Close an Inactive Company at Just 25% Government Fee Under CCFS‑2026
The Ministry of Corporate Affairs (MCA) has significantly reduced the cost and compliance burden for closing dormant or non‑operational companies by introducing the Companies Compliance Facilitation Scheme, 2026 (CCFS‑2026).
Under this one‑time window, eligible companies opting for strike‑off under Section 248 of the Companies Act 2013 can file Form STK‑2 at only 25% of the usual government fee, making it an attractive exit route for entities that are no longer carrying on business.
This article explains:
- What strike‑off of a company means
- Legal framework governing removal of name from the register
- Eligibility conditions to apply for strike‑off
- Step‑by‑step procedure for strike‑off
- Key benefits and scope of CCFS‑2026
- Continuing liabilities of directors and members even after dissolution
1. Understanding Strike-Off of a Company
1.1 What is Strike-Off?
Strike‑off is a legal mechanism through which a company voluntarily requests the Registrar of Companies (ROC) to remove its name from the register of companies. Once the ROC completes the prescribed process and issues the final order, the company is treated as dissolved and ceases to operate as a legal entity, subject to certain residual liabilities.
This process is commonly used where:
- Business activities have never started, or
- Operations have stopped and there is no intention to revive the company, and
- The company prefers an economical and relatively faster exit route instead of going through formal winding‑up.
2. Statutory Provisions for Strike-Off
2.1 Relevant Sections and Rules
Strike‑off of companies is primarily governed by the following:
Section 248of Chapter XVIII – Removal of the name of the company from the register of companies of theCompanies Act 2013- Relevant Rules under the Companies (Removal of Name of Companies from the Register of Companies) Rules
Rule 24of The Companies (Management and Administration) Rules, 2014, to the extent applicable
These provisions collectively outline:
- Circumstances in which a company’s name can be removed
- Voluntary application by the company through Form STK‑2
- Documentation, publication and objection process
- Effect of dissolution and continuing responsibilities
3. When Can a Company Apply for Strike-Off?
3.1 Eligibility Conditions
A company that is not carrying on business or has remained inactive can seek removal of its name from the ROC records under Section 248. Generally, a company may apply for strike‑off if any of the following conditions are satisfied:
- The company has not commenced its business within 1 year from the date of incorporation; or
- The company has not carried on any business or operations during the immediately preceding 2 financial years and has not applied for the status of a dormant company; or
- Subscription money for shares has not been received from subscribers and Form INC‑20A (declaration for commencement of business) has not been filed; or
- Physical verification carried out by the ROC indicates that the company is not functioning from its registered office or is not actually carrying on business.
Note: Companies having outstanding liabilities, regulatory restrictions, or ongoing investigations must exercise extra caution and may need to resolve such issues before applying for strike‑off.
4. Detailed Procedure for Strike-Off Under Section 248
Below is a structured step‑by‑step process typically followed by a private company for voluntary strike‑off. The same broad framework applies to many other classes of companies unless specifically barred.
4.1 Step 1 – Convene Board Meeting
The first formal step is to hold a Board Meeting in accordance with the Companies Act 2013 and applicable Secretarial Standards. At this meeting, the Board should:
- Consider and approve the proposal to remove the name of the company from the ROC register by opting for strike‑off.
- Authorize one of the Directors to sign and submit Form STK‑2 and related documents with the ROC.
- Decide whether to:
- Seek consent of members holding at least 75% of the paid‑up share capital, or
- Call a General Meeting to pass a Special Resolution approving strike‑off.
- Approve the draft notice of General Meeting along with an explanatory statement under the
Companies Act 2013, where a meeting is proposed. - Authorize a Director or other officer of the company to issue the notice of General Meeting to members.