The closure of a private limited company is a significant legal decision that requires proper compliance under the Companies Act, 2013. One of the most commonly used methods for company closure is the strike-off of a company, which allows businesses to remove their name from the register of companies maintained by the Ministry of Corporate Affairs (MCA).
In recent years, many inactive or non-operational companies have struggled with compliance burdens and heavy penalties due to non-filing of statutory returns. To address this issue, the government has introduced the Companies Compliance Facilitation Scheme, 2026 (CCFS-2026), which provides major relief by reducing filing fees and simplifying compliance requirements.
This scheme has made the process for striking off a company more accessible and cost-effective, especially for businesses that wish to legally exit without going through lengthy liquidation procedures.
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What is Strike-Off of a Company?
The strike-off of a company refers to the process of removing the name of a company from the MCA register, effectively dissolving it as a legal entity.
This process is governed under Section 248 of the Companies Act, 2013, and is typically used by companies that:
- Have ceased business operations
- Have no liabilities
- Do not intend to continue in the future
Once the strike-off is completed, the company legally ceases to exist.
Closure of Pvt Ltd Company vs Winding Up
Many people confuse closure of pvt ltd company through strike-off with winding up. However, both processes are fundamentally different:
| Basis | Strike-Off | Winding Up |
| Complexity | Simple | Complex |
| Cost | Low | High |
| Time | 3–6 months | 1–2 years |
| Tribunal Involvement | Not required | Required (NCLT) |
| Suitability | Inactive companies | Companies with liabilities |
For inactive businesses, company closure through strike-off is the most efficient option.
Legal Basis for Company Strike-Off Procedure
The company strike off procedure is governed by:
- Section 248 of Companies Act, 2013
- Rule 4–9 of Companies (Removal of Names of Companies from Register) Rules, 2016
The application for strike-off is made through Form STK-2, which is the most important document in this process.
When Can a Company Apply for Strike-Off?
A company can apply for closure of private limited company through strike-off if:
- It has not commenced business within 1 year of incorporation
- It has not carried on business for the last 2 financial years
- It has no assets or liabilities
- It has obtained consent from shareholders
When Strike-Off is NOT Allowed
A company cannot apply for strike-off if it has:
- Ongoing legal proceedings
- Outstanding liabilities
- Pending ROC filings
- Default in statutory compliances
However, this is where CCFS-2026 becomes highly relevant.
Role of CCFS-2026 in Company Closure
The Companies Compliance Facilitation Scheme, 2026 plays a crucial role in enabling companies to proceed with company closure.
Key Benefits for Strike-Off:
1. Reduced Filing Fees
Companies can complete pending filings by paying only 10% of additional fees.
This helps companies clear compliance backlog before filing STK-2.
2. Discount on STK-2 Filing
Under MCA Scheme CCFS 2026, STK-2 can be filed at just 25% of normal fees.
This significantly reduces the cost of closure of Pvt Ltd Company.
3. Opportunity to Regularize Compliance
Many companies were earlier unable to apply for strike-off due to Non-filing of AOC-4 and MGT-7.
Now, they can complete filings at reduced cost and Proceed with strike-off.
4. Immunity from Prosecution
The scheme provides immunity for delayed filings (subject to conditions), making the process for striking off a company legally safer.
Step-by-Step Process for Striking Off a Company
Here is the complete process for striking off a company:
- Step 1: Board Meeting
- Pass resolution for closure
- Approve strike-off proposal
Step 2: Clear Liabilities
- Pay off all creditors
- Close bank accounts
- Dispose assets
Step 3: Obtain Shareholder Approval
- Pass special resolution (75% consent)
Step 4: Prepare Documents
Documents required for Form STK-2:
- Indemnity Bond (STK-3)
- Affidavit (STK-4)
- Statement of Accounts
- Board Resolution
- Special Resolution
- Copy of PAN
Step 5: File Pending ROC Returns
Before applying, ensure:
- AOC-4 filed
- MGT-7 filed
MCA Scheme CCFS 2026 reduces cost here significantly.
Step 6: File Form STK-2
- Submit STK-2 on MCA portal
- Pay reduced fee (25% under scheme)
Step 7: ROC Verification
ROC will Issue public notice and Verify documents
Step 8: Strike-Off Approval
If satisfied, ROC will:
- Remove company name
- Update strike off company status
Documents Required for STK-2
- Form STK-2
- Indemnity bond
- Affidavit
- Statement of accounts (not older than 30 days)
- Copy of resolutions
- DSC of directors
Advantages of Strike-Off
- Cost-effective
- Simple process
- No tribunal involvement
- Quick closure
- Ideal for inactive companies
Conclusion
The closure of a private limited company through strike-off of a company is the most efficient method for businesses that are no longer operational.
With the introduction of CCFS-2026, the government has significantly reduced compliance costs and simplified the process for striking off a company. Companies that were previously stuck due to heavy penalties can now regularize filings and proceed with closure at minimal cost.
This scheme presents a limited-time opportunity for businesses to clean up their compliance status and legally exit without financial burden.
If utilized correctly, CCFS-2026 can make company closure faster, cheaper, and legally smooth.