Key points
- Strike-off under Section 248 is available to a company that has not commenced business within a year or has had no business for two years and has no assets or liabilities.
- Voluntary liquidation under Section 59 of the IBC is for solvent companies that have assets to distribute or liabilities to settle formally.
- Directors remain liable for pre-closure defaults, and creditors can apply to restore a struck-off company within 20 years.
Strike-off
The company files STK-2 with the ROC after passing a special resolution, with a statement of accounts showing nil assets and liabilities (not older than 30 days), an indemnity bond and affidavit from each director, and no-objection from regulators where applicable. All overdue annual filings must be made first, and bank accounts closed. The ROC publishes a notice, and after 30 days strikes the company off. The process usually takes three to six months. Companies that have changed their name or registered office, made a disposal of property or filed a compromise application in the preceding three months are not eligible.
Voluntary liquidation
Where the company has assets, employees, tax refunds due or contracts to close out, a voluntary liquidation under Section 59 of the IBC is the correct route. Directors declare solvency, shareholders resolve to liquidate and appoint an insolvency professional as liquidator, creditors representing two-thirds in value approve, and the liquidator realises assets, settles claims, distributes the surplus and applies to the NCLT for dissolution. Timeline: nine to eighteen months.
Liability afterwards
Strike-off does not extinguish the liability of directors, officers or members for acts before dissolution. The NCLT can restore a company on an application by the ROC, a creditor or a member within 20 years if it was carrying on business or restoration is otherwise just.
Frequently asked questions
Can a company with pending litigation be struck off?
It should not be. The directors' affidavit requires disclosure of pending proceedings, and a strike-off obtained without disclosure exposes the directors to prosecution.
What if the ROC has already struck off my company for non-filing?
You can apply to the NCLT under Section 252 for restoration within three years, showing that the company was in operation or that restoration is just, and then complete the pending filings.
Is strike-off possible with unpaid tax dues?
No. All liabilities, including statutory dues, must be discharged and a nil liability statement filed; the Income Tax Department can object to the strike-off notice.
Related practice area: Corporate Compliance & Restructuring
This article is for general information and does not constitute legal advice. Laws, rules and limitation periods change and depend on the facts; please take advice on your own situation before acting. Reading this article does not create a lawyer-client relationship with Akhtars Legalitarian.