Corporate Restructuring, Valuation and Insolvency · Strike Off and Restoration of Name of the Company and LLP

Procedure and Conditions for Voluntary Strike Off of a Company

Updated 11 October 2026 · Fact-checked

Voluntary strike off lets a company that has extinguished all its liabilities ask the Registrar to remove its name from the register under section 248(2). You need a special resolution or consent of 75% of members by paid-up capital, then file Form STK-2. Section 249 bars certain companies, and section 8 companies cannot use this route.

Understand Procedure and Conditions for Voluntary Strike Off

A company can end its life in three ways: winding up, insolvency process, or removal of its name from the register. Strike off is the cheapest route. It suits a company that is dead in practice: no business, no assets worth chasing and no debts.

There are two kinds. In the first, the Registrar acts on his own under section 248(1) when he has reasonable cause to believe the company is defunct. In the second, the company itself applies under section 248(2). This is voluntary strike off, and it is the subject of this topic.

Section 248(2) sets the core conditions. The company must first extinguish all its liabilities. It must then pass a special resolution or obtain consent of seventy-five per cent of members in terms of paid-up share capital. It files an application in the prescribed manner (Form STK-2) and the Registrar issues a public notice. If the company is regulated under a special Act, approval of that regulator must be enclosed.

The law also shuts the door on some companies. Under section 248(3), a section 8 company cannot use sub-section (2). Under section 249(1), no application can be made if, at any time in the previous three months, the company has changed its name, shifted its registered office from one State to another, disposed of property for value in the way described there, engaged in activity other than winding-up related activity, applied to the Tribunal for a compromise or arrangement not finally concluded, or is being wound up under Chapter XX or the IBC.

For documents, the rules prescribe items such as an indemnity bond by directors, statement of accounts, affidavits and a statement of pending litigation. Recall these from the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016. Check the exact list against your study material before the exam.

Key rules to remember

Who may apply: Company + all liabilities extinguished + special resolution OR consent of 75% members by paid-up capital; Section 248(2). The application goes to the Registrar in the prescribed manner (Form STK-2).
Excluded company: Section 8 company cannot apply under section 248(2); Section 248(3). The bar covers the voluntary route only.
Regulated company: Special Act company needs regulator approval enclosed with the application; Proviso to section 248(2).
Three-month look-back bars: No application if in previous 3 months: name change; State-to-State shift; disposal for value; other activity; pending compromise or arrangement; winding up; Section 249(1)(a) to (e). Winding up covers Chapter XX and the IBC.
Penalty for wrongful application: Fine up to ₹1,00,000; Section 249(2). Under 249(3) the application is withdrawn or rejected once the bar is noticed.
Notice and dissolution: Public notice, then Gazette notice of strike off; company stands dissolved on publication; Section 248(4) and (5). Registrar must first be satisfied about liabilities (248(6)).

How to solve Procedure and Conditions for Voluntary Strike Off questions

Use this order for any case question on voluntary strike off. Facts first, then the law, then the conclusion.

1Identify the company type. If it is a section 8 company, stop: section 248(3) bars it. Check whether a special Act regulator is involved.
2Check section 249(1) against the facts of the last three months: name change, State shift, disposal of property, other activity, pending scheme, winding up.
3Check liabilities. The company must have extinguished all of them before applying under section 248(2).
4State the approval: special resolution or consent of 75% of members by paid-up capital. Mention board approval and the meeting or consent process as practical steps.
5List the filing: Form STK-2 with the prescribed documents, including the indemnity bond, statements and affidavits, plus regulator approval if applicable.
6Describe what follows: public notice, Gazette publication, Registrar's satisfaction on liabilities, strike off and dissolution.
7Conclude clearly: eligible or not eligible, with reasons, and the consequence of a wrong filing (fine up to ₹1,00,000 and withdrawal or rejection).
8Add the continuing liability point: directors and members remain liable as if the company had not been dissolved (section 248(7)).

Quickest way: Four-gate eligibility check

When to use it: Use when a short case asks whether a company can apply for voluntary strike off.

