Striking off a Company is Now Not a Lengthy Process

CS Mohit Saluja

As and when any person goes for starting any business, a question arise in his mind what form of business is to start i.e. whether sole proprietor ship, partnership or a company. Those who want to save themselves from legal obligations of the ROC, MCA or CLB opt for either sole proprietorship or partnership. Need for company formation arise mainly when the person choose Limited Company form of Business. But after formation of company for one or the other reasons or because of Legal Formalities, they not been able to carry over that company for a long time or may it be happened that a company had been incorporated but the business plan fails and directors never care about the company and does not go for filing of annual returns and Balance Sheets as per the provisions of the Act but the status of company remains as Active in the Register of Companies. And such status creates the problem for the Directors of the Company, when the Registrar of Companies send them the notice under Sec 159 or 220 regarding non-filing of Annual Returns or Balance Sheet with the concerned Registrar of companies. And in absence of filing such returns or not giving the replies, Sec 610B apply over the Directors which result in heavy punishments to the Directors may be in form of heavy fines.

Because of such types of notices, one question which comes in the mind of the Directors to wind up the company. But the winding up of the company on one hand takes a lot time to wind up completely and needs a heavy expenditure on the other hand, then the question arise in Director’s mind what should be done so that he should be saved from the further filing of Returns or from the other formalities in regard to company. So the answer is to struck off the company under section 560 for which a no. of formalities are required to be followed by the company through which the company can be struck off. If the Director follow such procedure and complete all such formalities in this regard, then he can be saved from the legal obligations in respect of companies and further filing of returns, once the documents submitted by the company approved by the concerned Registrar of the Companies

The Various documents (and formalities) to be submitted with concerned Registrar of Companies with regard to Struck off the Company u/s. 560 are:

1. The company must have filed all the annual return and balance sheets till date i.e. the date on which the company is going to struck off from the Registrar of Companies, the balance sheet and Annual Returns must have been filed till such date.
2. Nil Balance Sheet.
3. A certificate from a Chartered Accountant.
4. Neither Fixed Assets nor any Bank Loan should stand in name of the Company.
5. Duly Notarised the Affidavit and Bond by all the Directors of Company
6. The last filed acknowledgement of Income Tax the photocopy of Pan Card, ID Proof and Residential Proof duly Notarised

After having all the above documents complete in all respect, the documents are required to be filed with the concerned Registrar of Company and when the concerned Registrar approve such Form, the company will come in to the process of Struck off and will be struck off from The Registrar of Companies within a time gap of 6-9 months.

Striking-off by Registrar of his own motion:- In spite of the above procedure, the company may also be struck off, If the Registrar of Company has reasonable cause to believe that a company is not carrying on business or is not in operation and   finds that the company has not filed the documents for more than 3 Years, in such case the Registrar of Company may by using his powers struck off the company after sending the appropriate notices to the Company.

To conclude, I would like to say that the company striking off is now a days not a lengthy process as compared to the few years back. Now, if you have all the documents available, the company will come into the process of striking off within a month or two after filing such documents and the directors can be saved from the further filing of returns and the legal formalities once it come under the process

Note: The views expressed herein are personal view of author.

Mohit Saluja, Practicing Company Secretary, 9914558709

csmohitsaluja@gmail.com