Strike-Off Without Annual Filings: Is CCFS Scheme 2026 Required?

Strike Off Without Annual Filings
Is the CCFS Scheme 2026 Required? A Comprehensive Clarification
Under the Companies Act, 2013 Rule 4, Removal of Names Rules, 2016

Executive Summary

A significant point of professional confusion has emerged regarding whether Companies seeking strike off under Section 248 of the Companies Act, 2013 are required to complete all Pending annual filings, and whether the Company Compliance Facilitation Scheme (CCFS) Scheme 2026 provides any relaxation in this regard.

This write-up sets out the legal position comprehensively: the obligation to complete annual filings prior to strike off is already governed by the Act and the applicable Rules, and the CCFS Scheme 2026 does not alter, expand, or relax this obligation in any manner. The law, as it stands, already permits companies to apply for strike off without completing annual filings for years during which no business activity was carried on – a position embedded in the statute itself.

Key Conclusion

The CCFS Scheme 2026 grants NO additional relaxation regarding annual filings for strike off purposes.

The ability to proceed without such filings for dormant/inactive years already exists under the existing legal framework.

Companies must, however, strictly comply with procedural requirements under Rule 4 of the Removal of Names Rules, 2016.

1. Legal Framework for Strike Off Under the Companies Act, 2013

1.1  Statutory Basis – Section 248

Section 248 of the Companies Act, 2013 provides the Registrar of Companies (RoC) with the power to remove the name of a company from the register. This power may be exercised either suo motu by the RoC or upon an application filed by the company itself. For voluntary strike off initiated by the company, sub-section (2) of Section 248 sets out the conditions that must be satisfied:

• The company has ceased to carry on business or has not commenced business within one year of its incorporation.
• All pending liabilities of the company have been fully extinguished.
• The company has obtained the requisite consent from its members.
• The application for strike off is made in the prescribed Form STK-2 along with the required documents.

Critically, the law does not prescribe completion of annual filings pending as a universal pre-condition for strike off. The requirement for annual filings is linked to the period during which the company was engaged in business or operations.

1.2  The Scope of Annual Filing Obligations in the Strike Off Context

Annual filings under the Companies Act, 2013 – primarily the filing of financial statements (Form AOC-4) and annual returns (Form MGT-7/MGT-7A) – are obligatory for every financial year in which a company has conducted business or carried out operations. The following principles govern the application of this obligation in the context of strike off:

2. Rule 4 of the Companies (Removal of Names) Rules, 2016 – Procedural Compliance

Rule 4 of the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016 governs the procedural requirements for a company-initiated voluntary strike off application. The Rule prescribes the following key compliances:

2.1 Filing Requirements Under Rule 4

• Application in Form STK-2 duly signed by all directors.
• Statement of accounts prepared as of a date not earlier than 30 days before the date of filing of the application.
• A declaration/affidavit from the directors certifying that the company has not carried on any business since cessation or inception, as applicable.
• Consent/indemnity bonds from all members of the company.
• Certified true copy of the special resolution authorizing the strike off, where required.
• A statement that no inquiry, inspection, or investigation is pending against the company.

2.2 Implication on Annual Filings

A close reading of Rule 4 reveals that it does not mandate the completion of all historical annual filings as a pre-condition to the application. The requirement is anchored in:

• Ensuring the declaration of non-operation is truthful and verifiable.
• Ensuring the financial position is accurately captured in the Statement of Accounts.
• Ensuring no pending liabilities are outstanding.

This framework clearly contemplates that for years in which the company was not operational, the obligation to file returns does not crystallize merely because the company continues to exist on the register.

3. The CCFS Scheme 2026 – Scope, Purpose, and Applicability

3.1 What is the CCFS Scheme?

The Company Compliance Fecilitation Scheme (CCFS) Scheme 2026 (hereinafter referred to as the “Scheme”) is an administrative scheme introduced to facilitate the regularization of past defaults in filing obligations by companies. The Scheme provides a window to companies to file overdue returns and documents with reduced or waived additional fees and penalties, thereby regularizing historical non-compliances.

3.2  What the CCFS Scheme Does NOT Do

Important Clarification on CCFS Scheme 2026

The CCFS Scheme 2026 does NOT grant any additional relaxation or exemption from annual filing requirements specifically for strike off purposes.

The Scheme is an amnesty/regularisation window for past non-compliances – it is not a substitute for, or a relaxation of, the conditions prescribed under Section 248 or Rule 4.

