Step-by-Step: How to Close a Private Limited Company Under C-PACE 2026

Deciding to close a Private Limited Company is never a simple decision, but delaying the process makes it significantly more expensive. Every month a dormant Pvt Ltd sits on the Ministry of Corporate Affairs register, it accumulates ROC filing penalties at ₹200 per day per overdue form under Section 403 of the Companies Act, 2013. Left unresolved for 3 consecutive years, the directors face automatic disqualification under Section 164(2). The C-PACE 2026 framework changes this equation by offering a structured, fast-track route to voluntary dissolution in 60 working days, protecting directors and clearing compliance backlogs in a single process. This guide covers every step, document, fee, and eligibility check a Private Limited Company needs to exit cleanly under C-PACE.

What Is C-PACE 2026?

C-PACE is not a new legal power for the ROC. It is a procedural upgrade layered on top of Section 248 of the Companies Act, 2013, the same section that has governed voluntary strike off since 2017. What changed in 2026 is the digital workflow: the MCA V3 portal now validates eligibility in real time, flags outstanding filings, and compresses the back-and-forth scrutiny cycle that previously added months to the process. For a Private Limited Company with clean books, C-PACE is straightforwardly the fastest legal exit available.

The scheme is available to all types of companies registered under the Companies Act, 2013, including One Person Companies and LLPs. This guide focuses specifically on Private Limited Companies, which have two or more directors and shareholders whose approvals must be documented before filing.

Is Your Private Limited Company Eligible for C-PACE?

The ROC checks 8 eligibility conditions before accepting a C-PACE application. Companies that fail any one of these checks will receive a rejection or an escalation to the traditional STK-2 process without the 60-working-day guarantee.

• Dormancy Requirement: The company must have had no active business operations, no revenue, and no expenditure (other than statutory compliance costs) for at least one full financial year preceding the application date
• Nil Active Bank Balance: All company bank accounts must be closed and closure confirmation letters from the bank must be available. A company cannot apply with an active account, even with a zero balance
• GSTIN Surrendered: If the company ever obtained a GST registration, the GSTIN must be cancelled and Form GSTR-10 (Final Return) must have been filed and acknowledged before the STK-2 is submitted
• No Pending Tax Demands: No outstanding income tax assessment orders, tax demands, or refund claims can be pending. A no-dues confirmation from the income tax department is required
• ROC Filings Current: All annual filings including Form MGT-7 (Annual Return) and Form AOC-4 (Financial Statements) must be filed for every financial year up to the year preceding closure. Pending filings must be cleared with full penalty payment before applying
• No Pending Litigation: No suit, appeal, or arbitration proceedings should be pending before any court, tribunal, or quasi-judicial authority in the name of the company
• Directors Not Disqualified: All directors must hold active DINs and must not be disqualified under Section 164 of the Companies Act, 2013. Disqualified directors cannot sign STK-2 or the associated affidavits. Check your DIN status through Director KYC Update
• No Pending ROC Show-Cause Notices: No show-cause notice issued by the ROC under any section of the Companies Act should be pending against the company or its directors

Pre-Application Steps: Preparing Your Pvt Ltd for C-PACE

C-PACE shifts most of the compliance burden to the pre-application stage. Unlike the traditional STK-2 route where the ROC would identify compliance gaps during processing, C-PACE requires the company to self-certify compliance upfront. These are the six preparatory steps that must be completed before STK-2 is filed.

Step 1: Pass the Board Resolution and Shareholder Consent

Hold a Board Meeting and pass a resolution approving the voluntary closure of the company. Under Section 248(2) of the Companies Act, 2013, written consent from at least 75% of the paid-up share capital (by value) is required. For most Private Limited Companies with 2 to 5 shareholders, a signed special resolution or a written consent form from all shareholders works. Document the resolution with the date, names of directors present, and the exact text of the resolution approving the C-PACE application.

Step 2: Close All Company Bank Accounts

Contact the company's bank branch and request account closure. After clearing the final balance (by distributing funds to shareholders in proportion to their shareholding), obtain the official bank account closure letter on the bank's letterhead, confirming the account number and closure date. If the company has accounts with multiple banks, each must be separately closed and evidenced. This letter is a mandatory attachment to STK-2.

