A company that has ceased to operate, or that wishes to exit, has two principal routes: a strike-off under Section 248 and a winding up under Section 271. The choice depends on the company's solvency, its assets and liabilities, and whether there are disputes.
The Strike-Off
A strike-off is available where the company has been inactive for at least two years, has no outstanding liabilities, and has no ongoing legal proceedings. The application is made in Form STK-2, with the board resolution, the indemnity bond, the statement of accounts, and the affidavit. The ROC publishes the application in the Official Gazette, and if no objections are raised, the company's name is struck off. The strike-off is the fastest and cheapest route, but it is available only for defunct companies with no liabilities.
The Winding Up
A winding up under Section 271 is available where the company has passed a special resolution, has acted against the sovereignty and integrity of India, has defaulted in filing financial statements for five consecutive years, is unable to pay its debts, or where the Tribunal is of the opinion that it is just and equitable to wind up the company. The winding up is slower and more expensive, but it is available where the company has assets or liabilities, or where there are disputes.
The IBC
The IBC has displaced the winding-up route for most insolvency cases. A company that is insolvent and has a debt of at least one crore rupees is within the IBC's jurisdiction, and the winding-up route is not available. The voluntary liquidation route under Section 59 of the IBC is available for a solvent company that wishes to exit.
The Advisory
A business exit advisor assesses the company's solvency, its asset and liability position, and the presence of disputes, and recommends the appropriate route. The advisor also coordinates the filings, the NCLT process, the liquidator's appointment, and the post-exit compliance.
Call to Action
Anuj Desai & Associates advises companies on the choice between winding up and strike-off—from the eligibility analysis and the STK-2 application to the NCLT winding-up petition and the voluntary liquidation. If your company is considering an exit, we can help you choose the right route.
📧 office@anujdesaiassociates.com
📞 9619456656
🌐 https://anujdesaiassociates.com
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