Strike Off a Section 8 Company: How Closure Works
Want to strike off a Section 8 company? The strike-off rules exclude Section 8 companies, so Form STK-2 is not available. A Section 8 company closes through winding up, usually voluntary liquidation under Section 59 of the IBC, and its leftover assets go to another Section 8 company with similar objects or, if sold, to the Insolvency and Bankruptcy Fund. Never to members.
What it is
A Section 8 company is a not-for-profit company licensed under Section 8 of the Companies Act, 2013. It applies its income to its objects and cannot pay a dividend to its members. Closing one works differently, because the law keeps its assets inside the charitable sector.
Here is the catch: the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016 shut the strike-off door. The proviso to Rule 3(1) lists companies that “shall not be removed” from the register under Rule 3 or Rule 4, and companies registered under Section 8 are on that list. So neither the ROC’s own strike-off under Section 248(1) nor a voluntary STK-2 under Section 248(2) is open. The working exit is voluntary liquidation under Section 59 of the Insolvency and Bankruptcy Code, 2016.
Who it applies to
Your work has ended, the company has not
Think of a Faridabad skill-training company whose CSR funding dried up. It still owes its annual filings until dissolved.
You hold 12A and 80G
From 1 April 2026, these are registration under section 332 and approval under section 354 of the Income-tax Act, 2025, and the assets need a plan before you close.
You received foreign contribution
Say a Palwal rural health company once took a grant from abroad. Its FCRA certificate must be surrendered too, with the Central Government’s permission under Section 14A of the FCRA, 2010.
Why it matters
Keep the assets charitable
Section 8(9) sends surplus assets to another Section 8 company with similar objects, or to a sale whose proceeds go to the Insolvency and Bankruptcy Fund. None of the surplus goes to members.
Don’t wait for the ROC to close it
Because the ROC cannot strike off a Section 8 company, an idle one never quietly disappears. Its fees keep running.
Avoid tax on accreted income
A registered non-profit that fails to transfer all its assets to another registered non-profit within 12 months from the end of the month of dissolution pays tax on accreted income at the maximum marginal rate.
Strike-off vs Section 8 closure at a glance
| Ordinary private company | Section 8 company | |
|---|---|---|
| Voluntary strike-off (STK-2) | Available under Section 248(2) | Not available: excluded by the proviso to Rule 3(1) |
| ROC’s own strike-off | Possible under Section 248(1) | Not available: same proviso |
| Usual exit | STK-2, or voluntary liquidation if assets remain | Voluntary liquidation under Section 59, IBC |
| Leftover assets | Distributed to the members | Go to another Section 8 company with similar objects, or are sold with proceeds to the Insolvency and Bankruptcy Fund (Section 8(9)) |
| Income tax | Normal company rules | Assets must reach a registered non-profit within 12 months, or section 352 tax applies |
| How it ends | STK-7 notice in the Official Gazette | NCLT dissolution order under Section 59(8) |
In practice, the safest recipient satisfies both laws: a Section 8 company with similar objects that is also a registered non-profit organisation under the Income-tax Act, 2025. Choose it early: the NCLT’s conditions and the tax deadline both turn on it.
Documents required
For the liquidation
- Declaration of solvency by a majority of directors, verified by affidavit
- Audited financial statements for the previous two years, or since incorporation if later
- Registered valuer’s report on the assets, if any
- Special resolution appointing an insolvency professional as liquidator
- Creditors’ approval, if the company owes any debt
For the asset transfer
- Recipient’s certificate of incorporation and Section 8 licence
- Recipient’s income-tax registration order
- Board and members’ resolutions naming the recipient
Tax and regulatory papers
- Income-tax registration and 80G approval orders
- ITR-7 acknowledgements and audit reports
- FCRA certificate and annual returns in Form FC-4, if registered
- GST cancellation order, if registered
- Directors’ digital signature certificates
How it works
Confirm that liquidation fits
We review the licence, filings, FCRA status, assets and liabilities. If the company owes money it cannot pay in full, voluntary liquidation is not available.
Bring the filings up to date
Section 59 needs audited financial statements for the previous two years. We complete pending audits, AOC-4 and MGT-7 (Section 8 companies cannot use MGT-7A) through our annual compliance filing service, along with ITR-7. For FY 2025-26, ITR-7 in audit cases is due by 21 November 2026.
Choose a recipient that satisfies both laws
The board and members pick a Section 8 company with similar objects that is also a registered non-profit organisation. Say a Ballabgarh education company owns a van and a computer lab. Both go to a Section 8 company running similar classes, not back to the founders.
Surrender the FCRA certificate
If the company holds FCRA registration, we apply to surrender it under Section 14A. That needs an inquiry, and the foreign contribution and assets created from it must vest in the prescribed authority.
Declare solvency and pass the special resolution
A majority of directors swear the declaration of solvency. Within four weeks, members pass a special resolution appointing an insolvency professional as liquidator. If there is any debt, creditors holding two-thirds of it in value must approve within seven days.