Gate 1: Is it a section 8 company? If yes, not eligible.
Gate 2: Any section 249(1) event in the last three months? If yes, not eligible.
Gate 3: Are all liabilities extinguished? If no, not ready.
Gate 4: Special resolution or 75% paid-up capital consent, plus regulator approval if needed? If yes, file STK-2 with documents.

Common mistakes in Procedure and Conditions for Voluntary Strike Off

Saying a section 8 company can apply voluntarily under section 248(2).
Students remember the bar only as a general rule for non-profit entities.
Fix: Quote section 248(3): nothing in sub-section (2) applies to a section 8 company.
Counting 75% of members by number instead of paid-up capital.
Special resolution uses votes cast, so the two are blended.
Fix: The consent route is 75% in terms of paid-up share capital. Say so exactly.
Applying with liabilities still pending.
Students assume the indemnity bond covers unpaid debts.
Fix: Liabilities must be extinguished first. The indemnity bond is only a safeguard, not a substitute.
Treating the three-month bars as a one-year period.
Confusion with the two-year inactivity test in the Registrar-initiated route.
Fix: Section 249(1) says previous three months. Keep the two periods separate.
Believing dissolution ends all liability of directors and members.
Dissolution sounds final.
Fix: Section 248(7): their liability continues and can be enforced as if the company had not been dissolved. Section 248(8) also preserves the Tribunal's power to wind up.
Forgetting regulator approval for companies under a special Act.
The proviso is short and easy to skip.
Fix: Mention it whenever the facts show a regulated company, and enclose it with the application.

Worked examples

Example 1

Sundaram Traders Private Limited has no business and no liabilities. Its members holding 80% of paid-up capital consent to strike off. Two months ago, it shifted its registered office from Tamil Nadu to Karnataka. Can it file STK-2 now?

Show the solution

The company is not a section 8 company, so section 248(3) does not bar it.
Consent of 80% by paid-up capital meets the 75% requirement of section 248(2).
Section 249(1)(a) bars an application if in the previous three months the company shifted its registered office from one State to another.
Two months is within three months, so the bar applies.
If it files anyway, it is punishable with fine up to ₹1,00,000 and the application is withdrawn or rejected (section 249(2) and (3)).

Answer: No. Despite meeting the 75% consent and having no liabilities, it cannot apply now because of the State shift within three months. It should wait until the three-month period has passed.

Example 2

Kaveri Foundation, a section 8 company, has completed its objects and settled all dues. Its members unanimously pass a special resolution for strike off under section 248(2). Advise.

Show the solution

Identify the company type: section 8 company.
Section 248(3) says nothing in section 248(2) applies to a section 8 company.
The special resolution and the absence of liabilities do not cure this bar.
Section 248(2) is the voluntary route, so the company cannot use it.
Advise another lawful exit route, such as winding up or the process applicable to such companies.

Answer: Kaveri Foundation cannot be struck off through a voluntary application under section 248(2) because section 248(3) excludes section 8 companies. It must choose another route to close.

Exam tips

Write the section numbers 248(2), 248(3) and 249(1) in your answer. Examiners look for them in case-based questions.
Always apply the facts to each bar in section 249(1). Do not just list them.
Close with a one-line conclusion: eligible or not, and why.
List documents briefly and mention the indemnity bond, but only state items you are sure of from your study material.
Mention the regulator approval and the continuing liability under section 248(7) for extra marks.

Practice questions from Strike Off and Restoration of Name of the Company and LLP

Procedure and Conditions for Voluntary Strike Off: frequently asked questions

What is Form STK-2?

It is the application a company files with the Registrar to have its name removed from the register under section 248(2). It is filed with the prescribed documents after the company has extinguished its liabilities and obtained member approval.

What approval do members need for voluntary strike off?

The company needs a special resolution or consent of seventy-five per cent of members in terms of paid-up share capital. Board approval is also a practical step before calling the meeting or seeking consent.

Which companies cannot apply for voluntary strike off?

A section 8 company cannot apply under section 248(2). Also, any company that did one of the acts listed in section 249(1) in the previous three months, such as changing its name or being wound up, cannot apply.

Does strike off end the liability of directors?

No. Under section 248(7), the liability of every director, manager or officer exercising management powers, and of every member, continues and can be enforced as if the company had not been dissolved.