Exit Guide

How to Close an India Subsidiary

Exiting India cleanly matters as much as entering. Whether you strike off a dormant company or liquidate an operating one, the tax, FEMA and ROC steps must line up to repatriate surplus without penalties.

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In short: An Indian subsidiary can be closed by fast-track strike-off (Form STK-2, for dormant or non-operating companies with no liabilities) or by voluntary liquidation (for companies with assets or creditors, via an insolvency professional under the IBC). Both require settled liabilities, final tax filings and FEMA clearance to repatriate any surplus to the foreign parent. Strike-off typically takes a few months; liquidation takes longer.

When to close — and the two routes

Feature	Strike-off (STK-2)	Voluntary liquidation
Use when	Dormant / no liabilities	Has assets / creditors
Process	MCA Form STK-2	Insolvency professional under IBC
Timeline	A few months	Longer
Best for	Simple closure	Complex wind-down

Fast-track strike-off (STK-2)

No ongoing operations or liabilities
Board and shareholder approvals
Settle all outstanding dues
File Form STK-2 with statement of accounts and affidavits
ROC strikes the company off the register

Voluntary liquidation (IBC)

For companies with assets or creditors, voluntary liquidation is run by an insolvency professional appointed by the members. The professional realises assets, settles creditors in the statutory waterfall, distributes any surplus to shareholders and obtains the dissolution order.

Tax & final filings

File the final income-tax return
Close pending assessments and appeals
File final TDS and GST returns
Surrender GST, PAN-linked and other registrations

FEMA & repatriating surplus

Remaining surplus can be remitted to the foreign parent through the AD bank with Form 15CA/15CB and FEMA compliance. Where the entity was funded by NRI investment, see NRI investment & FEMA compliance for the repatriation routing.

Timelines & common pitfalls

Unsettled statutory or trade dues
Open litigation or assessments
Incomplete ROC / tax / FEMA filings
Blocked repatriation due to missing 15CA/15CB

Frequently asked questions

What are the ways to close a company in India?

The two main routes are fast-track strike-off (Form STK-2, for dormant companies with no liabilities) and voluntary liquidation (via an insolvency professional under the IBC, for companies with assets or creditors).

What is the difference between strike-off and liquidation?

Strike-off is a simpler MCA process for dormant, debt-free companies. Liquidation is a formal wind-down led by an insolvency professional, used where the company has assets to realise or creditors to settle.

Can a foreign parent repatriate the remaining funds when closing an India subsidiary?

Yes, after settling liabilities and taxes, the surplus can be repatriated to the foreign parent through an AD bank with Form 15CA/15CB and FEMA compliance.

How long does it take to close an Indian company?

A fast-track strike-off typically takes a few months once dues are settled; a voluntary liquidation takes longer depending on assets, creditors and any litigation.

Reviewed by CA Regi Tom Antony, Regi Tom Antony & Associates. Last updated: July 2026.

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