Can you close a company that hasn't filed returns for years? STK-2 rules, costs and steps

In short: yes, a company that has stopped filing with the Registrar can still be closed by voluntary strike-off in Form STK-2 under section 248(2) of the Companies Act, 2013. But it cannot skip the returns. It must first file its overdue financial statements (AOC-4) and annual returns (MGT-7 or MGT-7A) up to the end of the financial year in which it stopped business. Since CCFS-2026 closed on 15 September 2026, those filings carry the full additional fee again, and letting the Registrar strike the company off instead usually costs the directors more.

The rule. Since 10 May 2019, the first proviso to rule 4(1)(a) of the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016 (inserted by G.S.R. 350(E)) bars a company from filing STK-2 unless it has filed its overdue AOC-4 and MGT-7 up to the end of the financial year in which it ceased business operations.

What follows from that:

• The year the business stopped decides the work. If operations stopped in FY 2022-23, the returns for FY 2022-23 and every earlier unfiled year go in first. Later years need not be filed before STK-2 if the Registrar has not yet acted against the company.
• Each of those years needs audited accounts. A company's financial statements are audited every year, whatever its size (section 139). In most catch-up closures, finding or appointing an auditor for the old years takes longer than the filings.
• If the Registrar has already acted, the rule is stricter. Once the Registrar has started action under section 248(1), the company must file all pending returns before STK-2 (second proviso). Once the Registrar has issued notice in Form STK-7, STK-2 cannot be filed at all (third proviso).

What catching up costs now:

• Additional fees. Since 1 July 2018, a late AOC-4 or MGT-7 carries an additional fee of ₹100 for each day of delay, with no upper limit, on top of the normal filing fee (General Circular 01/2026, para 1). A form filed a year late carries ₹36,500 in additional fees, and a company four years behind has two forms for each year.
• Penalties. Separately, the Registrar can adjudicate penalties for late annual returns (section 92(5)) and late financial statements (section 137(3)): ₹10,000 plus ₹100 a day, up to ₹2 lakh for the company and ₹50,000 for each officer in default, for each form.
• The discount window has closed. Under the Companies Compliance Facilitation Scheme, 2026, overdue returns could be filed at 10% of the additional fee and STK-2 at 25% of its fee (General Circular 01/2026, paras 4 and 5). The scheme ran from 15 April 2026 and, after extensions by General Circulars 03/2026 and 04/2026, closed on 15 September 2026. STK-2 is back to its full fee of ₹10,000 (rule 4).
• The Registrar was told to follow up. Para 6 of General Circular 01/2026 directs Registrars to take action under the Act, after the scheme, against companies still in default that did not use it.

One timing point: if the business stopped during FY 2025-26, that year's AOC-4 and MGT-7 can still be filed without additional fees up to 31 December 2026 and 31 January 2027 respectively (General Circular 05/2026).

Why not let the ROC strike it off? The Registrar can strike off a company that has not carried on business for two financial years (section 248(1)). Some owners treat this as a free closure. It is not:

• The directors' DINs. A director of a company that has not filed its financial statements or annual returns for any continuous period of three financial years cannot be reappointed to that company, or appointed to any other company, for five years (section 164(2)(a)).
• Liability does not end with the company. After strike-off, the liability of every director, officer and member continues and can be enforced as if the company had not been dissolved (section 248(7)).
• Reversing it is harder than closing it. Restoring a struck-off company is a petition to the NCLT under section 252: within three years for an appeal against the Registrar's order, or twenty years for an application by the company, a member, a creditor or a workman. The Tribunal usually orders the pending returns to be filed as well.

The voluntary route, in order:

• 1. Fix the year the business stopped, from the bank statements and the last invoices. That year sets the filing backlog.
• 2. Estimate the cost of catching up (additional fees, audit and professional fees) and compare it with what the directors stand to lose.
• 3. File the backlog: prepare and audit the accounts, then file AOC-4 and MGT-7 or MGT-7A for each year up to the year business stopped.
• 4. Clear the liabilities. The company must have extinguished all its liabilities before it applies (section 248(2)).
• 5. Approve the closure by special resolution, or with the consent of members holding 75% of the paid-up share capital (section 248(2)).
• 6. File STK-2 with an indemnity bond from every director (STK-3), an affidavit from every director (STK-4), and a statement of assets and liabilities certified by a Chartered Accountant and not more than 30 days old (rule 4).
• 7. Check the three-month bar: no change of name, no shift of registered office to another State, no disposal of property or rights for value and no other activity in the previous three months (section 249(1)).
• 8. The Registrar publishes a notice inviting objections and, once the period has passed, strikes off the name and publishes the dissolution (section 248(4) and (5)).

If the company may be needed again, to hold a property or IP or for a future project, dormant status under section 455 is the alternative to closure.

LLPs follow the same principle. An LLP closes by filing Form 24 under rule 37(1)(b) of the LLP Rules, 2009, with the consent of all partners. Before that, it must file its overdue Form 8 and Form 11 up to the end of the financial year in which it stopped business (rule 37(1A)). Form 24 costs ₹500 for a small LLP and ₹1,000 for any other LLP, and is processed by C-PACE.

Dates and fees in this note are as on 31 October 2026. Check the MCA website for any later circular before filing.