Step 3: Surrender GSTIN and File GSTR-10

Log in to the GST portal (gst.gov.in) and apply for GST registration cancellation. After the cancellation order is issued, the company has 3 months to file GSTR-10 (Final Return) declaring nil stock and nil ITC claims. Download the GSTR-10 acknowledgment once filed. Both the GST cancellation order and the GSTR-10 acknowledgment are mandatory C-PACE attachments. Get assistance with GSTR-10 Final Return filing if any complications arise during the cancellation process.

Step 4: File All Pending ITRs and Obtain No-Dues Certificate

File all outstanding Company Income Tax Returns (ITRs) for every assessment year the company has been registered. Even if the returns are NIL, they must be filed. After filing, the income tax department's portal should reflect no pending demands. For companies with tax portal discrepancies, a formal no-dues certificate from the Assessing Officer may be required. Assistance is available through Income Tax Return filing services.

Step 5: Clear All Overdue ROC Filings and Pay Penalties

Log in to MCA V3 and check the company's filing status. File any pending Form MGT-7 (Annual Return) and Form AOC-4 (Financial Statements) for all outstanding financial years. Pay the applicable Section 403 late fees, which accumulate at ₹200 per day per form with no ceiling. For a company that has not filed for 3 years, the total penalty on both forms can exceed ₹8 lakh. Clearing these before C-PACE is mandatory. Check your Private Limited Company Compliance status for a complete picture of outstanding filings.

Step 6: Dispose of All Assets and Prepare Statement of Accounts

Ensure the company holds nil assets before filing STK-2. Sell or transfer all fixed assets, settle all receivables, distribute remaining cash to shareholders, and write off any intangible assets or goodwill. Have a qualified Tax Professional prepare a Statement of Accounts as of a date not earlier than 30 days before STK-2 filing, certifying nil assets and nil liabilities. This certified statement is attached to the STK-2 application on MCA V3.

Documents Required for C-PACE Strike Off of a Private Limited Company

The MCA V3 portal requires the following documents as attachments to the STK-2 application. Prepare these in advance to avoid delays on the filing date.

Step-by-Step: The C-PACE Process for Private Limited Companies

Once all pre-application steps are complete and all documents are ready, the C-PACE process moves through 5 formal stages on the MCA V3 portal. Here is the complete sequence from STK-2 submission to the Gazette notification.

1. Login to MCA V3 and Initiate STK-2
   The authorised director or filing agent logs in to the MCA V3 portal (mca.gov.in) and navigates to the company's dashboard. Select Form STK-2 under the Company Services section. The portal automatically pulls the company's CIN, registered name, and current filing status. Verify these details before proceeding.
2. Complete the STK-2 Form Online
   Fill in the company details, the date of board resolution, the declaration of nil assets and liabilities, and the grounds for closure. The portal validates the company's compliance status in real time, flagging any outstanding annual returns or MCA penalties. If any flags appear, the filing cannot proceed until the flagged items are cleared. This is the C-PACE portal's front-loading check that separates it from the traditional STK-2 workflow.
3. Upload Attachments and Pay Government Fee
   Upload all mandatory documents from the checklist above in PDF format. The MCA V3 portal specifies maximum file sizes and acceptable formats. After all attachments are uploaded, proceed to the payment gateway to pay the ₹10,000 government filing fee. Payment is accepted via net banking, debit card, or RTGS/NEFT. Save the payment receipt for your records.
4. Director DSC Authentication
   After payment, each director must authenticate the STK-2 using their Class 3 Digital Signature Certificate. All directors listed in the company's register must sign. If a director is in a different city or country, the signing can be done remotely on the MCA V3 portal using their registered DSC token or MCA registered mobile OTP. Once all DSC authentications are recorded, the form is electronically submitted to the ROC.
5. ROC Acknowledgment and SRN Generation
   Upon successful submission, MCA V3 generates a Service Request Number (SRN), confirming that the application has been received by the ROC. The ROC office then reviews the application within 15 to 20 working days. If the application is complete and the compliance dashboard shows no pending flags, the ROC marks it as accepted and proceeds to the public notice stage.
6. Public Notice in the Official Gazette (30-Day Window)
   The ROC publishes a public notice in the Official Gazette of India inviting objections from creditors, employees, regulatory authorities, or any other interested party. The notice remains open for 30 days from the date of publication. Any person with a claim against the company can file a formal objection with the ROC during this window. Objections that are valid and verified will cause the application to be stayed pending resolution.
7. No-Objection Period Closes
   If no valid objection is received during the 30-day window, the ROC closes the objection period and marks the application for final processing. The ROC may conduct an internal verification of tax clearances with the income tax and GST departments during this stage. Any discrepancy discovered at this point, such as an undisclosed tax demand, will trigger a query to the company before the final order is issued.
8. ROC Issues Final Dissolution Order
   After the 30-day window closes without valid objection, the ROC issues the Final Order for Strike Off and publishes a second Gazette notification confirming the company's dissolution. The company name is removed from the Register of Companies maintained by the Ministry of Corporate Affairs. The company ceases to exist as a legal entity from the date of this second Gazette notification.
9. Download and Preserve the Strike Off Notice
   Download and preserve the Gazette notification copy as permanent proof of dissolution. This document will be required if directors apply for new company incorporation, need to update credit bureau records, or ever need to counter any future claims made in the struck-off company's name. Store all company records, books of account, and filed returns for a minimum of 8 years from the date of dissolution as required by the Companies Act, 2013.

