Changes in Rules related to Striking off the names of company

MCA has come with a Gazzate Notification dated 9^th June, 2022 amending the erstwhile Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016 with Companies (Removal of Names of Companies from the Register of Companies) Amendment Rules, 2022.  It is by this notification that Rules related to Striking off the names of company from the records maintained by Registrar under Section – 248 has been amended which is discussed below, but before that let us first understand the concept of Section – 248(2) related to suo-moto application by Company for removing their name from the register of companies.

Pursuant to the provisions of sub-section (2) of Section 248 of the Companies Act, 2013, the company after extinguishing all its liabilities and passing a special resolution or obtaining consent of 75% members in terms of paid-up share capital, can make an application voluntarily to the Registrar of Companies (ROC) for striking off its name from the Register on all or any of the grounds as mentioned in sub-section (1) of section 248. Such application shall be made by the company in Form STK 2, being an application form for voluntary striking off the name of the company.

The company further needs to obtain a No Objection Certificate from the appropriate regulatory authority if it is governed by any Special Act and the same needs to be attached with Form STK 2. Further, the application needs to be certified by a CA/CS/Cost Accountant in whole time practice. Along with the application, indemnity bond in Form STK 3 and an affidavit from the directors in Form STK 4 shall be annexed thereto.

It is to be noted that Section 8 companies cannot make voluntary application to ROC for striking off. Section 8 Companies or Charitable Companies cannot directly apply for striking off of its name and as a result of which, such company needs to convert itself into a Private Company and then, make an application for striking off. The effect of such conversion is that the application is now being made by a private company and not by a section 8 company.

However, MCA through its notification dated 9^th June, 2022, stated that if on examination of application made by a company in Form STK 2, for voluntary striking off the name; ROC finds such application or any documents attached thereto to be incomplete or defective or discovers the need to call for further information, it shall inform the same to the applicant company, giving them 15 days time (from the date of communication) to make such corrections and resubmit the application, failing which ROC shall treat the form as invalid.

If on resubmission also, ROC finds such application or any documents attached thereto to be incomplete or defective, it shall give further time of 15 days to complete the form or remove the defects, failing which, ROC shall consider the form to be invalid.

Through this insertion in rule (4), after sub rule (3) of Companies (Removal of Names of Companies from the Register of Companies), Rules, 2016, we can opine that if the ROC on finding the application made in Form STK 2 incomplete, defective, or needs further information in this regard, then, a maximum of two resubmissions shall be allowed; after which the Registrar shall treat the form as invalid.

Further it is to be noted that any resubmission of the application form in STK 2 prior to 9^th June, 2022 shall not be included in the limit of maximum number of resubmission of such forms.

In addition to this, the following forms have undergone certain changes through MCA’s notification dated 9^th June, 2022.

Form STK 1, being notice served by the Registrar for removing the name of the company from the register of companies suo-motu, point (1) has been amended as stated below-

(1) “Pursuant to sub-section (1) of section 248 of the Companies Act, 2013, notice is hereby given that as per available record,”

Form STK 1 shall only be applicable when the name of the company is being removed from the register of companies by ROC suo-motu, and shall not cover the voluntary application made by the company under sub-section (2) of section 248; which was covered erstwhile.

As a result of the above, one of the reason for striking off the name of the company contained in Form STK 1 which states that “the company has filed an application under sub-section (2) of section 248 for removing the name from the register of companies on the grounds mentioned in sub-section (1) of section 248.”; has been substituted by the following;-

“the subscribers to the memorandum have not paid the subscription which they had undertaken to pay at the time of incorporation of a company and a declaration to this effect has not been filed within one hundred and eighty days of its incorporation under sub-section (1) of section 10A.”

In Form STK 5, being a Public Notice, issued in case the application for striking off is being made by a company voluntarily, the following has been inserted as sub-point (iii) under point (1) –

“in the following companies, the subscribers to the memorandum have not paid the subscription which they had undertaken to pay at the time of incorporation of a company and a declaration to this effect has not been filed within one hundred and eighty days of its incorporation under sub-section (1) of section 10A” :-

In Form STK 5A, being a Public Notice, issued in case the name of the company is being removed by ROC suo-motu, the following has been inserted as sub-point (iii) under point (1) –

 “the subscribers to the memorandum have not paid the subscription which they had undertaken to pay at the time of incorporation of a company and a declaration to this effect has not been filed within one hundred and eighty days of its incorporation under sub-section (1) of section 10A.”