Blogs: Did You Forget to File INC-20A? Here's How to Legally Close Your Company Without Late Fees or Penalties

Overview

If you registered a private limited company or One Person Company (OPC) but never actually started business, you're not alone. Many startups incorporate companies with great enthusiasm, but due to funding issues, market shifts, or team changes, the business never really begins. Now it's been more than one year since incorporation, and you’re wondering: • Should I file Form INC-20A now? • What about the penalties for AOC-4 and MGT-7? • Will I be disqualified as a director? • Can I just close the company and move on? Here’s the good news: Yes, you can legally wind up your inactive company without paying any late fees or penalties.

Did You Forget to File INC-20A? Here's How to Legally Close Your Company Without Late Fees or Penalties

If You Haven’t Filed INC-20A and Your Company Did No Business — You Can Close It Without Filing AOC-4 or MGT-7

Under Section 248(2) of the Companies Act, 2013, companies that have not commenced business within one year of incorporation are eligible for voluntary strike-off.

This means that:

If your company has not filed Form INC-20A (Declaration for Commencement of Business)
And the company has never conducted any business
And one year has passed since incorporation

You can file Form STK-2 and legally strike off your company — without filing Form AOC-4 (financial statements) or Form MGT-7/MGT-7A (annual return).

This is 100% legal and supported by both the Companies Act and MCA guidelines.

Why You Don’t Need to File AOC-4 or MGT-7 If the Company Never Started

Many founders think that even if the company never operated, they must still file AOC-4 and MGT-7 to close it.

But here’s the truth: annual filings are only mandatory for companies that actually carried on business during a financial year.

If your company never commenced any operations at all, then:

There are no financials to report
There is no "last financial year of business"
Therefore, you are not required to file AOC-4 or MGT-7 before closure

This interpretation is supported by corporate law experts and accepted by the Ministry of Corporate Affairs (MCA) during strike-off applications under Section 248(2).

Cost of Closing a Company That Never Started

If you choose to voluntarily close your non-operational company, your only cost is:

₹10,000: Government filing fee for Form STK-2

You may also incur minimal costs for:

Notarization of documents (affidavit and indemnity bond)
Certification by a Chartered Accountant or Company Secretary
Preparation of a nil balance sheet (Form STK-8)

You do not need to pay:

₹50,000 or more penalty for non-filing of INC-20A
₹100 per day late fee on AOC-4 or MGT-7
₹10,000+ in compounding penalties or prosecution costs
Any disqualification-related consequences as long as strike-off is timely

What Happens to Your Directorship in Other Companies?

You may be wondering whether this affects your ability to be a director in other companies.

The answer is: No, it does not.

Under Section 164(2) of the Companies Act, a director is disqualified only if they fail to file financials for three consecutive years in a company.

But in this case:

Your company will be closed within one year or shortly after
There is no three-year non-compliance
Your DIN remains valid, and you can remain or become a director in other companies without issue

Step-by-Step Process to Strike Off an Inactive Company

Here’s how you can legally close your company under Section 248(2):

Ensure eligibility: At least one year has passed since incorporation and no business was ever started.
Hold a board meeting: If applicable, pass a resolution for strike-off.
Obtain shareholder approval: Pass a special resolution or get 75% shareholders’ consent.
Prepare financials: A nil balance sheet (Form STK-8) certified by a Chartered Accountant.
Sign affidavits and indemnity bonds: From all directors, in prescribed formats (STK-3 and STK-4).
File Form STK-2: Online on the MCA portal, along with all attachments and ₹10,000 fee.
Wait for ROC approval: The Registrar will publish a public notice, wait for objections, and if none arise, issue a final order striking off the company.

This process generally takes 60 to 90 days from the date of filing.

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