Strike Off vs Dormant explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
A company that has stopped trading has two options: close it permanently by getting the name struck off under Section 248, or park it in dormant status under Section 455 while keeping the entity alive.
The choice turns on one question: do you expect to use the company again?
There's a third thing people do — nothing — and it's covered at the end, because it's by far the most expensive.
STK-2 dissolves the company (₹10,000, three to six months, reversible only by the NCLT). MSC-1 keeps it alive as dormant, with MSC-3 annually and two board meetings a year. Dormant status can't run beyond five consecutive years. And dissolution does not end directors' liability.
Side by side
| Strike off (Sec 248) | Dormant (Sec 455) | |
|---|---|---|
| Effect | The company is dissolved; the CIN ceases | The company survives, marked "Dormant" |
| Forms | STK-2 | MSC-1, then MSC-3 annually, MSC-4 to revive |
| Reversible | Only by NCLT order under Sec 252 | Yes, via MSC-4 |
| Annual filings | None after dissolution | MSC-3 every year |
| Board meetings | None | Two a year, ≥90 days apart |
| Audit | N/A | Not required while dormant; MSC-3 is audited |
| Directors | Cease | Minimum retained — 1 (OPC), 2 (private), 3 (public) |
| Cost | One-time | Low recurring |
| Best for | Never using it again | A name-holder, IP-holder, or a pause between projects |
Route 1 — Strike off under Section 248(2)
A company may, after extinguishing all its liabilities, by special resolution or the consent of 75% of members in terms of paid-up capital, apply to have its name removed.
The grounds are that the company has failed to commence business within a year of incorporation; has not carried on business for two immediately preceding financial years without applying for dormant status; the subscribers never paid their subscription and no INC-20A was filed within 180 days; or the company is not carrying on business as revealed by physical verification of the registered office.
The procedure
- Extinguish all liabilities — repay creditors, close bank accounts, settle GST, TDS, PF and ESI, surrender registrations and licences.
- Board meeting, then a general meeting.
- Special resolution or written consent of 75% of members by paid-up capital; MGT-14 where a special resolution is passed.
- File STK-2 — fee ₹10,000.
- The Registrar issues a public notice in STK-6, inviting objections within thirty days, on the MCA site, in the Gazette and in newspapers.
- Notices to Income Tax, GST and sectoral regulators seeking objections.
- No objection → the name is struck off and dissolution is published in STK-7.
What goes with STK-2
- Indemnity bond in STK-3 from every director;
- Statement of accounts in STK-8, CA-certified, not older than thirty days, showing nil assets and nil liabilities;
- Affidavit in STK-4 from every director;
- certified copy of the special resolution or the 75% consent;
- a statement on pending litigation;
- a regulator's approval where the company is regulated.
When you can't use this route
An application is barred where, in the previous three months, the company has changed its name or shifted its registered office to another State; made a disposal for value of property or rights; engaged in any activity other than what's necessary to make the application or wind up its affairs; applied to the Tribunal for a compromise or arrangement not yet concluded; or is being wound up.
Filing in breach of that is punishable with a fine up to ₹1,00,000.
That three-month window catches people who tidy up by selling the last asset and then file the following week. Sell first, wait three months, then apply.
What survives dissolution
The Certificate of Incorporation is deemed cancelled — except for realising amounts due to the company and discharging its liabilities.
And critically: the liability of every director, manager, officer and member continues and may be enforced as if the company had not been dissolved.
Striking off is not a liability shield. It never was.
Getting it back
An appeal lies to the NCLT within three years for a person aggrieved by the order — and up to twenty years where the company, a member, creditor or workman shows the company was actually carrying on business or otherwise in operation.
Route 2 — Dormant status under Section 455
Available to a company formed for a future project, or to hold an asset or intellectual property, with no significant accounting transaction — or to an inactive company.
"Inactive company" means one that hasn't carried on business or made a significant accounting transaction in the last two financial years, or hasn't filed financial statements and annual returns for two years.
"Significant accounting transaction" excludes ROC fees, payments to comply with any law, allotment of shares to comply with the Act, and payments to maintain the office and records. So a company paying rent on its registered office and nothing else can still be dormant.
Getting there
- Board meeting, then a special resolution or the written consent of three-fourths of shareholders by value.
- File MSC-1 with a statement of affairs certified by a CA or auditor; the latest financials and annual return; certificates that no inspection, inquiry or investigation is pending, that there are no outstanding statutory dues or loans, and that no litigation is pending; plus the lender's consent where any loan is outstanding.
- The Registrar issues MSC-2 and enters the company in the register of dormant companies.
What you still have to do
- File MSC-3 — the dormant company return — within thirty days of each financial year end, audited by a CA in practice.
- Hold two Board meetings a calendar year, ≥90 days apart.
- Retain the minimum directors.
- Keep the statutory registers and books.
And two limits. The Registrar will strike off a dormant company that fails to comply. And a company cannot stay dormant beyond five consecutive financial years — after that, apply for active status in MSC-4 or be struck off.
If the company does anything that affects its dormant status, the directors must file MSC-4 within seven days.
Which one
Strike off if the business has ended with no plan to revive it; all liabilities can genuinely be extinguished; there's no litigation, pending assessment or regulatory proceeding; and you don't need the name or the CIN.
Go dormant if the company holds an asset, brand, trade mark or IP you want to keep; the business is paused between projects; you want to preserve the name and incorporation date; or there's history you'd rather not unwind.
And do neither — just stop filing — if: never.
That route leads to Section 164(2)(a) director disqualification for five years across every company you're on, ₹100-a-day uncapped additional fees on each unfiled annual filing, and eventual strike-off by the Registrar anyway — without any of the protection of a clean, deliberate exit. It is the single most expensive way to close a company. What the fees actually reach →
Key takeaways
- The question is whether you'll use the company again.
- STK-8 must show nil assets and nil liabilities, dated within thirty days.
- The three-month bar catches recent name changes, State shifts and asset disposals.
- Dissolution doesn't end directors' liability.
- Dormant status maxes out at five consecutive years.
- Doing nothing is the worst option, by a wide margin.
Read next
- Private Limited Company in India: The Complete Guide
- Form INC-20A: Declaration of Commencement of Business
- Penalties for Non-Compliance: Section-wise Chart
- Annual Compliance Calendar for Private Companies
Disclaimer: Positions stated as on 4 September 2026. Strike off and dormancy have tax and contractual consequences not covered here. Take professional advice before either route.