How to Strike off company in India?

Striking off means removal of the name of the company from the register of companies which is maintained by the registrar of companies i.e. (ROC). The name can be removed either by the company on its own or it can be removed by ROC. The provisions related to striking off the companies are given under section 248 of the companies act 2013.

The company can be struck off under the following circumstances; When a company has failed to commence its business within one year of its incorporation.

1. The owner can sell the company.
2. Can close down the company by declaring the company ‘Defunct'(Striking of the company).
3. Winding up or dissolving the company.

What does Company Striking off mean? –  It means the removal of the name of the company from the register of companies which is maintained by the registrar of companies i.e. (ROC). The name can be removed either by the company on its own or it can be removed by ROC. The provisions related to striking off the companies are given under section 248 of the companies act 2013.

Strike Off Section 248(1) of Company Act, 2013

Relates with the provisions where the name of the company is removed by ROC from the register of companies

(a)  Where the company has failed to commence any business within a period of 1 year from the date of its incorporation.

(b) company is not carrying on any business or operation for a period of two immediately preceding financial years and has not made any application within such period for obtaining the status of a dormant company under section 455(dormant company). Then ROC shall start the process of removing the name.

ROC shall send a notice to the company and all the directors of the company, of his intention to remove the name of the company from the register of companies and requesting them to send their representations along with copies of the relevant documents, if any, within a period of thirty days from the date of the receiving notice of ROC.

(C) subscribers to the memorandum have not paid the subscription Amount  which they had undertaken to pay at the time of incorporation of a company and a declaration to this effect has not been filed within a period of one hundred and eighty days from the date of its incorporation under sub­section (1) of section 10A; or

(e) The company is not carrying on any business or operations, as revealed after the physical verification carried out under sub-section (9) of section 12.

The registrar if having a reasonable cause as mentioned above may send a notice in Form STK-1 of Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016 to the Company and all the Directors of the company informing his intention to remove the company’s name from the record and request company to send its representations along with supporting documents within thirty days from the date of the notice. This process can also be called Compulsory removal of name from Registrar of Companies.

Strike Off Company Section 248(2)

the company may file a form STK-2on its own to ROC provided that it has extinguished all its liabilities by the way passing S/R or with the consent of 75% of its members in terms of paid-up share capital of the company, request ROC for removing the name of the company from the register of companies.

The following procedure should be followed;-

1. Convene a board meeting

The Company will be required to convene a board meeting for the purpose of removal of the name of the company from the register of companies.

2. Extinguishment of all the Liabilities

After passing of Board resolution the Company will extinguish all the liabilities before making an application.

3. Holding of General Meeting or Obtaining NOC from Members

The Company will hold the general meeting of shareholders by passing a Special Resolution for striking off the name of the Company or it can obtain approval of 75% of members in terms of paid-up share capital of the Company. In case of Special resolution Company will file E-form MGT-14 within 30 days.

Approval of Concerned Authorities

Approval of concerned authorities will be taken if required.

4. Application to ROC by Company

Application in Form STK- 2 to be filed by the Company with a filing fee of INR 10,000 along with the following documents:

•  Indemnity Bond which is duly notarized by every director in Form STK 3;
•  A statement of accounts in Form STK- 8 containing assets and liabilities of the company made up for a day, not more than 30 days before the date of application and certified by a Chartered Accountant;
• An affidavit in Form STK 4 by every director of the company;
• A copy of the special resolution duly certified by each of the directors of the company or consent of seventy-five percent of the members of the company in terms of paid-up share capital as on the date of application;
• In the case of a Company regulated by any other authority, approval of such authority shall also be required;
• A statement with respect to any pending litigations, if any involving the Company.

 5. The process followed by ROC

After receiving an application from the company, ROC shall publish a public notice STK- 6. Any objection to the proposed strike-off shall be sent within 30 days.

The notice shall be placed on the website of the Ministry of Corporate Affairs, published in the Official. Gazette and published in a leading English newspaper and at least in one vernacular newspaper where the registered office of the company is situated.

ROC shall simultaneously intimate the concerned regulatory authorities regulating the company, i.e. the Income-tax authorities, central excise authorities, and service-tax authorities having jurisdiction over the company, about the proposed action of removal or striking off the names of such companies and seek objections if any.

After complying with all the processes, ROC shall strike off the name and dissolve the company by sending a notice in the official gazette in the form STK-7.

On the publication in the Official Gazette of this notice, the Company shall stand dissolved in effect from the date mentioned therein. The same shall also be placed on the official website of the MCA.

Also Read:- What is Form Xbrl

6. Other Provisions

If a company confirms as dissolved, it shall cease to operate as a Company from the date of the dissolution and the Certificate of Incorporation issued. by the ROC to it shall be deemed to have been canceled except for the purpose of realizing the amount due to the company and for the payment or discharge of the legal liabilities or other obligations of the Company.

The Following Forms will be Required at the time of Striking OFF Name of the Company.

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