Strike-off of Companies under Section 248 of Companies Act, 2013

 

Strike-off of Companies

From the Register of Registrar of Companies under the Companies Act, 2013

Meaning of Strike-off:- “Strike-off” implies removal of name of Company by Registrar of Companies (ROC) from the ‘Register of Companies’. Striking-off is a kind of dissolution process.

Striking off of company simply means closing of a defunct company, in fast way. It is simplest way to close a company.

Ground on which ROC can issue the Notice of Strike-off under Section 248(1):

Section 248 provides that in case the Registrar has reasonable grounds to believe that-

ü  A Company has failed to commence its business within one year of its incorporation or

ü  A Company is not carrying on any business or operation for the 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

ü  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 180 days of its incorporation. [Section 10A(1)]

ü  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 shall send a notice in form STK-1 to the all directors of the Company, of his intension to remove the name of the Company from the register of Companies and request them to send their representations within 30 days from the date of notice.

Voluntary strike-off [u/s 248(2)]:

The company can file an application in E-form STK-2 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, to the Registrar for removing the name of the Company on all or any of the following grounds:

ü  A company has failed to commence its business within one year of incorporation;

ü  The company is not carrying out any business or Activity for preceding 2 financial years and has not sought the status of Dormant Company under Section 455 of the Act.

The form STK-2 shall be certified by PCS, PCA or PCMA as the case may be.

Process of Striking –off u/s 248(2):

Process followed by Company for Strike off by Company by its own under Section 248(2) of the Companies Act 2013.

1.    To Conduct the Board Meeting

2.    Extinguishment of all the Liabilities

3.    Holding of General Meeting or written consent of 75% members

4.    Approval of Concern Authorities

5.    Application to ROC by Company (In e-form STK-2)

 

Documents need to be attached with E-Form STK-2: Rule 4 of Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016,

Following documents need to be attached with form STK-2:

ü  Form STK-3 (An Indemnity bond by every director)

ü  Form STK-4 (An affidavit by every director)

ü  A Statement of Account regarding Assents & Liabilities made up to a date not more than 30 days before the date of application certified by PCA.

ü  A Copy of Special Resolution or Consent letter (Consented by 75% of members in terms of paid up share capital.

ü  A statement of pending litigation

 

Key notes: Dear stakeholders following points should be kept in the mind while you are going to file form STK-2 with ROC u/s 248(2) of the Companies Act, 2013.

ü  Before 10th May 2019, there is no requirement of filing overdue returns in Form No. AOC-4 (Financial Statement) or AOC-4 XBRL, as the case, as may be, and Form No. MGT-7 (Annual Return), till the end of the financial year in which the company ceased or stopped to carry its business operations.

 

ü  As per the amendment made by the Ministry of Corporate Affairs (MCA), with effect from 10th May 2019 the Form.No.STK-2 application for striking off the name of the shall be allowed to be filed only if the company has filed Form No. AOC-4 (Financial Statement) or AOC-4 XBRL, as the case, as may be, and Form No. MGT-7 (Annual Return), till the end of the financial year in which the company ceased or stopped to carry its business operations.

 

Restrictions on making application under section 248 in certain situations (Section 249):

No application can be made u/s 248(2) during the preceding 3 months-   

·         Name Changed

·         Registered office shifted from one state to another state

·         Property of the Company disposed off

·         Company is being wound up

·         Application made to the NCLT for sanctioning the scheme of Compromise & Arrangement but not finally concluded

 

Non Applicability of Section 248(1) : Rule 3 of Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016,

ü  Listed Companies;

ü  Companies that have been delisted compulsory;

ü  Companies Registered under Section 25 of Companies Act, 1956

ü  Companies Registered under Section 8 of Companies Act, 2013

ü  Vanishing Companies

ü  Companies for which an order issued by registrar u/s 234 of the Companies Act, 2013

ü  Companies against which prosecution for a non-compoundable offence is pending in court;

ü  Satisfaction of Charges pending;

ü  Companies that have accepted public deposits which are outstanding or that are in default in repayment of the same;

ü  Companies where inspections or investigations are underway or are yet to be carried out or prosecutions pending in the court;

Author:- Author of this Article is CS Vinay Pandey

About CS Vinay Pandey:-  CS Vinay Pandey is Associate Member of Institute of Company Secretaries of India and Law Graduate from VBSPU, Jaunpur.  He is Co-Founder of Professional Study Point and faculty of Financial Management Paper of CS Professional Programme.

CS Vinay Pandey

(Company Secretary & Writer)

(CS, LLB, B.Com)

cs.vinaypandey@gmail.com  

Mob/Whatsapp: 9911473074

 

Disclaimer: The content of this article is intended to provide a general guide to the subject matter and that the same shall not be treated as legal advice. For any queries, the author can be reached at cs.vinaypandey@gmail.com