Closing a Company in Kerala: Voluntary Strike-Off under Section 248

A company that has stopped doing business, or never started, continues to have filing obligations, and its directors remain responsible for them, until it is formally closed. For a company without assets or liabilities, the simplest way to close it is to apply to the Registrar to strike its name off the register under section 248(2) of the Companies Act, 2013. A company with assets or liabilities to be dealt with is closed by voluntary winding up instead.

This article explains the conditions, documents and procedure for voluntary strike-off, with reference to companies in Kerala. Restoration of a company that has been struck off is covered in restoring a company after strike-off.

Ways a company can be closed

Route	Suited to	Authority
Voluntary strike-off (section 248(2))	A company with no assets and no liabilities, that has ceased business or never commenced it	Registrar of Companies, processed through C-PACE
Strike-off by the Registrar (section 248(1))	Not a choice: the Registrar acts against non-operational or defaulting companies	Registrar of Companies
Voluntary winding up under the Insolvency and Bankruptcy Code	A solvent company with assets to be realised and distributed, or liabilities to be settled	Liquidator, with an order of the NCLT
Dormant status (section 455)	A company that wants to stay in existence without active business, for example to hold an asset or a name	Registrar of Companies

See strike off vs dormant company.

Conditions for voluntary strike-off

• The company has not carried on any business or operation for the two immediately preceding financial years, or has not commenced business within one year of incorporation.
• All liabilities have been extinguished. The company should have no outstanding loans, dues to creditors, tax demands or other obligations.
• The company has a special resolution passed by its members, or the consent of at least 75% of its members in terms of paid-up share capital.
• The company has filed its financial statements and annual returns up to the end of the financial year in which it ceased business.

Under section 249, a company cannot apply for strike-off if, in the previous three months, it has changed its name or shifted its registered office from one State to another, disposed of property or rights held for business, or engaged in any activity other than that needed for the strike-off; or if it has a pending application before the NCLT for a scheme of compromise or arrangement, or is being wound up. Companies under investigation, or with prosecution pending, are also not permitted to use this route.

Documents

• Form STK-2, the application for removal of name, with the prescribed fee
• Indemnity bond in Form STK-3 from every director
• Affidavit in Form STK-4 from every director
• Statement of accounts showing assets and liabilities, made up to a date not more than 30 days before the application, certified by a chartered accountant
• Copy of the special resolution, or the consent of members holding 75% of the paid-up capital
• Board resolution approving the application
• Where applicable, approval or no-objection from a sector regulator

Procedure

1. Close the business: settle all liabilities, close bank accounts after settlement, and cancel or surrender registrations such as GST.
2. Bring filings up to date: file financial statements and annual returns up to the end of the financial year in which the company ceased business.
3. Pass the resolutions: board resolution and members’ special resolution (or consent).
4. File STK-2 with the attachments. Since 2023, voluntary strike-off applications are processed centrally by the Centre for Processing Accelerated Corporate Exit (C-PACE).
5. Public notice: if the application is in order, the Registrar issues a public notice in Form STK-6, inviting objections within 30 days, published on the MCA website, in the Official Gazette and in newspapers.
6. Strike-off: after considering any objections, the Registrar strikes off the name and publishes a notice in the Official Gazette in Form STK-7. The company stands dissolved on publication.

Liability after strike-off

Strike-off does not extinguish the liability of directors, officers and members. Under section 248(7), their liability continues and can be enforced as if the company had not been dissolved. The indemnity bonds given by the directors make them personally responsible for any liability that surfaces later. This is why liabilities must genuinely be settled before applying, and why tax and other registrations should be closed properly.

Points specific to Kerala

• Companies registered in Kerala come under the Registrar of Companies, Ernakulam. Voluntary strike-off applications are, however, processed by C-PACE.
• Before closing, a company should surrender local body licences, cancel registration under the Kerala Shops and Commercial Establishments Act and profession tax enrolment, and obtain clearance on any pending local tax or labour dues.
• Where a company holds land or a building in Kerala, it cannot be struck off without first dealing with the property. Voluntary winding up is the route in that case.

Frequently asked questions

How long does voluntary strike-off take?

Once STK-2 is filed and found in order, the public notice period is 30 days, and the strike-off follows. Applications with defects are returned for resubmission, which adds time.

Can a company with a bank loan be struck off?

No. All liabilities must be extinguished before applying. A company with outstanding loans or other liabilities must settle them first or go through winding up.

What happens if a company simply stops filing?

The Registrar may strike it off under section 248(1), and its directors can be disqualified for non-filing for three years. Voluntary closure avoids these consequences.

ചുരുക്കം (Summary in Malayalam)

ബിസിനസ് നടത്താത്തതും ബാധ്യതകളില്ലാത്തതുമായ കമ്പനിയെ STK-2 ഫോമിൽ ROC-യ്ക്ക് അപേക്ഷ നൽകി സ്വമേധയാ അടച്ചുപൂട്ടാം. എല്ലാ ബാധ്യതകളും തീർക്കുകയും ബിസിനസ് നിർത്തിയ വർഷം വരെയുള്ള റിട്ടേണുകൾ ഫയൽ ചെയ്യുകയും വേണം. ഡയറക്ടർമാർ STK-3 ഇൻഡെംനിറ്റി ബോണ്ടും STK-4 സത്യവാങ്മൂലവും നൽകണം. പേര് നീക്കം ചെയ്തതിന് ശേഷവും ഡയറക്ടർമാരുടെ ബാധ്യത തുടരും. ആസ്തികളോ ബാധ്യതകളോ ഉള്ള കമ്പനിക്ക് സ്വമേധയാ ലിക്വിഡേഷനാണ് ശരിയായ മാർഗം.

This article gives a general overview of voluntary strike-off under the Companies Act, 2013. Forms, fees and procedures are revised from time to time; for accurate and current requirements, refer to the MCA portal. The article is not advice on any particular case.