Sell, continue, or strike off?
A company that has run its course has three routes. The right one depends on whether anyone will pay for it as a going concern, whether it carries something a fresh entity would lose, and what it costs to carry. Statutory references are to the text on file; anything not on file is marked.
The three routes
Sell the company
The business is continuing and someone will pay for it as a going concern — customers, staff, contracts, licences in place.
First step: Seller intake and readiness review →
Continue
The company is needed for a contract, a licence, a loan or a tax position that a fresh entity would lose; the compliance cost is bearable.
First step: Compliance calendar and a cost-to-carry view →
Strike off
No business, no assets to speak of, no liabilities — or all liabilities settled — and no pending proceedings.
First step: Special resolution and Form STK-2 →
Strike-off: timeline and cost
Eligibility
A company that has not commenced business within a year of incorporation, or has not carried on business for two immediately preceding financial years, may apply.
Companies Act 2013 s.248(1)–(2) · kb-sources/companies-act-2013/companies-act-2013.pdftotext.370f2dd8c1d3.txt:L9355
Restrictions
No application in the three months after changing name or shifting the registered office between States, disposing of property, or applying to the Tribunal for a compromise.
Companies Act 2013 s.249(1) · …companies-act-2013.pdftotext.370f2dd8c1d3.txt:L9415
Resolution and application
Extinguish all liabilities; special resolution or consent of 75% of members by paid-up capital; application to the Registrar in the prescribed form.
Companies Act 2013 s.248(2) · …companies-act-2013.pdftotext.370f2dd8c1d3.txt:L9386
Notice
The Registrar publishes a notice; thirty days for representations.
Companies Act 2013 s.248(1), (4) · …companies-act-2013.pdftotext.370f2dd8c1d3.txt:L9369
Dissolution
On publication in the Official Gazette the company stands dissolved; directors remain liable for pre-dissolution obligations.
Companies Act 2013 s.248(5), s.250 · …companies-act-2013.pdftotext.370f2dd8c1d3.txt:L9395
Cost and time
Government fee for Form STK-2 and the typical Registrar timeline are in the Removal of Names Rules, 2016.
[VERIFY] Companies (Removal of Names) Rules 2016 — not on disk
Tax on a share sale
Seller: capital gains on unquoted shares
Shares of an unlisted company held for more than 24 months are a long-term capital asset; long-term gains on transfers on or after 23 July 2024 are taxed at 12.5%.
ITA 1961 s.2(42A) third proviso · ita-1961-as-amended-fa-2025-cleartax-copy.txt:L889 · s.112(1)(a)(ii)(B) L22834 · Finance (No. 2) Act 2024 · FA2-2024-gazette.txt:L1368 · ITA 2025 s.197 (section-map.json:L7775)
Seller: consideration below fair market value
Where the consideration for an unquoted share is less than its fair market value determined under the rules, the fair market value is deemed the full value of consideration.
ITA 1961 s.50CA · ita-1961-as-amended-fa-2025-cleartax-copy.txt:L13645 · ITA 2025 s.79 (section-map.json:L5726) · Rule 11UA [VERIFY] Income-tax Rules not on disk
Buyer: shares received below fair market value
A buyer who receives shares for a consideration below the fair market value by more than fifty thousand rupees is taxed on the difference as income from other sources.
ITA 1961 s.56(2)(x)(c) · ita-1961-as-amended-fa-2025-cleartax-copy.txt:L15107 · L15115 · section-map.json:L5974
Both sides
The same fair-market-value test runs on both sides of the transfer; price it once, with the valuation on file, before the share purchase agreement is drafted.
Stage 6 · Stage 7
The Income-tax Act 2025 renumbers these sections from 1 April 2026; the 2025 numbers shown come from the official CBDT concordance and should be read with the enacted text.
If selling is the route
A sale starts with a readiness review, not a listing. What sellers commission checks on, and what buyers see → · What the register means →