Company strike off under Companies Amendment Rules 2019

Ministry of Corporate affairs initiated nowadays new compliances for the companies and directors by introducing them like Director KYC, Registered office KYC, etc.

For all those companies who unable to do their companies past compliances for the Annual filing and after deciding to strike off the name of its companies but due to non-compliances they facing the late fees also according to 100 Rs. per day, when the Ministry of Corporate affairs aware of this hardship they have introduced the Companies (Removal of Names of Companies from the Register of Companies) Amendment Rules, 2019 which was effective from 10 May 2019.

After introducing the above Rules there is still an ambiguity in the general public that whether before filing an application for striking off the name of the Company under section 248 of the companies Act, 2013, the company is required to complete its Annual filing and all compliances related to a company or not.

Methods of Company Strike off under companies Act, 2013

As per the Companies Act, 2013, a company can be strike off in the following mentioned two ways:

1. Under section 248 (1) of the companies act, 2013 by Registrar of Companies (ROC)
2. under Section 248(2) of the Companies Act 2013 by voluntary winding up by the company.

Grounds of Strike off

 (i) A company within one year of its date of incorporation does not commence its business, or

(ii) A company within a period of preceding 2 financial years unable to carry on its business activities and within such period fails to make an application for obtaining the status of a dormant.

Compulsory removal of name (Strike off by registrar of companies (ROC)

The Registrar may send the notice to the company and all the directors of the company in Form STK-1 that to remove the name of the company from the register and records and within 30 days from the date of notice request to send its authorized person along with all the supporting documents under Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016, if the abovementioned grounds fulfilled.

Voluntary removal of the name (Strike off by company)

When the company voluntary wants to remove the name of the company from the records company file an application in E-form STK-2 with ROC suo-motto after paying off all its liabilities, bypassing SR (special resolution) or with the consent of 75% of the members as per paid-up share capital of the company, to the ROC to strike off the name from the records.

Procedure for strike off under section 248(2) of the companies act, 2013

1. To conduct the Board meeting

The Company bypassing the BR (Board Resolution) will conduct Board Meeting to strike off the name of the company and any director of the Company can be authorized to apply to the Registrar of companies for application for strike off of the company.

2. To Pay off all the liabilities

After conducting the Board resolution if any liabilities exist in the company then the company will pay off all the liabilities before strike off process.

3. To conduct the Annual General Meeting/ Extraordinary General Meeting

A special resolution to be passed in the general meeting to obtain the approval of the members. As an obligatory requirement either 75% of members have consented to the proposal or a Special resolution has been passed. Then for filing the application either attach consent letter or SRN of MGT-14 filed as the case may be.

4. Concern Authorities approval

If in the company there is any regulatory authority, then the approval is required of such authority.

5. Documents file by the company while making application to ROC

Strike off an application to be filed by the Company in e-form STK- 2 with the mandatory documents:

1. Duly stamp, sign and notarized Indemnity Bond by every director under Form STK 3;

2. Our Government has provided a format for under STK-8 containing company assets and liabilities made up for a day, not more than 30 days before the date of application and duly certified and stamp by a professionals;

3. Duly stamp, sign and notarized affidavit by every director under Form STK 4 of the company;

4. Pan card of the company and ID and address proof of all director and shareholders with proper sign and certified by the professionals

5. A statement with respect to any pending litigations, involving the Company.

6. Duly passed Board Resolution along with the notices and explanatory statement.

7. Bank closure certificate.

8. Proper Balance sheet in which assets and liabilities should be properly extinguished.

Important Note

1. Before filing an application of strike off, all the compliances related to the company and directors should be fulfilled including annual filling of the company, KYC of all the directors, INC 20A.

2. Further if the company does not make any transaction and not open the company current account till date, then the registrar will give the approval or approves the form without filling annual compliance and company can make the application to strike off the company name.

3. For making Application for strike off with ROC few things to be considered. Firstly all the statutory returns are duly filed and if no returns are filed then make sure that there has been no working or transaction is done in the company. Secondly, the company has no bank account in operation to date and if there is a bank account he it should be closed before filing the strike-off application.

Procedure followed by Registrar (ROC) after make an application to the ROC

1. Public notice under STK-6 published by the ROC, if there is any objection raised on proposed strike off shall be sent within thirty days.

2. The notice will be published in the Official Gazette in an English newspaper and in one local newspaper where company registered office established and placed on the website of MCA.

3. Registrar at the same time give the intimation to the concerned sectoral regulators who 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 striking off the company name and seek objections if any.

4. After fulfill all the process of strike off, registrar shall strike off or dissolve the company name by sending notice under form STK-7 in the official Gazette.

5. After publication of notice in the Official Gazette, the Company will strike off from the date mentioned therein and the same shall be shown on the company master data placed on the website of MCA.

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