The Ministry of Corporate Affairs notified Section 248 of the Companies Act, 2013 on December 26, 2016. The section deals with the power of the Registrar to remove name of a Company from the Register of Companies. This section provided an opportunity to defunct/inactive Companies to get their names struck off from the Register. It comes as a welcome measure for large corporates to close down some of their non-operative Companies and avoid annual Compliance costs.
1. Where a Company has failed to commence its business within one year from its incorporation.
2. Where a Company is not carrying on any business or operation for a period of two immediately preceding financial years and has not made any application within such period for obtaining the status of a dormant company.
3. Where 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 180 days of its incorporation.
4. Where the Company is not carrying on any business or operations, as revealed after the physical verification carried out under Section 12 sub section (9) of the Act.
A Company can after extinguishing all its liabilities file an application in form STK-2 along with fees of INR 5000/- to the Registrar for removing the name of the company from the register of companies on all or any of the grounds specified under Section 248 (1). Such application shall be approved by a special resolution passed by the members or on receipt consent of 75% of members in terms of paid-up share capital.
1. Indemnity bond duly notarised by every director in Form STK 3
2. A statement of accounts containing assets and liabilities of the company made up to a day, not more than thirty days before the date of application and certified by a Chartered Accountant.
3. An affidavit in Form STK 4 by every director of the company;
4. A copy of the special resolution duly certified by each of the directors of the company or consent of 75% of the members of the company in terms of paid up share capital as on the date of application.
5. Statement regarding pending litigations, if any, involving the company.
Note: In case of Companies regulated under Special Act, approval from such regulatory body shall be obtained and attached to the application.
ROC shall place the notices in Form STK-5/Form STK-6 in:
1. Official website of the Ministry of Corporate Affairs
2. Official Gazette
3. A leading English newspaper and at least in one vernacular language newspaper, both having wide circulation in the State in which the registered office of the company is situated
Note: A Company making application under Section 248 sub-section (2) also upload the application on its website, if any.
4. ROC shall simultaneously intimate the concerned regulatory authorities regulating the company, i.e. the Income-tax authorities, central excise authorities and service-tax authorities and seek objections if any. Such authorities shall submit their objections, if any, within a period of 30 days from the date of receipt of intimation.
5. In case no objections are received by ROC post publications and intimations from any party or concerned regulatory authorities, it shall under Section 248 sub section (5) of the Act issue a Notice in Form STK -7
6. Such notice of Striking off and Dissolution in Form STK-7 shall be published in official Gazette and placed on the website of MCA.
An application for striking off shall not be made if, at any time in the previous three months, the company—
(a) has changed its name or shifted its registered office from one State to another
(b) has made a disposal for value of property or rights held by it, immediately before cesser of trade or otherwise carrying on of business, for the purpose of disposal for gain in the normal course of trading or otherwise carrying on of business
(c) has engaged in any other activity except the one which is necessary or expedient for the purpose of making an application under that section, or deciding whether to do so or concluding the affairs of the company, or complying with any statutory requirement
(d) has made an application to the Tribunal for the sanctioning of a compromise or arrangement and the matter has not been finally concluded
Prepared by: Simit Parekh, Simit S Parekh & Associates, Company Secretaries, [email protected]