There are two usual ways to close a private limited company that can pay its debts: strike off its name by filing Form STK-2 (government fee ₹10,000), or wind it up through voluntary liquidation under section 59 of the Insolvency and Bankruptcy Code. Strike off suits a company with no business for 2 financial years and no liabilities left; voluntary liquidation suits a solvent company that still has assets or debts. This guide covers how to choose, when STK-2 becomes available, the costs people miss, the 2026 changes to voluntary liquidation, how to close an LLP with Form 24 and what a pending Bill would change.
Choosing how to close a private limited company
Three facts decide the route: whether the company has done any business recently, whether anything is left on its balance sheet, and whether it can pay every debt in full. If business stopped 2 full financial years ago and nothing is left, STK-2 is usually cheaper. If assets or debts remain, voluntary liquidation is the solvent route.
| Your situation | Usual route |
|---|---|
| No business for 2 full financial years, no assets or liabilities | Strike off (STK-2) |
| Never started business, more than a year since incorporation | Strike off (STK-2) |
| Solvent, but still owns assets or owes money | Voluntary liquidation, or clear everything and use STK-2 later |
| Cannot pay all its debts | Insolvency route before the NCLT; take advice first |
| Pending inspection, prosecution or compounding, or unsatisfied charges | Not STK-2; voluntary liquidation with full disclosure |
If the company may restart later, dormant status under section 455 is an alternative to closing it.
When can you file STK-2? Counting the two financial years
STK-2 needs 2 immediately preceding financial years with no business, so count whole years from 1 April. A company that stopped trading on 20 May 2024 traded in FY 2024-25, so its two empty years are FY 2025-26 and FY 2026-27, and it can apply from 1 April 2027.
Example. Bluepeak Foods Private Limited (a made-up company) stopped trading on 20 May 2024. Before applying in April 2027 it must file its overdue AOC-4 and MGT-7 up to the end of FY 2024-25, the year it stopped business, under the proviso added to rule 4 by G.S.R. 354(E). It must also clear all liabilities, pass a special resolution (or get consent of members holding 75% of the paid-up capital) and get a CA-certified statement of accounts not older than 30 days.
Two timing rules can delay this further:
- If the ROC has already started striking the company off on its own, all pending financial statements and annual returns must be filed first. Once the ROC issues its notice under section 248(5), STK-2 can no longer be filed.
- In the previous 3 months the company must not have changed its name, moved its registered office to another state, sold for gain property it held for trading when business stopped, or done anything beyond closing its affairs and meeting statutory duties (section 249).
What closing a company costs, and the cost people miss
The STK-2 government fee is ₹10,000, raised from ₹5,000 on 10 May 2019. The cost that surprises people is the additional fee on overdue annual returns, which must be cleared first. Voluntary liquidation has no single government fee; the liquidator, registered valuer and audit are the main costs.
For example, if Bluepeak's FY 2024-25 AOC-4 and MGT-7 were due on 30 October 2025 and 29 November 2025 and are filed on 20 October 2026, the additional fees come to ₹35,500 and ₹32,500, or ₹68,000. That is almost seven times the STK-2 fee, and it grows by ₹200 a day while both stay unfiled. Work out your own figure with the MCA late fee calculator before you decide, and find the original due dates in the ROC compliance calendar.
Voluntary liquidation in 2026: time limits and a new way out
A majority of directors declare on affidavit that the company has no debt or will pay it in full from its assets. Within 4 weeks, members pass a special resolution appointing an insolvency professional as liquidator. Since 26 May 2026, the process must be completed within a period, to be specified, of not more than one year.
The main time limits under the IBBI voluntary liquidation regulations:
- If the company owes any debt, creditors holding two-thirds in value must approve the resolution within 7 days.
- The ROC and IBBI must be notified within 7 days of the resolution or the creditors' approval.
- The liquidator aims to file the final report within 90 days of the start of liquidation, or 270 days where creditors approved it. The NCLT then orders dissolution.
Section 41 of the IBC (Amendment) Act 2026, in force from 26 May 2026 under S.O. 2625(E), added the one-year outer limit and a way to stop. Before the dissolution application is filed, members can end the liquidation by special resolution, with approval of creditors holding two-thirds in value within 7 days if debts are owed. Since 2 June 2026, regulation 42 of the IBBI regulations also requires the resolution to state the reasons and how liquidation costs are treated, and the liquidator to report the termination to the NCLT. The termination takes effect when the liquidator informs the ROC.
Closing an LLP: Form 24 or voluntary liquidation
An LLP that has carried on no business for a year or more can apply to the Registrar, C-PACE, in Form 24 to strike off its name. The government fee is ₹500 for a small LLP and ₹1,000 for others. A solvent LLP that still has assets or debts uses voluntary liquidation instead.
Before Form 24, an LLP usually needs no assets or liabilities, its overdue Form 8 and Form 11 filed, the authority of all partners, a statement of accounts and an affidavit from the designated partners. Overdue Form 8 and Form 11 pay a multiple of the normal fee, plus a daily charge after 360 days, so file them first.
For voluntary liquidation, the declaration of solvency comes from a majority of the designated partners, and the partners pass the resolution by special majority. The same creditor approval, notification and time limits apply as for a company.
Loose ends to tie up before you apply
The STK-8 statement of accounts must show the company's assets and liabilities as certified by a CA within the last 30 days, so settle the last payments and close the books before it is prepared. Then close the accounts and registrations the company no longer needs.
- Pay the final dues and close the bank account once nothing remains to pay or collect.
- Cancel the GST registration if the company has one; Ofin handles GST registration cancellation.
- For a company regulated by RBI, SEBI or IRDAI, get the regulator's no-objection certificate, which goes with STK-2.
What the Corporate Laws (Amendment) Bill 2026 would change
The Corporate Laws (Amendment) Bill 2026, introduced in Lok Sabha on 23 March 2026, would change the strike off rules. None of this applies until the Bill is passed and notified.
- Companies could apply for strike off on independent grounds, without relying on the grounds in section 248(1), with liabilities extinguished in a prescribed manner.
- The ROC's own strike off power would also cover a company that has not filed financial statements or annual returns for two consecutive financial years before the previous one.
- The fine of up to ₹1 lakh under section 249 would become a penalty of ₹50,000.
- Appeals under section 252(1) against a strike off would go to the Regional Director instead of the Tribunal.
How Ofin can help
Ofin's company closure service prepares the special resolution, STK-3, STK-4, the STK-8 statement and STK-2, from ₹15,847. For an LLP, LLP closure starts at ₹9,999. For voluntary liquidation, a CA or CS reviews your case and quotes a fixed fee upfront.
