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Introduction: Strike-off of company from registrar of companies is an opportunity given to defunct companies or those who wants to voluntarily shut down their company can file their application with roc under section 248. This is one of the best and easiest way where companies can struck off its name without any hassle by properly arranging all the required documents as per the law.

E-Form STK-2 is required to be filed with registrar of companies under section 248(2) of the companies act, 2013.
The company can go for strike off voluntarily by filing an applicationto roc or on the notice of closure of company received from roc.

Applicable Section& Rules [Section 248 to 252]
Section 248  Striking off the name of the Company by the Registrar

• Section 248(1) Deals with Compulsory Strike-off by the Registrar
• Section 248 (2) Deals with the Voluntary Strike-off by the Company

Section 249 to 252  Restrictions and Appeal to tribunal
The above mentioned Sections must be read with The Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016

Date of Applicability of Section:
Ministry of Corporate Affairs (MCA) issued a Notification dated 26th December, 2016 notifying Section 248, 249, 250, 251 and 252 of Companies Act, 2013 (Chapter XVIII).

Reason for Strike off of Companies

• According to Section 248, if a company has failed to commence its business within one year of its incorporation or
• A 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.

Notice for removal of name by the Registrar of Companies[Section 248(1)]
The registrar if having a reasonable cause as mentioned above may send notice to the company and all the directors of the company, of his intention to remove the name of the company from the roc and requesting them to submit their representations along with supporting documents within thirty days from the date of notice. This process can also be called as Compulsory removal of name from registrar of companies.

Suo-motto Application by the Company for Striking off [Section 248(2)]

The company can file an application with Registrar of Companies suo-motto after extinguishing all its liabilities, by special resolution or with the consent of seventy five percent of the members in terms of paid up share capital, file an application in form STK-2 to the Registrar for removing the name of the Company.

Restrictions on making application for strike off

The companies making an application voluntarily with respect to provision as mentioned in section 248(2) of the companies act,2013 be restricted if, at any time in the previous three months, the company-

• Has Changed its name or
• Has Shifted its registered office from one State to another;
• has made a disposal for value of property or rights held by it, immediately before cesser of trade or otherwise carrying on of business, for the purpose of disposal for gain in the normal course of trading or otherwise carrying on of business;
• has engaged in any other activity except the one which is necessary or expedient for the purpose of making an application under that section, or deciding whether to do so or concluding the affairs of the company, or complying with any statutory requirement;
• has made an application to the Tribunal for the sanctioning of a Compromise Or Arrangement and the matter has not been finally concluded; or
• is being wound up under Chapter XX, whether voluntarily or by the Tribunal or under the IBC,2016.

Restriction on Companies not allowed to file Strike off application

• Listed companies.
• Companies that have been delisted due to non-compliance of listing regulations or listing agreement or any other statutory laws,
• vanishing companies (A "vanishing company" means a company, registered under the Act or previous company law or any other law for the time being in force and listed with Stock Exchange which has failed to file its returns with the Registrar of Companies and Stock Exchange for a consecutive period of two years, and is not maintaining its registered office at the address notified with the Registrar of Companies or Stock Exchange and none of its directors are traceable);
• Companies where inspection or investigation is ordered and being carried out or actions on such order are yet to be taken up or were completed but prosecutions arising out of such inspection or investigation are pending in the Court;
• Companies where notices under section 234 of the Companies Act, 1956 (1 of 1956) or section 206 or section 207 of the Act have been issued by the Registrar or Inspector and reply thereto is pending or report under section 208 has not yet been submitted or follow up of instructions on report under section 208 is pending or where any prosecution arising out of such inquiry or scrutiny, if any, is pending with the Court;
• Companies against which any prosecution for an offence is pending in any court;
• Companies whose application for compounding is pending before the competent authority for compounding the offences committed by the company or any of its officers in default;
• Companies, which have accepted public deposits which are either outstanding or the company is in default in repayment of the same;
• Companies having charges which are pending for satisfaction, and Companies registered under section 25 of the Companies Act, 1956 or section 8 of the Act.
  

Companies required to take No Objection Certificate from other regulatory authorities

The Company filing a strike off application and is governed by other regulatory bodies also, are required to take no objection certificate from appropriate Regulatory Authority concerned Further, the ROCs will not be able to remove the name of the such companies covered under Rule 4 of Companies (Removal of name of the Companies from Register of Companies) Rules, 2016 until and unless No objection certificate is received from proper regulatory bodies which includes the following companies:

• Companies which have conducted or conducting non-banking financial and investment activities as referred to in the Reserve Bank of India Act, 1934 (2 of 1934) or rules and regulations there under;
• Housing finance companies as referred to in the Housing Finance Companies (National Housing Bank) Directions, 2010 issued under the National Housing Bank Act, 1987 (53 of 1987);
• iInsurance companies as referred to in the Insurance Act, 1938 (4 of 1938) or rules and regulations there under;
• Companies in the business of capital market intermediaries as referred to in the Securities and Exchange Board of India Act, 1992 (15 of 1992) or rules and regulations there under;
• Companies engaged in collective investment schemes as referred to in the Securities and Exchange Board of India Act, 1992 (15 of 1992) or rules and regulations there under;
• Asset management companies as referred to in the Securities and Exchange Board of India Act, 1992 (15 of 1992) or rules and regulations there under;
• Any other company which is regulated under any other law for the time being in force e.g. Chit Fund Company as these companies are covered under Chit Fund Act, 1882.

