In India, Closure of LLP—is a legal process that requires careful compliance with the regulations set by the Ministry of Corporate Affairs (MCA). When a business has no further operational purpose or the promoters decide to discontinue it, it becomes necessary to formally apply for its closure. Two primary forms used for this purpose are Form STK-2 for companies and Form 24 for LLPs. This complete guide outlines the step-by-step procedure, eligibility, required documents, and key differences between the two forms for a smooth and legally compliant closure process.

Understanding the Purpose

• Form STK-2: Used to strike off a company name from the Register of Companies under Section 248(2) of the Companies Act, 2013.

• Form 24: Used to file an application for striking off the name of an LLP under Rule 37(1)(b) of the LLP Rules, 2009.

Both forms enable the business to be legally dissolved, freeing its promoters from statutory compliances and filings.

Filing Form STK-2 for Company Closure

- Eligibility for Filing STK-2

A company can apply for strike-off through STK-2 if:

• It has not commenced any business activity after incorporation, or

• It has ceased all operations for at least two years.

• The company does not have any outstanding liabilities.

• The company is not listed, delisted due to regulatory action, under inspection, or involved in legal proceedings.

Companies involved in Section 8 (non-profit), listed companies, or those regulated by special acts (e.g., banking, insurance) must follow a separate route for closure.

- Pre-conditions for Filing STK-2

• The company must extinguish all liabilities.

• Obtain consent of 75% shareholders (by paid-up share capital).

• File all pending ROC returns and annual compliances (AOC-4, MGT-7).

• Close the company’s bank account.

• Prepare the latest statement of accounts certified by a Chartered Accountant (not older than 30 days from the date of filing).

- Documents Required

• Certified true copy of Board resolution for strike off.

• Special resolution or consent of 75% members.

• Indemnity Bond (Form STK-3) signed by all directors.

• Affidavit (Form STK-4) signed by all directors.

• Statement of Accounts.

• Copy of PAN card of the company.

• Copy of latest Income Tax Return.

• Identity and address proof of directors.

- Government Fees

• Filing fee for STK-2 is ₹10,000 (as per Companies (Removal of Names of Companies) Rules, 2016).

- Process of Filing

• Hold a Board meeting and pass a resolution.

• Call for a general meeting and pass a special resolution (or obtain shareholder consent).

• File pending compliance forms (if any).

• File Form STK-2 with the Registrar of Companies (ROC) through the MCA portal along with the required attachments and fees.

Filing Form 24 for LLP Closure

- Eligibility for Filing Form 24

An LLP can apply for strike-off through Form 24 if:

• It has not commenced business or ceased operations for more than one year.

• There are no liabilities or creditors.

• All designated partners have given their consent.

• It has filed at least one annual return, if operational in any year.

- Pre-conditions for Filing Form 24

• Closure of bank account and surrender of PAN/TAN.

• No pending dues with tax authorities, creditors, or ROC.

• All partners must agree to the closure.

- Documents Required

• Copy of Board Resolution/consent of partners.

• Affidavit by all designated partners stating the LLP has no liabilities.

• Indemnity Bond by all designated partners.

• Statement of accounts certified by a Chartered Accountant (not older than 30 days).

• Acknowledgement of Income Tax Return (if filed).

• Copy of initial LLP Agreement and amendments (if any).

• Copy of PAN card of LLP.

- Government Fees

• Filing fee for Form 24 is nominal and varies based on the capital contribution of the LLP, generally around ₹500.

- Process of Filing

• Convene a meeting of designated partners.

• Pass a resolution for strike off.

• Close the LLP’s bank account and obtain a CA-certified statement of accounts.

• Surrender the PAN/TAN.

• File Form 24 on the MCA portal with the required documents.

Key Differences Between STK-2 and Form 24

Points to Remember

• Filing these forms does not automatically strike off the company or LLP. ROC will examine the application, publish a public notice, and then issue a final order.

• In case any stakeholder (creditors, government, or employee) objects during the public notice period, the ROC may reject the application.

• Once struck off, the entity ceases to exist legally and cannot conduct any business.

• Post-strike off, if any liabilities emerge, directors or partners are still liable.

Conclusion

The closure of Private limited company or LLP through Form STK-2 and Form 24 respectively provides a legal, efficient exit route for businesses no longer in operation. While the process is straightforward, it requires strict compliance with documentation and regulatory guidelines. Business owners should ensure all financial liabilities are settled and proper documentation is in place. Consulting a professional such as a Company Secretary or Chartered Accountant can simplify the process and prevent any future legal complications. Proper closure reflects business responsibility and protects promoters from ongoing regulatory obligations.