Closing a Dormant Company Without a Winding-Up: Strike-off Under Section 346, the Clearances It Needs, and the Risks

In this guide: Strike-off or winding-up? · How section 346 works · Clearances before you write to the Registrar · After dissolution: liabilities, property and directors · Restoration, and the company struck off without your knowledge

The short answer

Decide first whether strike-off is the right exit. If the company has no assets, no creditors and no disputes, strike-off is quicker and cheaper than a members’ voluntary winding-up. If it has assets to distribute, creditors to pay through a liquidator, employees with claims or shareholders who disagree, use winding-up instead — see our winding-up guide. For strike-off, in order: (1) hold a board meeting and an EGM resolving to cease business and ask the Registrar to strike the company off; (2) prepare closing accounts to the cessation date and have them audited; (3) bring the RJSC record up to date — the outstanding annual returns and accounts with late fees, and a current Form XII — because the Registrar will not act on a request from a company in arrears; (4) pay off or settle every creditor, close the bank account, surrender the trade licence; (5) file the company’s final income-tax return and apply to cancel the TIN, file the final VAT return and apply to cancel the BIN, and obtain whatever clearance the circle issues; (6) write to the Registrar — there is no fee-based online strike-off service — stating that the company has ceased business and asking it to act under s.346, enclosing the resolutions, closing accounts, the directors’ declaration that the company has no assets or liabilities, and the clearances; (7) the Registrar issues the s.346 notices and, after the statutory periods, gazettes the strike-off. Budget four to eight months.

Strike-off or winding-up?

Strike-off is not a way to defeat creditors: a company struck off while owing money can be restored by the creditor, and the directors’ and members’ own liabilities survive. If there is any doubt about debts — a tax assessment pending, a landlord claim, an unreturned security deposit — wind up instead.

How section 346 works

Section 346 gives the Registrar power to strike off a company he has reasonable cause to believe is not carrying on business or in operation. The statutory steps: the Registrar sends the company a letter asking whether it is carrying on business; if no answer comes within one month, he sends within fourteen days a second registered letter referring to the first and stating that if no answer is received within a month a notice will be published with a view to striking the company off; if within that month he receives no answer, or an answer that the company is not carrying on business, he may publish in the Gazette and send to the company a notice that, at the end of three months, the company will be struck off unless cause is shown; at the end of that period he may strike it off and publish a notice in the Gazette, on which the company is dissolved. The same section lets the Registrar act on a liquidator’s report that the affairs are fully wound up. A company that wants to close cannot “apply” for strike-off as a service — there is no form or fee for it — but it can write to the Registrar stating that it has ceased business, which gives the Registrar the reasonable cause s.346 needs and answers the first letter in advance; no fee is charged for the strike-off itself. The draft 2026 amendment would let the Registrar strike off companies inactive for two years; it is not law.

Clearances before you write to the Registrar

The Registrar will not act on a strike-off request for a company whose own record is in default, and banks and tax circles will not cooperate with a company that has not closed its affairs with them. The checklist: RJSC — annual returns (Schedule X) and accounts for every year to cessation, filed with late fees, and Form XII current; accounts — audited closing accounts showing nil assets and nil liabilities, or a statement of how each was settled; bank — every account closed with a closing statement, any facility repaid and the bank’s no-dues letter; creditors and employees — paid, with settlements under the Labour Act 2006 for staff, and written releases where possible; tax — final income-tax return for the last period, payment of any demand, and an application to cancel the TIN; VAT — final return (Mushak 9.1), payment and an application for BIN cancellation (Mushak 2.4, with the final return on Mushak 2.5); licences — trade licence surrendered, IRC/ERC, Invest Bangladesh (formerly BIDA) registration and any sector licence cancelled. Then the members pass the resolution, the directors sign a declaration, and the letter goes to the Registrar. A company whose records cannot be reconstructed, or whose shareholders cannot be found to pass a resolution, is better left to the Registrar’s own s.346 action after it is reported as defunct, or wound up.

After dissolution: liabilities, property and directors

Dissolution ends the company, not everyone’s obligations. Section 346(5) preserves the liability of every director, officer and member as if the company had not been dissolved, and the Court’s power to wind up a struck-off company. Personal guarantees given for the company’s debts continue. Any property still in the company’s name at dissolution — land never transferred out, a vehicle, money in a forgotten account — no longer belongs to the members; it is treated as ownerless and recoverable only by restoring the company. Tax liabilities for years before dissolution can still be assessed against those the tax law makes responsible. In practice the directors’ concern is the reverse: once the Gazette notice is published and the RJSC record shows the company as “struck off”, their names are released from the defaults on its file, which is what clears the way for a new company or a bank facility. Keep the Gazette notices and the RJSC record for at least the restoration period.

Restoration, and the company struck off without your knowledge

A company struck off under s.346 can be restored by the Company Court on the application of the company, a member or a creditor who feels aggrieved, within the period s.346 allows, if the Court is satisfied that the company was carrying on business or that it is otherwise just; the order is filed with the Registrar and the company is deemed to have continued in existence as if never struck off, with the Court able to give directions for putting the company and others in the same position. The usual applicants are a shareholder who discovers that a company holding land was struck off for failing to file, a creditor who wants to sue, or a company that needs its registration back to complete a sale. Restoration requires the overdue filings and fees to be brought up to date and often an affidavit explaining the default. If you find that a company of yours has been struck off — or is in the Registrar’s s.346 notice list — act before the Gazette notice of dissolution if you can: an answer to the Registrar’s letter with the overdue filings stops the process; after dissolution, only the Court can reverse it. Our annual return guide covers bringing the filings current, and our company disputes desk takes restoration petitions.