Strike Off a Company

STRIKE OFF A COMPANY

A Company goes for strike off when the management no longer wishes to carry on the business further. Strike off simply means removing of the name of the company from the Registrar of Company.

Section 248 of The Companies Act 2013 states about the provisions of Strike off of company.

BY THE COMPANY VOLUNTARILY

A company can make application to roc for strike off a company after extinguishing all its liabilities.

Shareholders’ approval by the way of special resolution is required before making an application.

By ROC

ROC can direct for strike off a company if it has reasonable cause to believe that–

i) a company has failed to commence its business within one year of its incorporation or

ii) 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 or

iii) 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 form INC 20A is not filed within 180 days.

iv) the company is not carrying on any business or operations, as revealed after the physical verification after registered office of company is found by Registrar of Companies.

PROCEDURE-

1. Board meeting: Convene a board meeting where board of directors will approve following transactions:

• Approval of strike off a company
• Authorization of any director of the company to apply to ROC
• Issuance of notice for extra ordinary general meeting.

2. Extinguishment of liabilities: After passing board resolution, if any liabilities exist company will extinguish all its liabilities.

3. Extra-ordinary General meeting: Convene extra ordinary general meeting for passing of special resolution.

4. Approval of Concerned Authority: In case any other authority regulates such company then approval of such authority is required.

5. Application to ROC: File E-form MGT-14 within 30 days of passing of the resolution with normal fees and E- form STK-2 with ROC. The prescribed challan for filing of this form is Rs 10000.

Attachments required for STK-2:-

• Copy of statement of account duly certified by chartered account in form STK 8(not earlier than 30 days from the date of making application)
• Copy of Board resolution
• Copy of Special resolution
• Indemnity bond in STK-3 duly notarized(Collectively given by directors)
• Affidavit in STK 4 duly notarized(Individually)
• ID proof of directors
• Bank Account closer statement

6. Acknowledgement of last ITR filed.Publication of notice by ROC; ROC shall publish notice in STK 6 inviting any objections from the public for the proposed strike off.The objections if any are sent to the respective ROC within 30 days of publication of notice.

7. Approval by ROC for strike off:ROC will release a notification in the Official Gazette in Form STK-7 about the Company’s strike-off and Dissolution.

COMPANIES NOT ELIGIBLE FOR STRIKE OFF-

a) Change its name or shifted its registered office anytime during previous three months.

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; or

e) is being wound up under Chapter XX, whether voluntarily or by the Tribunal or under the IBC,2016.

FOLLOWING COMPANIES CANNOT BE REMOVED SUO MOTO BY REGISTRAR

• Listed companies;
• Companies that have been delisted due to non-compliance of listing regulations or listing agreement or any other statutory laws;
• vanishing companies;
• Companies where inspection or investigation is ordered and being carried out or actions on such order are yet to be taken u p or were completed but prosecutions arising out of such inspection or investigation are pending in the Court;
• Companies where notices under section 234 of the Companies Act, 1956 (1 of 1956) or section 206 or section 207 of the Act have been issued by the Registrar or Inspector and reply thereto is pending or report under section 208 has not yet been submitted or follow up of instructions on report under section 208 is pending or where any prosecution arising out of such inquiry or scrutiny, if any, is pending with the Court;
• Companies against which any prosecution for an offence is pending in any court;
• Companies whose application for compounding is pending before the competent authority for compounding the offences committed by the company or any of its officers in default;
• Companies, which have accepted public deposits which are either outstanding or the company is in default in repayment of the same;
• Companies having charges which are pending for satisfaction; and
• Companies registered under section 25 of the Companies Act, 1956 or section 8 of the Act.