Discover the step-by-step process for striking off a company as per Section 248(2) of the Companies Act, 2013. Learn about board meetings, general meetings, required consents, and filing Form STK-2 with necessary attachments for a smooth and legal closure.
Closing down a company is a significant decision that requires adherence to legal procedures outlined by the Companies Act,2013. Section 248(2) of the Act provides the procedure for striking off a company’s name from the Register of Companies. Let’s explore the step-by-step process involved in the strike-off procedure.
Step 1: Call a Board Meeting The first step is to convene a board meeting as per Section 173 of the Companies Act, 2013. The board meeting should discuss and decide the following:
(a) Strike off the company’s name from the Register of Companies
(b) Call a General Meeting to pass a Special Resolution for striking off the company (If the company calls a General Meeting on shorter notice, the consent of the shareholders is required.)
Step 2: Hold General Meeting and Obtain Consent The company should hold a General Meeting and obtain consent from the shareholders. The consent can be in the form of a Special Resolution. If the company is a Private Limited Company, it may obtain consent from 75% of its members in terms of paid-up share capital, instead of calling a General Meeting.
Additionally, the company should file Form MGT-14 with the Registrar of Companies, providing details of the consent obtained from the shareholders.
Step 3: File STK-2 with Attachments The next step is to file Form STK-2 (Application for Strike Off) with the Registrar of Companies. The following attachments should be included:
(a) STK-3: An indemnity bond on non-judicial stamp paper, duly notarized and signed by every director of the company.
(b) STK-4: Separate affidavits, on non-judicial stamp paper, signed by each director and duly notarized.
(c) STK-8: A statement of accounts in PDF and Excel format, after clearing all liabilities. The statement must be signed by a whole-time practicing Chartered Accountant (CA) with UDIN (Unique Document Identification Number) and should not be older than thirty days from the date of application. The statement must indicate a nil balance.
(d) A statement regarding any pending litigations involving the company.
(e) KYC documents duly certified by a gazetted officer or a practicing CA/CS/CMA.
(f) If the company has a foreign director, all the above-mentioned documents should be apostilled by the concerned authority or foreign diplomats.
(g) If the company has a corporate shareholder, the company shall obtain Board Resolution (BR) and Special Resolution (SR) authorizing a representative.
(h) Copy of the previous year’s Income Tax Return (ITR).
(i) Latest financial statements, including any overdue financial statements under Section 137 and overdue annual returns under Section 92. These should be up to the end of the financial year in which the company ceased to carry out its business operations.
(j) No Objection Certificate (NOC) from sectoral regulatory bodies such as RBI, IRDA, SEBI, State/Central Government, as applicable.
By following these steps and providing the necessary documentation, a company can proceed with the strike-off procedure in compliance with Section 248(2) of the Companies Act, 2013.
It is important to note that the strike-off process involves legal formalities and should be undertaken with due diligence. Seeking professional advice from legal and financial experts can ensure that the process is carried out smoothly and in accordance with the law.
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Disclaimer: The information provided in this article is for general informational purposes only and should not be construed as legal advice. It is always advisable to consult with qualified professionals for specific guidance related to your company’s circumstances.
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