Which Company is Eligible to Apply for Closure of Company. When a company decides to stop operations, it cannot simply walk away. To legally close the business, it must follow the strike-off process as per the Companies Act, 2013. However, not every business qualifies for this process.
To make things easier, let’s understand which companies are eligible to apply for closure and under what specific conditions.
🧾 The Company Must Not Be in Operation
A company can only apply for closure when it has stopped all business activities.
It should not be trading, manufacturing, or offering services during the last financial year.
For example, if your business hasn’t operated since 2023–24, you can apply for closure in 2025.
This ensures that only inactive companies are allowed to strike off their names.
💰 All Liabilities Must Be Cleared
Before filing for closure, a company must clear all dues and debts.
That includes:
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Salaries and vendor payments
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Government dues such as GST, PF, or TDS
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Loans and outstanding interest
If the company still owes money, the Registrar of Companies (ROC) will not accept the closure application.
Therefore, it’s essential to settle all obligations before applying.
👥 Consent from All Directors and Shareholders
Every director and shareholder must agree to close the company.
To prove this, two resolutions are required:
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A Board Resolution from the directors
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A Special Resolution from the shareholders
Once these are passed, it becomes clear that the closure is a joint decision and not a forced one.
📊 Up-to-Date Financial Statements
The company must prepare a Statement of Accounts certified by a Chartered Accountant (CA).
It should not be older than 30 days from the date of filing Form STK-2.
This statement shows that the company has no assets, liabilities, or operations.
Hence, accurate accounts are vital for smooth approval.
⚖️ No Pending Legal Cases
If a company is involved in court proceedings or government investigations, it cannot apply for closure.
The ROC demands a declaration stating that there are no ongoing cases.
By confirming this, the company assures that there will be no future legal complications.
📁 All Filings Must Be Completed
Before closing, the company must have filed all its annual returns and financial statements up to the latest financial year.
This includes:
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AOC-4 for financial statements
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MGT-7 or MGT-7A for annual return
Filing these documents ensures transparency and keeps the company compliant till its last active year.
🚫 Certain Companies Cannot Apply
Not every company can go through the strike-off route.
The following companies are not eligible:
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Listed companies
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Section 8 (non-profit) companies
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Companies under inspection or legal action
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Vanishing companies
Such entities must go through a formal winding-up process under the NCLT.
🧾 The Closure Must Be Voluntary
The decision to close must be voluntary and made by the directors.
Each director should sign an affidavit and indemnity bond confirming that the closure is free from compulsion and that there are no outstanding dues.
This step proves the intent of genuine closure.
📘 Conclusion
To sum up, a company can apply for closure if it:
✅ Has stopped business activities
✅ Cleared all financial dues
✅ Obtained director and shareholder consent
✅ Filed all annual returns
✅ Has no pending court cases
When all these conditions are satisfied, the company becomes eligible to file Form STK-2 under the ROC’s strike-off process.
Following these steps ensures a smooth, legal, and hassle-free closure of your business.
Hope you get the clarity about Which Company is Eligible to Apply for Closure of Company.