Closing a business is as important Whether it's a closure of Private Limited Company or a Limited Liability Partnership (LLP), if the business is no longer operational, it's essential to legally shut it down. Many businesses simply stop operations without formally closing, but this can lead to penalties, legal liabilities, and compliance burdens.
Closure of a Company Using Form STK-2
- What is Form STK-2?
Form STK-2 is the application for Strike Off of a company’s name from the MCA register under Section 248(2) of the Companies Act, 2013. This is a voluntary closure method for companies that are no longer in operation and want to legally shut down.
- Who Can File STK-2?
A company can file Form STK-2 if:
It has not commenced business since incorporation or has not carried out any operations for at least 2 years.
It has no outstanding liabilities.
It has filed all pending returns and financials with the ROC.
It is not involved in any ongoing legal proceedings.
Note: Companies regulated by authorities like RBI, SEBI, or IRDA need prior approval before filing STK-2.
- Legal Provision
The process is governed under Section 248(2) of the Companies Act, 2013, read with Rule 4 of the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016.
- Documents Required for STK-2
Certified true copy of Board resolution and special resolution.
Affidavit and Indemnity Bond from all directors (Form STK-3 and STK-4).
Statement of accounts certified by a Chartered Accountant, not older than 30 days.
PAN and Aadhar of directors.
Income tax return acknowledgment.
NOC from regulatory authorities (if applicable).
- Filing Process of STK-2
Hold a Board Meeting to approve the closure.
Conduct a General Meeting and pass a special resolution.
Prepare all required documents.
File Form STK-2 online on the MCA portal with a fee of ₹10,000.
After verification, the ROC will publish a public notice, and if no objections are raised, the company’s name will be struck off.
Closure of LLP Using Form 24
What is Form 24?
Form 24 is the application form for striking off the name of a Limited Liability Partnership from the register maintained by the Registrar. It is filed under Rule 37 of the LLP Rules, 2009.
- Who Can File Form 24?
An LLP can file Form 24 if:
It is not carrying any business for at least one year.
It has no liabilities or creditors.
It has filed all overdue returns (Form 8 and Form 11).
It has closed its bank account, and the evidence is available.
- Legal Provision
Closure through Form 24 is governed by Rule 37 of the Limited Liability Partnership Rules, 2009, read with Section 75 of the LLP Act, 2008.
- Documents Required for Form 24
Application letter from the LLP.
Consent of all partners for closure.
Affidavit and Indemnity Bond by designated partners.
Latest Statement of Accounts (not older than 30 days), certified by a CA.
Copy of the LLP Agreement.
Proof of closure of bank account.
PAN Card of LLP.
- Filing Process of Form 24
Pass a resolution by all partners to apply for strike off.
Prepare all necessary documents.
File Form 24 online with MCA using DSC of a designated partner.
Attach required documents and submit.
The ROC will examine the application, and upon satisfaction, strike off the LLP’s name.
FAQs on Closure Using Form STK-2 and Form 24
- Can I close a company without filing annual returns?
No, all pending financial statements and annual returns must be filed before applying for closure via STK-2.
- What happens if I don’t formally close my inactive LLP or company?
It may attract penalties for non-filing and the directors or partners can be disqualified under Section 164 of the Companies Act.
- Is there any government fee for Form 24?
No filing fee is charged for Form 24, but professional charges may apply if you consult a CA or CS.
- Can I apply for closure if the company or LLP has active bank accounts?
No. You must close all bank accounts and provide closure proof before filing for strike off.
- Can legal heirs file Form 24 for a deceased partner’s LLP?
Legal heirs can act on behalf of deceased partners only after obtaining legal succession documents and updating ROC records.
- Can I restore the company or LLP after strike off?
Yes. You can apply for revival within 20 years (for companies) under Section 252 and 3 years for LLPs through NCLT.
Conclusion
Whether you’re winding down a startup that didn’t scale or an LLP that served its purpose, closing it properly ensures peace of mind and avoids legal or financial trouble in the future. Form STK-2 and Form 24 are streamlined, digital-friendly processes provided by MCA to help businesses exit cleanly.
Before proceeding, ensure your business has no liabilities, pending returns, or legal issues, and always keep your documents in order. Taking professional assistance from a Chartered Accountant or Company Secretary can help avoid errors and delays.
