How can I close a private limited company that is no longer operational in Bengaluru?

"Scaling down is as much a part of the startup journey as scaling up. If your Bengaluru-based company is inactive, you must close it formally to avoid mounting penalties and director disqualification."

💡Easy Answer

The most common way to close an inactive company is the 'Strike Off' process via the Fast Track Exit (FTE) scheme using Form STK-2. To qualify in Bengaluru, your company must have nil liabilities and have not carried out any business activity for the last two years. Before filing, you must ensure all prior annual filings (AOC-4 and MGT-7) are up to date until the date the company stopped operating. Alternatively, if the company has assets and liabilities, you may have to undergo 'Voluntary Liquidation' under the Insolvency and Bankruptcy Code (IBC), which is a more complex and time-consuming process.

🚀 What you should do

1. 1Conduct a Board Meeting to pass a resolution for striking off the company name and authorize a director to file the application.
2. 2Ensure all pending statutory dues (Income Tax, GST, Professional Tax) are cleared and obtain a 'No Objection Certificate' if necessary.
3. 3Prepare a 'Statement of Accounts' certified by a Chartered Accountant, showing nil assets and nil liabilities, dated not more than 30 days before the application.
4. 4Obtain an 'Indemnity Bond' and 'Affidavits' from all current directors, stating that the company has no pending litigations or dues.
5. 5File Form STK-2 with the Registrar of Companies (ROC) Karnataka, along with the prescribed fee (currently ₹10,000).
6. 6Once filed, the ROC will publish a public notice; if no objections are received within the cooling-off period, the company name is struck off the register.