An alternative mechanism to the Winding up of a Company is striking off the Company.
The Companies Act facilitates two modes of strike-off
-Strike off by the Registrar of Companies (Under Section 248(1) of Companies Act, 2013.
-Strike off by a Company on its own accord under Section 248(2) of Companies Act, 2013.
Grounds on which provision of Strike-off could be enacted (Section 248)
Dormant means inactive or inoperative, a Company is dormant where it has been registered under Companies Act for future project or to hold an assets or intellectual property but isn’t pursuing any significant accounting transactions.
Strike off by ROC:
Strike off on the Company’s accord:
A company may file an application to Registrar of Companies in E-Form STK-2 after closing of its liabilities and passing special resolution, which must be consented by Seventy-five per cent of its members.
Procedure for Strike Off:
1. Hold Board Meeting:
Hold Board Meeting to pass resolution for striking off the name of the Company and appointing any one the director /Company Secretary to apply for the same with the ROC.
2. Clearing of Remaining Liabilities:
Once Board Resolution has been passed, the company shall clear all the remaining liabilities, if any
3. Hold General Meeting
Hold General Meeting and pass a resolution for striking off of the company by taking approval from 75% members as per the paid up share capital of the company.
4. E-form filing
Company shall file E-form MGT-14 within 30 days of such resolution being passed.
Application and documents:
Companies will file an application to the Registrar of Companies in pursuit to strike-off accompanied by the following documents:
Note: Annual filing is necessary before applying for strike off but ROC may approve forms without annual filing if ROC finds there have been no transactions and bank account is not operational.
Non- Qualifying Companies for Strike –off:
Companies which have been listed for inspection or investigation –if such directive is being carried out/pending/completed but prosecutions concerning such inspection or investigation are pending in the court of law.
Restrictions on making Applications for Strike off
Companies are restricted on filling applications for strike-off, if any time during the last three months, it has:
Penalty of Not adhering with the requirement mentioned under Companies Act, 2013
In case of Company:
Where Company fails to abide by the requirement of Section 455 of Companies Act, 2013 and Companies (Miscellaneous) Rules, 2014 which states the provisions of filing of Annual return within 30 days from the end of financial year the ROC will strike off the name of such Company from register.
Also every officer in default and the company who does not comply with the provision and rules under Companies act, 2013 will be reprimanded under Section 450 of Companies Act, 2013.