String Off Of Companies

The process of striking off is an alternative mechanism to the winding up of a company. The Companies Act encourages two methods of strike-off – to be specific, strike off by the ROC (Registrar of Companies) under Section 248(1) of the Companies Act 2013, and strike off by an organization voluntarily under Section 248(2) of the Companies Act, 2013

Grounds for Strike off

  • The company hasn’t commenced its business within one year of its incorporation.
  • The company hasn’t been pursuing any business or activity for the preceding two financial years, for which it hasn’t sought the status of Dormant Company under Section 455 of the Act.
  • At least a year has been passed since the last business activity.

Dormant Company

  • The word dormant, in general terms, means inactive or inoperative. To gain the classification though (which has its own benefits), the Company must file an application to the Registrar. The concept of dormancy was introduced to the corporate provisions in the Companies Act of 2013.

Strike Off by ROC

  • The Registrar of Companies may issue a notice to the Companies and its Directors in Form STK-1 (Removal of Names of Companies from the Registrar of Companies) if he/she holds a reasonable cause as specified above. Such a notice would inform the respective companies of the removal of its name from the record and request it to send its representatives with the requisite documents within thirty days of the issue of such notice. This process is also referred to as Compulsory removal of name from the Registrar of Companies.

Strike off on the Company’s Accord(Fast Track Exit Mode)

  • Form STK-2 needs to be filed by eligible company which needs to be closed or wants to strike off its name from the Registrar of Companies. It has to be filed electronically on MCA portal by making a payment of Rs. 5000/- as ROC Fees.
  • In case, the digital signature of any of the director or Manager or Secretary is not available for affixing to Form STK-2, a physical copy of the Form duly filled in, shall be signed manually by a director authorised by the Board of Directors of the company and shall be attached with the application Form at the time of its filing electronically. The same form needs to be certified by a Chartered Accountant in whole time practice or Company Secretary in whole time practice or Cost Accountant in wholetime practice
  • For any Mis Match, the application shall be accompanied by the certificate from the practicing CA/CS/CWA certifying the mentioned mismatch.
  • Any pending litigations involving the company should be disclosed while applying under this Scheme;
  • The attachments to E-form STK-2are as follows:-
    • An affidavit in Form STK -4 sworn by each of the existing director(s) of the company to the effect that the company has not carried on any business since incorporation or that the company did some business for a period up to a date (which should be specified) and then discontinued its operations and has not carried on any business since last one year, as the case may be.
    • An Indemnity Bond in Form STK -3, duly notarized, to be given by every director individually or collectively, to the effect that any losses, claim and liabilities on the company, will be met in full by every director individually or collectively, even after the name of the company is struck off the register of Companies.
    • Statement of Account made up to a day, not more than thirty days preceding the date of filing of application in Form STK-2 duly certified by a statutory auditor or Chartered Accountant in whole time practice, as the case maybe.
    • Copy of Board resolution showing authorization for filing the application.
    • A copy of the special resolution duly certified by each of the directors of the company or copies of consent of seventy five per cent of the members of the company in terms of paid up share capital as on the date of application.
    • A statement regarding pending litigations, if any, involving the company.
    • NOC from appropriate authority required, if any.
    • Copy of order of the concerned regulatory authority, if any, approving the filing of this application; if any.
    • Copy of relevant order for delisting, if any, from the concerned Stock Exchange; if any.
    • Physical Copy of Form STK-2 duly signed by Director/MD/Manager/ Secretary if no DSC is available.
    • The Registrar of Companies shall examine the same and if found in order, shall give a notice to the Company under section 248(2)of the Companies Act, 2013by e-mail on its email address intimated in the Form, giving thirty days time, stating that unless cause is shown to the contrary, its name be struck off from the Register and the company will be dissolved.
    • The Registrar of Companies shall, simultaneously intimate the concerned regulatory authorities regulating the company, viz, the Income-tax authorities, GST authorities having jurisdiction over the company, about the proposed action of removal or striking off the names of such companies and seek objections, if any, to be furnished within a period of thirty days from the date of issue of the letter of intimation and if no objections are received within thirty days from the respective authority, it shall be presumed that they have no objections to the proposed action of striking off or removal of name.
    • The Registrar of Companies immediately after passing of time given in above sub-paras and on being satisfied that the case is otherwise in order, shall strike its name off the Register and shall send notice under Section 248(5) of the Companies Act, 2013 for publication in the Official Gazette and the applicant company under this Scheme shall stand dissolved from the date of publication of the notice in the Official Gazette.

Comments (1)

Really appreciate you sharing this blog post.Really thank you! Cool. Vito Gerow

Leave a comment