Strike off company / Company name removal from Register of Companies, is a very crucial decision in the life cycle of the company, when it become cumbersome or become a liability in its functioning, Company in India can be strike off by two ways. one by Registrar of Companies and other by company itself voluntarily by a special resolution. Strike off by Registrar of Companies is not in control of company but voluntary strike off after fulfillment of certain conditions, company can take advantage of off load the non-functional companies. So we will concentrate more on 2nd option i.e. voluntary strike off company by company itself.
As per sub section (2) of section 248, 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 to the Registrar for removal of company name from the register of companies on all or any of the grounds specified in sub-section (1) of section 248 and the Registrar shall, on receipt of such application, cause a public notice to be issued. In the case of a company regulated under a special Act, approval of the regulatory body constituted or established under that Act shall also be obtained and enclosed with the application. Nothing in sub-section (2)shall apply to a company registered under section 8.
Application for Strike Off Company /Company Name Removal from Register
An application for strike off company /company name removal from register of companies, can be made u/s section 248(2) in Form STK-2 along with the fee of Rs. 10,000. No application in Form No. STK-2 shall be filed by a company unless it has filed overdue returns in Form No. AOC-4 (Financial Statement) or AOC-4 XBRL, as the case may be, and Form No. MGT-7 (Annual Return), up to the end of the financial year in which the company ceased to carry its business operations:
In case a company intends to file Form No. STK-2 after the action under sub-section (1) of section 248 has been initiated by the Registrar, it shall file all pending overdue returns in Form No. AOC-4 (Financial Statement) or AOC-4 XBRL, as the case may be, and Form No. MGT-7 (Annual Return) before filing Form No. STK-2: Once notice in Form No. STK-7 has been issued by the Registrar pursuant to the action initiated under sub-section (1) of section 248, a company shall not be allowed to file an application in Form No. STK-2
Every application shall accompany a no objection certificate from appropriate Regulatory Authority concerned in respect of following companies, namely –
- companies which have conducted or conducting non-banking financial and investment activities as referred to in the Reserve Bank of India Act, 1934 or rules and regulations thereunder;
- housing finance companies as referred to in the Housing Finance Companies (National Housing Bank) Directions, 2010 issued under the National Housing Bank Act, 1987;
- insurance companies as referred to in the Insurance Act, 1938 or rules and regulations thereunder;
- companies in the business of capital market intermediaries as referred to in the Securities and Exchange Board of India Act, 1992 or rules and regulations thereunder;
- companies engaged in collective investment schemes as referred to in the Securities and Exchange Board of India Act, 1992 or rules and regulations thereunder;
- asset management companies as referred to in the Securities and Exchange Board of India Act, 1992 or rules and regulations thereunder;
- any other company which is regulated under any other law for the time being in force.
Documents Required for Strike Off of Company /Company Name Removal from Register
The application in Form STK 2 shall be accompanied by –
- indemnity bond duly notarised by every director in Form STK 3;
- a statement of accounts in Form No. STK-8 containing assets and liabilities of the company made up to a day, not more than thirty 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 per cent of the members of the company in terms of paid up share capital as on the date of application;
- a statement regarding pending litigations, if any, involving the company.
Note: If the person is a foreign national or non-resident Indian, the indemnity bond, and declaration shall be notarised or appostilised or consularised.
Manner of Application Filing for Strike Off the Company /Company Name Removal from Register
The application in Form STK 2 shall be signed by a director duly authorised by the Board in their behalf.
Where the director concerned does not have a registered digital signature certificate, a physical copy of the form duly filled in shall be signed manually by the director duly authorised in that behalf and shall be attached with the Form STK 2 while uploading the form.
The Form STK 2 shall be certified by a Chartered Accountant in whole time practice or Company Secretary in whole time Practice or Cost Accountant in whole time practice, as the case may be.
- placed on the official website of the Ministry of Corporate Affairs on a separate link established on such website in this regard;
- published in the Official Gazette;
- published in English language in a leading English newspaper and at least once in vernacular language in a leading vernacular language newspaper, both having wide circulation in the State in which the registered office of the company is situated.
In case of any application made under sub-section (2) of section 248 of the Act, the company shall also place the application on its website, if any, till the disposal of the application.
Notice of Striking Off and Dissolution of Company
The Registrar shall cause a notice under subsection (5) of section 248 of striking off the name of the company from the register of companies and its dissolution to be published in the Official Gazette in Form STK 7 and the same shall also be placed on the official website of the Ministry of Corporate Affairs.
Grounds for Strike Off Company /Company Name Removal from Register by Registrar of Companies
As per sub section (1) of section 248, where the Registrar has reasonable cause to believe that—
- 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 or he 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 notice.
- the subscribers to the memorandum have not paid the subscription 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 one hundred and eighty days of its incorporation under sub section (1) of section 10A; or
- 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.
he 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 notice.