In this editorial, Author shall discuss about dilemma that Whether a Company can file e-form STK-2 for Strike off before completion of 1 year of Incorporation? in other words. If Company has not started any business since Incorporation and promoters wants to strike off even within 1 year of Incorporation, whether they can file STK-2 for strike off? If Yes, what shall be procedure of the same?

A. GENERAL PROVISION:

i. Section 248(1):

Where the Registrar has reasonable cause to believe that—
(a) a company has failed to commence its business within one year of its incorporation

ii. Section 248(2):

Without prejudice to the provisions of sub-section (1), a company may, after extinguishing all its liabilities, by a special resolution or consent of seventy-five per cent. members in terms of paid-up share capital, file an application in the prescribed manner to the Registrar for removing the name of the company from the register of companies on all or any of the grounds specified in sub-section (1) and the Registrar shall, on receipt of such application, cause a public notice to be issued in the prescribed manner

B. WAYS OF STRIKE OFF:

There are two ways to get Strike off:

i. By Registrar of Companies on Suo-Motto

ii. By Application of Company for removal of name/ Strike off of Company

C. POINT OF ANALYSIS:

There can be following Situations:

i. Company has not started any business since Incorporation.

ii.Company has receipt Subscription Money and files INC 20A. (because without complying this strike off is not allowed)

iii.One year from date of Incorporation not completed. But Promoters want to Strike off the Company.

D. ANALYSIS:

As per extract of Section 248(1), it is mentioned that If ROC is satisfied/ having reasonable cause to believe that “Company has not started its business within one year Incorporation” it may allow strike off to such Company.

In other words, if One year is not completed since incorporation then ROC don’t have power u/s 248(1) to allow strike off to such Company.

Company can go for Strike off only after completion of one year from incorporation with condition that Company must not commenced business since Incorporation.

Conclusion:

After reading above mentioned provisions and situations one can opine that, to get status of Company as Strike off Companies are required to file e-form STK-2 at least after one year from the date of Incorporation.

If Company file form for strike off before completion of One year from date of Strike off, ROC can put the form for resubmission or reject the application.

*****

Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at [email protected]).

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