A company that wishes to use the Scheme to clear historical filing defaults before applying for strike off may do so, but this is an optional decision, not a statutory requirement.

3.3When is CCFS Relevant in the Strike Off Context?

The CCFS Scheme may be of practical relevance in the following situations:

• A company that has conducted business for several years and has accumulated filing defaults for those operational years, and now wishes to regularize its records before proceeding with strike off.
• A company that, out of abundant caution or corporate governance considerations, prefers to have a clean filing history before seeking removal of its name.
• A company where the RoC or other regulatory authority has flagged pending filings as a concern during the strike off process.
• Company needs to pay only 2500 ROC fees instead of 10,000.

In none of the above situations, however, is the use of the CCFS Scheme legally mandated. Its use remains at the discretion of the company and its professional advisors.

4. Practical Guidance for Professionals

4.1 Determining the Cut-Off for Annual Filings

The single most important determination to be made before proceeding with a strike off application is the identification of the last financial year in which the company carried on business or operations. This cut-off year defines the extent of the annual filing obligation.

The following approach is recommended:

• Conduct a thorough review of bank statements, invoices, contracts, and board resolutions to determine the date of cessation of business.
• Identify the last financial year (ending March 31) in which any transaction, operation, or business activity took place.
• Ensure that all statutory filings – AOC-4, MGT-7/MGT-7A, and DIR-3 KYC – are complete and up to date for that year and all preceding operational years.
• For years subsequent to the last operational year, no further annual filings are required as a pre-condition to strike off.

4.2 Declaration and Disclosure Obligations

Even where annual filings are not required for inactive years, the application for strike off must accurately reflect the company’s history and status. The declaration furnished by the directors under Rule 4 must truthfully capture:

• The exact date or approximate period from which the company ceased operations.
• Confirmation that no business, revenue, or transactions occurred during the inactive period.
• Particulars of any pending litigation, regulatory action, or inquiry, if any.

Any misrepresentation or concealment in the declaration is a serious legal offence under the Companies Act, 2013 and may expose the directors to personal liability.

4.3 Checklist Before Filing Form STK-2

√ All annual filings (AOC-4, MGT-7/MGT-7A) completed up to and including the last operational financial year.

√ DIR-3 KYC compliance updated for all directors.

√ No pending liabilities including statutory dues, tax arrears, PF/ESI dues, or creditor obligations.

√ Current bank account(s) of the company closed before or at the time of application.

√ Statement of Accounts prepared within 30 days of filing, certified by a Chartered Accountant.

√ Indemnity bond and affidavit from all directors and members in the prescribed format.

√ Board Resolution and Member consent (special resolution) obtained.

√ Declaration of non-operation accurately completed and verified against company records.

√ No pending regulatory inquiries, inspections, or ROC show-cause notices outstanding.

√GST registration (if any) surrendered and cancellation order obtained prior to filing.

5. Common Misconceptions – Addressed

6. Conclusion

The legal position in relation to annual filings and strike off under the Companies Act, 2013 is clear and unambiguous. A company is not required to complete annual filings for years during which no business or operations were carried out, for the purpose of applying for voluntary strike off under Section 248. This exemption from filing obligation for inactive years is intrinsic to the statutory scheme itself and does not require any external scheme or special dispensation.

The CCFS Scheme 2026, while a useful mechanism for companies wishing to regularize historical non-compliances, does not create any new rights, obligations, or relaxations in the context of strike off applications. Its relevance to the strike off process is limited to the discretionary choice of a company to use the Scheme to clean up its filing history before applying under Form STK-2.

Professionals advising clients on strike off must therefore focus their efforts on: accurately identifying the last operational year, ensuring complete filings for that period, confirming extinguishment of all liabilities, and ensuring the integrity and accuracy of the declaration filed with the Registrar of Companies.

Professional Note – Summary of Action Points

✔  Identify the last financial year of business activity – this is the cut-off for mandatory filings.

✔  Ensure AOC-4 and MGT-7/MGT-7A are filed for all operational years up to and including the cut-off.

✔  Confirm complete extinguishment of all liabilities – tax, statutory, and commercial.

✔  Obtain an accurate Statement of Accounts certified within 30 days of filing STK-2.

✔  Close all bank accounts and obtain confirmation before filing.

✔  File Form STK-2 with accurate declarations of non-operation – misrepresentation carries serious consequences.

✔  Use CCFS Scheme only if you wish to regularize historical defaults – it is not a mandatory pre-condition.

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Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at csdiveshgoyal@gmail.com).