Strike Off Procedure under Companies Act, 2013

Notified from: 26^th December 2016

Applicability: Applicable to both public & private companies. However, Section 248(2) is not applicable to section 8 companies.

Strike off grounds:

Sec 248 of Companies Act, 2013 deals with the provisions of strike off the name of company from register of companies. This section provides for two grounds for strike off. It says that a Company can be struck off if ROC is satisfied on the following two grounds:

1. The Company has failed to commence its business within one year from its incorporation Or

2. The Company is not carrying on any business or operation for period of immediately preceding two financial years and has not made any application for obtaining status of dormant company.

Methods of strike off:

1. by ROC – taking a suo moto action

2. by company – making an application to strike off in form STK – 2 to ROC

Strike off by ROC – taking a suo moto action:

If ROC has reasonable belief that a company has satisfied the criteria u/s 248(1) mentioned above, ROC will send notice of his intention to remove name of the company from register of companies, to the concerned company and all its directors and request them to send their representations and relevant documents within the period of 30 days.

Strike off by company – making an application to strike off in form STK – 2 to ROC:

Procedure to be followed by a company in case of strike off application:

1. Hold a Board Meeting to decide on the matters of strike off, extinguishing all liabilities of company and calling of EGM to pass a special resolution for strike off. (Alternatively company can obtained written consent of 75% shareholders in terms of paid up capital in which case there is no need to call EGM)

2. Send notice of EGM

3. Hold the EGM, pass a special resolution and file e-form MGT-14 with ROC within 30 days of passing of such resolution.

4. Make an application of Strike off in Form STK – 2 to ROC

Documents to be submitted with strike off application in Form STK – 2:

(i) Indemnity bond duly notarised by every director in Form STK 3;

(ii) 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;

(iii) An affidavit in Form STK 4 by every director of the company;

(iv) 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;

(v) A statement regarding pending litigations, if any, involving the company.

In case the company is regulated under the special Act then approval of the concerned regulatory body shall also be obtained and annexed with the application of strike off.

Company is required to place application of Strike off on website of company if any.

Steps by ROC :

The ROC may, in case of its suo moto action to strike off u/s 248(1) or on receipt of strike off application u/s 248(2), causes a public notice to be issued in the prescribed manner.

1. The notice shall be in the Form of STK 5 or STK 6 and be:

• Placed of website of MCA
• Published in official gazette
• Published in newspaper in English and vernacular language both having wide circulation in the state where registered office of the company is situated

2. ROC shall simultaneously intimate the concerned regulatory authorities viz. income tax etc. about the proposed action of strike off and seek the objections if any, to be furnished within the period of 30 days from the date of such intimation.

3. ROC may on expiry of the period mentioned in the notice, pass an order of striking off the name of company from register of companies and publish a notice thereof in official gazette. On publication of such notice in official gazette company shall stand dissolved.

Chart view of Section 248 of Companies Act, 2013

For any query / information / suggestion, please write at niveditapcs.ngp@gmail.com

(Nivedita Nikam- Practicing Company Secretary)