Hand over the assets, then apply for dissolution
The liquidator pays the debts, transfers the surplus under Section 8(9) and applies to the NCLT. The NCLT then passes the dissolution order under Section 59(8).
Close the income-tax file within 12 months
We document the transfer to the registered non-profit, so section 352 tax does not arise.
Timelines
Four weeks, then seven days
The special resolution follows the declaration of solvency within four weeks. If there is debt, creditors approve within seven days of the resolution.
Fourteen days after the order
The NCLT’s dissolution order is forwarded to the ROC within 14 days. The company stands dissolved from the date of that order.
Twelve months for the assets
Assets must reach another registered non-profit within 12 months from the end of the month of dissolution. If they do not, section 352 tax is due within 14 days after that period.
What happens if you leave a Section 8 company idle
Pay daily fees, then face disqualification
Each late AOC-4 and MGT-7 attracts ₹100 per day of additional fee, and CCFS-2026 ended on 31 August 2026. After three continuous financial years without filings, directors are disqualified for five years under Section 164(2).
Lose the registration, then pay the tax
A registered non-profit that fails to apply for renewal of its income-tax registration in time falls within section 352. Tax on accreted income at the maximum marginal rate follows, and the principal officer is liable too.
Get wound up on the Tribunal’s terms
Section 271 lets the NCLT wind up a company that has not filed financial statements or annual returns for five consecutive financial years. You lose control of the timing.
Frequently asked questions
Can a Section 8 company apply for strike-off in Form STK-2?
No. The proviso to Rule 3(1) of the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016 says companies registered under Section 8 shall not be removed from the register under Rule 3 or Rule 4. Rule 4 governs STK-2, so the voluntary route is closed, and so is the ROC’s own strike-off. The working exit is voluntary liquidation under Section 59 of the IBC, which we coordinate end to end.
What happens to a Section 8 company’s surplus assets?
They go to another Section 8 company with similar objects, subject to conditions the NCLT may impose, under Section 8(9). The alternative is to sell them and credit the proceeds to the Insolvency and Bankruptcy Fund under Section 224 of the IBC. Members get none of it, in line with the Section 8(1)(c) bar on dividends. Pick a recipient that is also a registered non-profit, and the income-tax side is covered too.
What happens to our 12A and 80G registration?
It ends with the company, but the assets carry a tax condition. From 1 April 2026, 12A and 80G became section 332 registration and section 354 approval under the Income-tax Act, 2025. Under section 352, failing to transfer all assets to another registered non-profit within 12 months from the end of the month of dissolution brings tax on accreted income at the maximum marginal rate. Transfer on time and nothing is due.
How do we close our FCRA registration?
You apply to surrender the certificate under Section 14A of the FCRA, 2010, added in 2020. The Central Government permits surrender after an inquiry, if no provision was contravened and the foreign contribution and assets created from it are vested in the prescribed authority. A 2026 amendment bill on vesting was still pending before a Joint Parliamentary Committee in August 2026. We file any pending FC-4 returns first, so the inquiry finds a clean record.
Do we surrender the Section 8 licence separately?
No, Section 8 has no separate surrender step. The licence ends when the company is dissolved. To carry on as an ordinary company instead, Section 8(4)(ii) allows conversion only after complying with prescribed conditions. For a registered non-profit, converting into a form not eligible for registration is itself a trigger for section 352 tax. We look at both before you decide.
Who runs the voluntary liquidation?
An insolvency professional does, appointed as liquidator by the members’ special resolution. Before that, a majority of directors declare on affidavit that the company has no debt or can pay its debts in full, backed by audited accounts for two years and a valuer’s report where there are assets. The liquidator settles debts, transfers the surplus and applies to the NCLT for dissolution. We coordinate every step with the liquidator.
Can we merge with another Section 8 company instead of closing?
Yes. Section 8(10) lets a Section 8 company amalgamate only with another Section 8 company that has similar objects. On the tax side, section 352 is triggered by a merger with an entity other than a registered non-profit, so a merger into a registered non-profit with similar objects avoids it. Where a sister organisation already does the same work, merging can keep your programmes running. We assess both routes.
Which NCLT bench and ROC handle a Faridabad Section 8 company?
The NCLT Chandigarh bench hears Haryana companies, so a Faridabad company’s dissolution application goes there. Since 16 February 2026, Haryana also has its own ROC at Chandigarh, which receives the dissolution order within 14 days of it being passed. A Delhi company goes to the NCLT New Delhi bench instead. We file with the right bench and registrar from the start.
What it costs
Our fee plus the government fee that applies to your case, quoted before you commit. Tell us the situation and we will price it exactly.
The ₹10,000 STK-2 fee does not apply, because a Section 8 company cannot use Form STK-2. Each overdue AOC-4 or MGT-7 carries its normal filing fee plus ₹100 per day of additional fee.
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Ready to begin?
Tell us what your Section 8 company owns, owes and holds in registrations. We will map a closure that keeps the assets charitable and the tax file clean.