How can a company be struck off the register or declared dormant?

Question

My company has stopped operations and I want to know whether to apply for strike off or dormant status to avoid ongoing compliance. I would like to understand which provision governs this, what it entitles me to, and how long I have before the remedy lapses. I also want to know whether I need a lawyer for this or can do it myself.

MyVakeel Legal Desk · Accepted Answer

In India, the answer to "How can a company be struck off the register or declared dormant?" turns on Companies Act 2013, Section 248, Companies Act 2013, Section 455 and Companies Act 2013, Section 250. The points below set out the position and then what to do about it, in the order it should be done.

Section 248 allows the Registrar to strike off a company that has failed to commence business within one year of incorporation or has not carried on business for two immediately preceding financial years and has not applied for dormant status.

A company can voluntarily apply for strike off using Form STK-2 after extinguishing all liabilities and obtaining a special resolution or consent of 75 percent of members in terms of paid-up capital.

Section 455 permits a company formed for a future project or holding assets without significant accounting transactions to apply for dormant company status through Form MSC-1, reducing certain compliance obligations.

Once struck off, a company under Section 250 ceases to operate except for the purpose of realising amounts due and discharging liabilities, and its name is removed from the register.

Directors of a struck-off company can still be held liable for outstanding dues, and the Registrar or Tribunal can restore a struck-off company on application within the prescribed time if strike off was improper.

In practice, in this order: 1) Clear all liabilities and close bank accounts before applying for strike off; 2) File Form STK-2 with the required affidavits and indemnity bonds; 3) Consider dormant status through Form MSC-1 if the company may resume activity later; 4) Retain records to respond to any restoration or liability claims after strike off.

Timing matters here: Companies Act 2013, Section 248 works on limitation periods, so a strike off company section 248 claim that is right on the merits can still fail if it is brought late. You can post the details on the MyVakeel forum for a practising advocate to review, or book a paid consultation with a Bar Council verified lawyer in corporate law.