What happens to assets of a wound-up company?

A liquidator distributes assets after paying creditors in priority order. In a strike-off, unclaimed assets vest in the Government of India.

Do directors face liability after winding up?

Generally not, but personal guarantees, fraudulent trading, wrongful trading, or tax arrears can expose directors to personal liability.

Winding Up of a Company

Q: What is the difference between strike off and winding up?

Strike off is an administrative removal suitable for solvent inactive companies. Winding up involves a liquidator settling all debts and distributing assets before formal dissolution.

Q: How long does strike off of a company take?

After meeting all pre-conditions, typically 3 to 6 months including the 30-day Official Gazette objection period and MCA processing.

Q: Can a struck-off company be restored?

Yes, within 20 years for Registrar-initiated strike-offs or 3 years for voluntary strike-offs, by NCLT application if just and equitable.

Close Your Company Legally and Cleanly Under the Companies Act, 2013

Winding up is the formal process of closing down a company — settling its debts, distributing remaining assets to shareholders, and ultimately dissolving the company. Under the Companies Act, 2013, a company can be wound up voluntarily by its members (voluntary winding up), struck off by the Registrar (for defunct companies), or wound up compulsorily by the National Company Law Tribunal (NCLT) on insolvency or other grounds.

For companies that are inactive or no longer required, the fastest and least expensive route is the Strike Off method under Section 248 (filing STK-2), which allows solvent companies to be removed from the MCA register without a formal winding-up order. This is complementary to ensuring all pending MGT-7 and AOC-4 filings are cleared before application. We assist with all routes to closure including voluntary winding up, strike-off application, and NCLT-based proceedings where applicable.

Our Winding Up Services

Strike Off (STK-2)

Filing the STK-2 application for voluntary strike-off of defunct or inactive companies under Section 248 of the Companies Act — the fastest closure route for solvent companies.

Members' Voluntary Winding Up

Formal voluntary winding up by solvent companies where a Declaration of Solvency is filed and a liquidator is appointed to settle affairs and distribute assets.

Creditors' Voluntary Winding Up

Winding up initiated by directors and creditors where the company is insolvent, involving creditor meetings and appointment of a liquidator.

NCLT Winding Up

Assistance with compulsory winding up proceedings before the National Company Law Tribunal on grounds of insolvency or just and equitable reasons.

Pre-Closure Compliance Clearance

Clearing all pending MCA filings, cancelling GST registration, closing bank accounts, and settling tax obligations before filing for closure.

Post-Dissolution Support

Guidance on handling records, assets, liabilities, and obligations of directors and shareholders after the company is formally dissolved.

Eligibility for Strike Off Under Section 248

Company has not commenced business within one year of incorporation, or
Company has not carried on any business for two immediately preceding financial years
All pending annual returns (MGT-7) and financial statements (AOC-4) must be filed up to date
No pending litigation, outstanding tax demands, or government proceedings
GST registration must be cancelled and all returns filed before STK-2 application
Bank accounts must be closed and a nil balance certificate obtained
Directors must not be disqualified at the time of application

Frequently Asked Questions

What is the difference between strike off and winding up?

Strike off under Section 248 is an administrative removal of the company from the MCA register — it is faster, cheaper, and suitable for solvent companies with no liabilities. Winding up under the Companies Act or IBC involves appointing a liquidator to formally settle all debts and distribute assets before dissolution. For inactive solvent companies, strike off is almost always the preferred route.

How long does strike off of a company take?

The STK-2 application process, after all pre-conditions are met, typically takes 3 to 6 months. The MCA publishes a notice in the Official Gazette allowing 30 days for objections before the strike-off order is passed. The actual timeline depends on the completeness of pending filings and the speed of MCA processing.

Can a struck-off company be restored?

Yes. A company that has been struck off can be restored to the register within 20 years (for companies struck off on Registrar's initiative) or 3 years (for voluntary strike-off) by filing an application before the NCLT. The NCLT may order restoration if it is just and equitable to do so, typically where there are pending liabilities or assets belonging to the company.

What happens to the assets of a wound-up company?

In a winding up, the liquidator collects all assets, pays off creditors in the prescribed order of priority (secured creditors first, then unsecured creditors, then shareholders), and distributes any remaining surplus to shareholders in proportion to their shareholding. In a strike-off, all assets of the company vest in the government of India until properly claimed.

Do directors face any liability after a company is wound up?

Generally, limited liability protects directors after dissolution. However, directors can be held personally liable if they have provided personal guarantees for company loans, if the winding up reveals fraudulent trading, if there was wrongful trading in anticipation of insolvency, or if there are tax arrears for which the director is jointly and severally liable under the Income Tax Act.