Closing a company through easy exit or strike-off
When a company has served its purpose and the owners want to close it, the right approach is to strike it off the register — and SECP's easy exit route makes that straightforward for a company that has genuinely wound down. But striking off is a definitive end, so the affairs of the company need to be in order first. This guide explains the easy exit route, what striking off does, and why settling up beforehand matters.
The easy exit route
SECP provides an easy exit route for closing a defunct company — broadly one that has ceased to operate and wound up its affairs, with no outstanding assets or liabilities. For such a company, easy exit allows an application to be struck off the register in a simplified way, rather than going through a more elaborate winding-up. It is the appropriate mechanism for the common situation of a small company that has stopped trading, has nothing left to distribute or owe, and simply needs to be closed cleanly. The route is premised on the company being genuinely wound down — which is why getting the company's affairs into that state is the real work of closing it.
What striking off does
The result of easy exit — and of striking off generally — is that the company is removed from the register of companies, which ends its existence as a legal entity. This is a definitive outcome: after strike-off, the company no longer exists to trade, hold assets, or be a party to contracts. That finality is exactly why it should only follow once the company's affairs are properly settled. Striking off is not a way to escape obligations or to make problems disappear — it is the formal end of a company that has already dealt with everything it needed to deal with.
Striking off is a route under the Companies Act 2017, by which the registrar removes a company's name from the register. Two things follow that owners consistently misread: the company ceases to exist as a legal person, so anything held in its name has to be dealt with first; and striking off is not a discharge of liabilities — it removes the entity, not the obligations that attached to it.
What has to be settled before, and what happens if it is not
| Item | Deal with it before striking off | If you do not |
|---|---|---|
| Bank accounts | Close and withdraw the balance | Funds are frozen in a company that no longer exists |
| Assets in the company name | Transfer or dispose | Title sits with a struck-off entity |
| Tax registrations | File final returns and deregister | Returns keep falling due; penalties accrue against the directors |
| Employee dues and EOBI | Settle in full | Claims follow the directors, not the shell |
| Supplier and lender balances | Settle or novate | Creditors can apply to restore the company |
| Contracts and licences | Terminate or assign | Counterparties left with an entity that cannot perform |
The third row is the one that catches people. Striking off at SECP does not close the FBR registration. An NTN with no company behind it keeps generating filing obligations, and the penalties attach to the people who were its officers. Deregister with FBR as a separate step, and keep the acknowledgement.
Settle affairs first
The most important practical point is that closing a company does not erase unsettled obligations. Creditors, employees, and tax authorities have claims that should be dealt with before the company is struck off, and the easy exit route is itself premised on the company having no outstanding assets or liabilities. So the sequence is: wind down operations, settle what the company owes, deal with its assets, address its tax position — and then apply to be struck off. Attempting to close a company while liabilities remain outstanding is neither clean nor, under the easy exit premise, appropriate. Settling first is both a requirement of the tidy routes and the responsible way to end a company.
We guide the wind-down, help settle affairs, and handle the SECP easy exit or strike-off application to close it cleanly.
Avail our SECP filing servicesClosing versus keeping
Closing is the right path only if the owners genuinely want to end the company. If they might use it again, inactive (dormant) status preserves it instead. And where the company has a tax footprint — whether in Pakistan or, for a company with US dealings, obligations akin to final US tax returns — those should be closed out as part of settling its affairs. Up until strike-off, the company remains on the register with its usual obligations, including its annual return, so it stays compliant right up to the point it is formally closed. Approached in order — settle, then strike off — closing a company is a clean and definite conclusion.
Sources
This guide is written against the official and clearly labelled professional references below. Rates, thresholds and portal procedures change between reviews, so open the primary source before relying on a figure.
Questions people also ask
What is SECP easy exit?
Easy exit is a route SECP provides for closing a defunct company — broadly one that has ceased to operate and has wound up its affairs, with no outstanding assets or liabilities. It allows such a company to apply to be struck off the register in a simplified way, rather than going through a more involved winding-up, and results in the company being removed from the register.
What does striking off do?
Striking off removes the company from the register of companies, which ends its existence as a legal entity. After strike-off the company no longer exists to trade, hold assets, or be a party to contracts. Because it is a definitive end, it should only follow once the company's affairs have been properly settled — its liabilities cleared and its assets dealt with.
Should I settle taxes and creditors before closing a company?
Yes. Closing a company does not erase obligations that were left unsettled. Creditors, employees, and tax authorities have claims that should be dealt with before the company is struck off, and the easy exit route is premised on the company having no outstanding assets or liabilities. Settling affairs first is both a requirement of the clean routes and simply the responsible way to close.
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