) a company has failed to commence its business within 1 year of its incorporation; or

(b) the subscribers to the memorandum have not paid the subscription which they had undertaken to pay within a period of 180 days from the date of incorporation of a company and a declaration under sub-section (1) of section 11 to this effect has not been filed within 180 days of its incorporation; or

(c) a company is not carrying on any business or operation for a period of two immediately preceding financial years and has not made any application within such period for obtaining the status of a dormant company under section 455.

In either of the above cases, he shall send a notice to the company and all the directors of the company, of his intention to remove the name of the company from the register of companies and requesting them to send their representations along with copies of the relevant documents, if any, within a period of 30 days from the date of the notice.


Applicable to Defunct Company to mean a company, which has nil assets and liabilities and

  • has not commenced any business activity or operation since incorporation; or
  • is not carrying over any business activity or operation for last one year before making application under FTE.

The fast track exit mode is not being extended to the following companies namely:-

  • companies where inspection or investigation is ordered and is being carried out or yet to be taken up or where the completed prosecutions arising out of such inspection or investigation are pending in the court;
  • companies accepted public deposits which are either outstanding or the company is in default in repayment of the same;
  • company is having a secured loan;
  • company is having a management dispute;
  • company is having dues towards income tax or sales tax or central excise or banks and financial institutions or any other Central Government or State Government departments or authorities or any local authorities.

Any defunct company desirous of getting its name struck off the Register under the sections 248 to 252 of the Companies Act, 2013 shall make an application in the Form STK-2, annexed electronically accompanied by filing fee of Rs. 5,000/-;

  • In all the cases, the Form STK-2, shall be certified by a Chartered Accountant in whole time practice or a Company Secretary in whole time practice or a Cost Accountant in whole time practice.
  • In case the applicant’s name is not available in the database of directors maintained by the Ministry, the application shall be accompanied by a certificate from a Chartered Accountant in whole time practice or a Company Secretary in whole time practice or a Cost Accountant in whole time practice along with their membership number, certifying that the applicants are present directors of the company.
  • The company shall disclose pending litigations if any, involving the company while applying under FTE.
  • If the pending prosecutions are only for non-filing of Annual Returns under section 266 G and Balance Sheet under section 240 A of the Companies Act 2013, such application may be accepted provided, the applicants have already filed the compounding application.
  • The Form STK-2 shall be accompanied by an affidavit annexed at Annexure- A, which should be sworn by each of the existing director(s) of the company to the effect that the company has not carried on any business since incorporation or that the company did some business for a period up to a date (which should be specified) and then discontinued its operations, as the case may be.
  • Form STK-2 shall further be accompanied by an Indemnity Bond, duly notarized, as annexed at Annexure B, to be given by every director individually or collectively, to the effect that any losses, claims and liabilities on the company, will be met in full by every director individually or collectively, even after the name of the company is struck off the register of Companies.
  • In case of foreign nationals and NRIs, Indemnity Bond and Affidavit may be notarized as per their respective country’s laws.
  • The Company shall also file a Statement of Account annexed at Annexure C, prepared as on the date not prior to more than one month preceding the date of filing of application in Form STK-2, duly certified by a statutory auditor or a Chartered Accountant in whole time practice, as the case may be.