Cost Breakdown for C-PACE Closure of a Private Limited Company

The total cost of C-PACE closure depends on how many overdue filings the company carries before applying. A company with all filings current faces only the government fee and modest professional charges. A company with 3 years of overdue returns will face substantial ROC penalties on top of the base cost.

For a company with 3 years of overdue MGT-7 and AOC-4 filings, accumulated ROC penalties alone can reach ₹8 lakh to ₹12 lakh. This is the single largest variable cost in the C-PACE process and a strong reason to initiate closure early. The longer an inactive company remains on the register, the higher the penalty accumulation before voluntary closure is possible.

C-PACE vs STK-2 vs NCLT Winding Up: Which Route is Right?

Not every Private Limited Company can or should use C-PACE. The table below compares the three main dissolution routes available under Indian law to help directors identify the most suitable option based on their company's specific circumstances.

For companies with active assets, pending creditor claims, or unresolved employee dues, C-PACE is not an available option. Directors of such companies should explore NCLT-supervised winding up or the voluntary liquidation route under the Insolvency and Bankruptcy Code (IBC), 2016. See also: Closure of One Person Company and Closure of LLP for other entity types.

What Happens After the Company Is Struck Off?

The legal and practical consequences of C-PACE strike off extend beyond the date of the Gazette notification. Directors should plan for each of these post-dissolution actions.

Company PAN and TAN Deactivation

The MCA shares the strike off Gazette notification with the income tax department, which then marks the company's PAN (Permanent Account Number) and TAN (Tax Deduction Account Number) as inactive. No separate application to the tax department is required. However, if the company had any pending tax refund claims, directors should follow up with the Assessing Officer before filing the STK-2, as struck-off companies cannot claim refunds.

Trademark and IP Transfers

Any registered trademarks, patents, or copyrights held in the company's name must be transferred to a surviving legal entity (such as a new company or the individual founders) before the strike off is filed. Post-dissolution IP transfers are complex and require NCLT involvement. The same applies to domain names and software licences registered in the company's name.

Creditor Claims Post-Strike Off

Despite the dissolution, creditors retain the right to file a restoration petition before NCLT under Section 252 of the Companies Act, 2013 within 20 years of the strike off. If a creditor successfully proves that the company had undisclosed liabilities at the time of dissolution, directors can be held personally liable, which is why the Form STK-3 indemnity bond and Form STK-4 affidavit carry significant legal weight.

Director Records

After dissolution, the MCA updates the struck-off company's record to reflect the dissolution date and status. Directors' DINs remain active and their track record of directorships on MCA V3 will show the company as "Struck Off" rather than "Active." This is a neutral status and does not affect eligibility to serve as a director in other companies, provided the C-PACE process was completed without any non-compliance findings. Keep the Gazette notification and all company records for a minimum of 8 years.

Common Mistakes That Delay C-PACE Applications

The most frequent causes of STK-2 rejection or delay in the C-PACE process are preventable with careful pre-filing preparation. These 7 mistakes account for the majority of application defects flagged by the ROC.

