Strike off of Company under Section 248 of Companies Act, 2013
As the Company take birth, it may die also. The Company which are incorporated under Companies Act can also apply for Strike off its name. “Strike off” means the temporary closure of the Company and remove the name of the Company from the Register of the Companies. The Company can be strike off by two mode – strike off by Registrar of Companies and Strike off by Company itself on filing of application. There are many grounds on which Company can be struck off by Registrar of the Companies by giving Notice to the Company. On the other way, if Company itself wants to strike off then it can do. Here we will study the procedure for strike off the Company.
METHODS OF STRIKE OFF OF COMPANIES
There are two methods of Strike off the name of the Company
GROUNDS OF STRIKE OFF THE COMPANY
The following are the four grounds of the Strike off the name of the Company:
- Company has not commenced its business within one year of incorporation;
- Company is not engaging in operations from last two Financial Years and the application for status of Dormant Company has not made;
- Declaration for receiving of subscription money has not been filed due to non receiving of the amount from subscribers;
- It is revealed under inspection that the Company is not carrying any business.
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STRIKE OFF BY REGISTRAR UNDER SECTION 248(1) OF THE COMPANIES ACT, 2013
- The registrar has power to initiate the process of strike off the name of the Company by giving Notice in STK-1 from the Register of the Companies under the above mentioned grounds.
- The ROC will publish the Notice of Strike off in Official Gazette in STK-5 for comments of public.
- If the ROC has not received any objection then ROC strike off the name of Company and shall publish in the Official Gazette in STK-7.
STRIKE OFF BY COMPANY UNDER SECTION 248(2) OF THE COMPANIES ACT, 2013
The Company can also made application in STK-2 signed by authorised Director under any of the above mentioned grounds for strike off the name of the Company by adopting following procedure.
- Holding of Board Meeting
The Company needs to hold the Board Meeting for consider the matter of the strike off the name of the Company by passing resolution and further recommend the same to the Members of the Company for their approval .
- Shareholders Meeting or their consent
The Board can take the approval of the Members of the Company by the means of passing Special Resolution or by taking written consent of Seventy-Five percent of Members of the Company in terms of paid up share Capital.
- Conditions before making application
- Provision made for extinguishment of its Liabilities and dues
- Filing of all overdue Financial Statements and Annual Returns
- Permission from regulatory Body if any
- Liabilities of every officer of management and of every Member remain continue after winding up.
- Making application to ROC alongwith required documents
- Application in STK-2
- Indemnity Bond by every Director in STK-3
- Affidavit by every Director in STK-4
- Statement of Account duly certified by Chartered Accountant in STK-8
- Copy of special Resolution or consent of Seventy-Five percent of Members of the Company in terms of paid up share Capital
- Statement of pending Litigation, if any
- No Objection Certificate from appropriate regulatory authority, if any
- Publication of Notice by ROC and Strike off the Name of Company in Official Gazette
The ROC will publish the Notice of Strike off in Official Gazette in STK-6 for comments of public. If the ROC has not received any objection then ROC strike off the name of Company and shall publish in the Official Gazette in STK-7 and also placed on the website of Ministry of Corporate Affairs. The Company shall stands dissolved from date of publication.
- Cancellation of Certificate of Incorporation
Certificate of Incorporation of the Company deemed to be cancelled from the date of publication of the name of the Company as Strike off in Official Gazette.
CATEGORY COMPANIES CANNOT BE STRUCK OFF BY ROC ON SOU-MOTU BASIS
- Listed Companies
- Delisted Company
- Vanishing Company
- Companies under inspection and investigation
- Notice by registrar under section 234 of Companies Act, 1956 or section 206 or section 207 of the Act
- Prosecution of offence is pending in court
- Application for compounding of offence is pending
- Company made default in payment of deposit
- Charges are pending for satisfaction
- Licensed Companies (u/s 8 of Companies Act, 2013 or u/s 25 of Companies Act, 1956)
RESTRICTION ON MAKING APPLICATIONS FOR STRIKE OFF
The Company cannot made application for strike off the name of the Company within the three months of the following activities.
- Change the name of the Company
- Change the registered office of the Company from one state to another
- Disposal for value of property or rights before cessation of trade
- Involved in any other activities except the ground of application
- Application for Compromise and arrangement is pending
- Company being wound up