Close Company

The process of shutting down a business is referred to as closing a company, winding up, or liquidating a company. This entails paying all liabilities, distributing the residual property, and de-listing the company. The process is done according to the Companies Act of 2013 in India.

Partly removal of names of companies is provided under Section 248 of the Companies Act, 2013. This section provides two ways to close a company:

1.  Voluntary closure by the company itself

        2. Closure initiated by the Registrar of Companies (ROC)

For voluntary closure, the company is required to apply to the ROC in Form STK-2. The company has to establish that it has not been carrying on business for a period as specified under Section 248.

Before proceeding, it is paramount to distinguish between the process of closing a company and that of selling or transferring ownership. If you shut a business down, it is dissolved and no longer legally recognized as a business.

At Compregi, we know that it can be difficult to understand the legal procedures for closing a company. We have the best team of professionals who will assist you in implementing the whole process without violating any law or regulation.

Documents required to Close a company

Board Resolution

Copy of resolution mentioning the appointment of a liquidator.


Having clauses about the winding process of the company.

Final account statement

Duly prepared by the liquidator.

List of creditors

Containing their contact information and payable debt by the company.

Close Company Cost

We at Compregi believe in complete transparency in the complete registration process of your company. Below mentioned cost structure includes all the necessary government fees required at multiple stages of registration.


  • Free Consultancy
  • Free Search Check
  • Preview before Filing


  • Free Consultancy
  • Free Search Check
  • Preview before Filing
  • 100% Peace of Mind


  • Free Consultancy
  • Free Search Check
  • Preview before Filing

Why is the Closure of the Company required, and for Whom?

Often, it is crucial to close a company for various reasons, and it influences people who are involved in the enterprise. It is now time to discuss the reasons for shut down and the people normally involved in the process.

Reasons for Company Closure
  1. Financial Difficulties: Sometimes, when a business is always in deficit and cannot meet its obligations, the only solution is to shut it down.
  2. Achievement of Purpose: There are companies that are incorporated for a given project or for a given task. After that is done, they might decide to shut down.
  3. Legal Issues: If a firm is involved in some legal complications, it may be viable to shut it down.
  4. Change in Market Conditions: Often, market conditions make it unprofitable and pointless to continue the activity of a particular business.
  5. Personal Reasons: Small business owners might want to sell their businesses to retire or pursue other interests.
Who is Affected by Company Closure?
  1. Owners/Shareholders: They are usually the ones who decide to shut down the company and will be the ones financially worst off.
  2. Employees: They will be out of work once the firm shuts down.
  3. Creditors: These are people or businesses which the company has borrowed money from and has not yet repaid. They have to be paid first before the company can close.
  4. Customers: They may be denied the products or services they have been used to consuming in the market.
  5. Suppliers: They will be without a customer and could be entitle to some cash.
  6. Government: They need to be certain that all taxes and laws are paid and adhered to respectively.

It is possible to prepare for this event better if you know why you are closing your company and who will be impacted. If you are at Compregi, we can assist you to think about all those issues and develop the closure plan that will satisfy all the parties involved.

What are the required documents for Closure of the Company

The following documents are required to be prepared and submitted to close a company: 

Affidavit of undertaking to pay all penalties and fines (Form STK-4)

Affidavit of all directors to be filed to the Securities and Exchange Commission (STK-4)

Special Resolution or consent from 75% of the shareholders

Board Resolution to allow a director to sign the closure application

The Form STK-8 which is the Statement of Accounts showing nil assets and liabilities.

Statement and letter for closure of the bank account

Photocopy of the public notice (if any)

Regulatory authorities’ No Objection Certificates (if any)

Final financial statements

Income Tax clearance certificate

Photocopies of all the canceled registrations ( GST, PF, ESI, etc.)

What is the procedure of the Closure of the Company

Board Meeting

The first activity that needs to be done is scheduling of a board meeting. Here, the directors have to agree to a resolution for the companies closure. This resolution should specify why the business is closing and who is authorized (often a director in the case of a company) to close the business. Remember to take this decision in the meeting minutes.

Shareholder Approval

Subsequent to the board’s decision, you require shareholder sanction. This can be done in two ways:

  1. a) Three-fourths of the shareholders must sign a written consent.
  2. b) Call a general meeting and pass a special resolution for the winding up of the company.

Regardless of the method you select, make sure that you record it as you will be required to provide proof of this at a later date.

Settle Debts and Close Accounts

This is a very important phase. Settle all liabilities that a company may have such as loans, unpaid bills or any unpaid taxes. Subsequently, freeze all the bank accounts that are linked to the company. Get letters that show that the account has been closed from the respective banks. These are required for your application.

Prepare Financial Statements

Prepare the final balance sheet of the company. These should reveal that the business has no other resources or outstanding obligations. These statements need to be certified by a practicing Chartered Accountant. They should be recent and should not be more than 30 days old when you are filing your closure application.

File STK-2 Form

This is a formal application to strike the company off the register. Make sure to complete all the fields of the STK-2 form and enclose all necessary documents, such as:

  • Indemnity bond (STK-3)
  • Affidavit (STK-4)
  • Special resolution or shareholder consent
  • Board resolution
  • Statement of accounts (STK-8)
  • Bank account closure statements Submit this form to the Registrar of Companies (ROC) along with the prescribed fee.

Public Notice

The ROC will then publish a notice of your application in the Official Gazette after they have received it. This notice gives the public a heads up on the companies’ planned closure and also gives the public a chance to object. The legal notice period is normally 30 days.

ROC Review

The ROC will carefully study the application with all the documents enclosed to it. They can ask for further details or for the clarification of some data if necessary. It would be helpful to expect questions that may be asked and be ready to answer them immediately in a bid to continue with the exercise.

Striking Off

If no objection to the action has been filed within the notice period, and the ROC is content with your application, they will remove the company’s name from the register. As to this, you will be informed officially of this matter.

Post-Closure Steps

Even after the company is struck off, there are a few more things to do: 

  • File final tax returns
  • Terminate all remaining registrations ( GST, PF, ESI, and so on.)
  • Make sure all the concerned parties are aware of the closure.


How long does it take to close a company?

On average, it lasts from 3 to 6 months; however, it is not a rigid timeline, and the time may vary depending on the company’s specifications and the time needed to collect all the documents.

Can I reopen a closed company?

Yes, the process of restoring a company is possible if you apply it within 20 years of the company's closing. But it’s fairly complicated, and it should not be done without the help of professionals.

Do I need to pay taxes when closing a company?

Indeed, there are tax responsibilities that have to be met before a company can be closed, all of them must be paid. You must also submit terminal tax returns and obtain a clearance certificate.

What happens to employees when a company closes?

Employees must be dismissed in accordance with the provisions of the employment laws, and if there are any outstanding wages, they must be paid. This involves the wages, incentives, and any other end-of-service benefits that may be due to the employee.

Can creditors stop a company from closing?

If a company has outstanding debts, creditors can oppose the business's closure. Any amount owed to other people must be paid or an agreement to pay must be reached before the closing can take place.


Related services

Auditor Appointment

Appoint an auditor for seamless financial wok.

MOA Amendment

Amend MOA with our legal experts.

Share Transfer

Transfer your shares to your loved ones.