• Filing STK-2 with an Active GSTIN: The GST portal and MCA V3 are linked. If GSTIN cancellation is not confirmed in the GST system at the time of STK-2 filing, the portal will reject the application. Complete the GSTIN cancellation and GSTR-10 filing at least 7 working days before submitting STK-2 to allow portal synchronization
• Statement of Accounts Older Than 30 Days: The Tax Professional-certified statement of accounts must be dated within 30 calendar days of the STK-2 filing date. A statement prepared at the start of the preparation process may be outdated by the time all other documents are gathered. Plan the statement preparation last, after all other pre-requisites are met
• DSC Expired or Not Linked to MCA: Directors who have not used MCA V3 recently may find their DSC expired or unregistered in the portal. Renew the Digital Signature Certificate and update it on the MCA V3 profile at least 2 weeks before the planned filing date
• Unstated Pending Filings: Even one pending Form MGT-7 or Form AOC-4 will cause MCA V3 to block STK-2 submission. The portal's real-time compliance check is exhaustive. Run a full audit of all company filings on the MCA portal before initiating the STK-2 workflow
• Incomplete Indemnity Bond: Form STK-3 must be executed on non-judicial stamp paper of the required denomination (state-specific) and notarized. A Form STK-3 printed on plain paper or lacking notarization is not acceptable and will be treated as an incomplete attachment
• Signing by a Single Director: All living directors must execute and sign STK-2, STK-3, and STK-4. A common mistake is having only the primary director sign. If a director is abroad or unavailable, MCA V3 allows DSC-based remote signing, but all directors must complete their individual signings before submission
• Filing After ROC Initiates Strike Off: If the ROC has already issued a show-cause notice under Section 248(1) for failure to commence business or non-filing of returns, the voluntary C-PACE route is no longer available until the notice is formally withdrawn. Address any ROC show-cause notices before attempting voluntary strike off

When Should You Consider an Alternative to C-PACE?

C-PACE works best for companies that have no transactions, no assets, and no creditors. There are four situations where an alternative route is necessary.

Company Has Assets or Outstanding Creditors

If the company holds any assets, even a modest fixed deposit or trade receivable, C-PACE is unavailable. The company must first liquidate all assets, pay all creditors, and distribute the surplus to shareholders before applying. If creditors cannot be paid from available assets, the company must apply for NCLT winding up, where a court-appointed liquidator oversees asset realisation and creditor payment before dissolution. Read about the Private Limited Company Closure process for companies with complex balance sheets.

Company Has Ongoing Employee Claims

Any pending salary dues, provident fund arrears, gratuity claims, or employee litigation must be settled before applying for C-PACE. The Labour Commissioner can file an objection during the 30-day Gazette notice period if employee dues remain unpaid, which will stay the strike off until claims are resolved.

Directors Are Disqualified Under Section 164

If any director is disqualified under Section 164(2) for failure to file annual returns for 3 consecutive years, they cannot sign STK-2. The company needs to first restore the director's DIN eligibility (if possible through NCLT petition) or appoint a new non-disqualified director before the voluntary closure can proceed. In practice, if the disqualification was triggered by the same company's non-filing, this becomes a circular compliance issue best handled with professional guidance.

Company Is Subject to Regulatory Inquiry

Companies under investigation by SEBI, ED, CBI, or any regulatory authority cannot apply for voluntary strike off until the inquiry is formally closed. The C-PACE portal checks against publicly available regulatory watchlists, and the ROC also independently verifies with regulators during the 30-day notice period.

Closing a Private Limited Company: Key Takeaways

IncorpX has provided assistance for company closures across India and the most common pattern is the same: directors wait 2 to 3 years before deciding to close, accumulate ₹6 lakh to ₹12 lakh in unnecessary ROC penalties, and then discover that the STK-2 portal is blocked because a director's DSC expired 18 months ago. Planning the closure the moment a company's operations wind down, rather than at the end of 3 years, cuts total cost by over 80% in most cases.

C-PACE 2026 is the most practical route to close a Private Limited Company in India for directors who want a clean, documented exit in the shortest possible time. The 60-working-day timeline is contingent on front-loading all compliance work before the STK-2 is submitted. Any company attempting to file STK-2 with outstanding ROC returns, an active GSTIN, or open bank accounts will face rejection and the process will restart. The cost scales primarily with the number of overdue filings: a company current on all returns faces total costs in the range of ₹20,000 to ₹30,000, while one carrying 3 years of ROC arrears may face ₹10 lakh or more in penalties before the base strike off cost.

Directors of inactive Private Limited Companies should act sooner rather than later. Every financial year without closure adds two mandatory ROC filings (Form MGT-7 and Form AOC-4), and each overdue day adds ₹400 in combined penalties (₹200 per form). For the average dormant company, waiting 12 months longer than necessary costs ₹1.46 lakh in additional preventable penalties. Plan the C-PACE process as soon as a company's operations wind down, and use the time required to clear compliance backlogs, close bank accounts, and surrender GSTIN to stay ahead of the accumulating penalty curve.