List Of Forms Under Strike Off [From Stk 1 To 7]

1. Form STK-1:- The Notice by Registrar for removal of name of a Company from the Register of Companies.
2. Form STK-2:- An Application by Company on suo-motto to Registrar of Companies for removing the name of the company from register of companies.
3. Form STK-3:- An Indemnity bond which needs to be given by every director of the company either individually or collectively while filing STK-2. This is an attachment required while filing form STK-2 under section 248 (2) with ROC.
4. Form STK-4:- An Affidavit which every director needs to give separately while making an strike-off application under section 248(2).
5. Form STK-5 & STK-6:- A Public Notice issued by Registrar Of companies under sub-section (1) or sub-section (2).
6. Form STK-7:- Notice under sub-section (5) of section 248 of striking off and dissolution of company to be published in official gazette and same shall be placed on the official website of the Ministry of Corporate Affairs.

PROCEDURE OF STRIKING OFF THE NAME OF THE COMPANY:

A) The Registrar under Section 248 (1) may send a notice in form STK-1 to: any company and all the directors of the company, which has failed to commence business within 1 year of its incorporation or which 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.

The Notice shall specify the intention of the Registrar to remove the name of the Company requesting them to send their representations alongwith copies of relevant documents within a period of 30 days from the date of the Notice.

• If Board of directors does not reply and file any representation to ROCs within prescribed time limit, then registrar of companies may remove the name of the company from the register of companies and also publish the same on the website if the Ministry of Corporate Affairs.
• If Board of directors file representation with registrar of companies, then in such as case registrar of companies will take it into consideration as a nature justice of opportunity of being heard before strike off the name of the company from register.
• After representation, the company can make an application to ROC for striking off the name of the company from register of companies in eform STK-2 or the company can also decide to take status as dormant company by filing form MSC-1

B) The company under Section 248(2) may file Form STK-2 voluntarily by following procedure:

• The Board Meeting is required to be called for the purpose of passing the resolution relating to strike off of the company and to authorize any director of the company to file application with registrar of companies. Also, approving notice for calling meeting of shareholder of the company containing explanatory statement under Section 102 of said Act. After Passing Board resolution the company is required to extinguish all its liabilities.
• A Chartered Accountant will be engaged for the purpose of preparing the Statement of Accounts and the liabilities of the company will be write off with the assets of the company and same will required to be placed before the management for their approval.
• After Board Meeting, the company is required to circulate notice of the extra-ordinary general meeting to all the shareholders of the company.
• Company will hold EOGM and pass special resolution for striking off the company after taking approval from seventy five percent of the members as per paid up share capital of the company.
• Then, Company is required to file Form MGT-14 with roc within 30 days of passing the special resolution.
• Once the Resolution filed with ROC take affidavit as required in Form STK-3 and Indemnity Bond in STK-4 from the Directors of the Company and Statement of Accounts is also required to be signed by atleast two directors of the company, one of the director shall be Managing Director, if any.
• File application form STK-2 for striking off the name of the company along with aforesaid mentioned documents. Also, attach copy of resolution passed for striking off the company.
• The application will be processed under approval route and take atleast six month unless any objection is raised by concerned ROC.
• Once the form is approved by ROC same will be made available at MCA site and publish in the official gazette and from the date of publication it will stand dissolved
• Moreover, the officer and management of the company will continue to be liable for discharging any liabilities may arise in future against the company as if the company has not be dissolved.

Consequences of Not Complying with the Requirement as mentioned in The Companies Act,2013

If a company fails to comply the requirement of Section 455 of Companies Act, 2013 and Companies (Miscellaneous) Rules, 2014 which talks about filing of Annual Return within 30 Days from the end of financial year the Registrar of Companies will strike off the name of such company from Register.

Moreover, the company and every officer in default who fails to comply with the requirement of the provision and rules under Companies Act, 2013 will be penalized under Section 450 of Companies Act, 2013.

The other provisions are also there for penalizing the company or directors if any default is being came to notice of the Registrar of Companies regarding violation of provisions of The Act.

NOTE:

Many queries are being coming regarding Filing of Annual return before making an application to Registrar of Companies for striking off.

In this situation, it is necessary to do annual filing before making an strike off application. But there are many cases where roc approves such form without annual filing if roc found that no transaction is there and no bank account is under operation till date, then in such case company can make application for strike off.

DISCLAIMER

This article is written with an intention for imparting knowledge on the topic “Striking off the name of the company from Register of Companies by voluntary or Compulsory” and this is not meant for publication. All are requested to have their due diligence before referring the same for an academic or business purpose.

In case of any query, please contact me on below mentioned contact details.

CS Shruti Mittal