Strike-off Or Removal Of Name Of The Company From The Register Of Companies (RoC)
March 10, 2017
I. INTRODUCTION A company which does not intend to carry on its operations can apply for removal of its name to the Ministry of Corporate Affairs or the Registrar of Companies can remove or strike off a Company name, if it has reasonable cause to believe so. Striking off of the company’s name by the Register of Companies (RoC) is an alternative to winding up of company. II. REMOVAL OF NAME OF THE COMPANY BY REGISTRAR Pursuant to Section 248(1) of the Companies Act, 2013 the Registrar of Companies can on suo motu basis remove the name of the Company on the following grounds:
- 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.
- The Registrar shall give a notice in writing in Form STK 1 which shall be sent to all the directors of the company at the addresses available on record, by registered post with acknowledgement due or by speed post.
- The notice shall contain the reasons due to which the name of the company is to be removed from the register of companies and shall seek representations, if any, against the proposed action, from the company and its Directors along with the copies of relevant documents, if any, within a period of thirty days from the date of the notice
- A notice issued under sub-section (1) or sub-section (2) of Section 248 shall be published in the prescribed manner (Form STK-5 and Form STK-6) and also in the Official Gazette for the information of the general public.
- At the expiry of the time mentioned in the notice, the Registrar may, unless cause to the contrary is shown by the company, strike off its name from the register of companies, and shall publish notice thereof in the Official Gazette, and on the publication in the Official Gazette of this notice, the company shall stand dissolved
- The Registrar, before passing an order under sub-section (5), shall satisfy himself that sufficient provision has been made for the realization of all amount due to the company and for the payment or discharge of its liabilities and obligations by the company within a reasonable time and, if necessary, obtain necessary undertakings from the managing director, director or other persons in charge of the management of the company:
- Listed companies;
- Companies that have been delisted due to non-compliance of listing regulations or listing agreement or any other statutory laws
- Vanishing companies;
- 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 Companies Act, 2013.
- The application in the Form STK-2 shall be signed by a director duly authorized by the board in their behalf.
- If Directors do not have Digital Signature:A physical copy of the form duly filled in shall be signed manually by the director duly authorized 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 Company Secretary/Chartered Accountant/Cost Accountant in Whole time Practice.
- Indemnity Bond duly notarised by every director in form STK-3
- Statement of Accounts contains all the assets and liabilities, made up to a day, not more than 30 days before the date of application and certified by Chartered Accountant
- Affidavit by every director of the company in form STK -4
- Copy of special resolution duly certified by each of the Directors of the Company or consent of 75% 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.
- An application under sub-section (2) of section 248 on behalf of a company shall not be made if, at any time in the previous three months, the company—
- Has changed its name or shifted its registered office from one State to another;
- Has made a disposal for value of property or rights held by it, immediately before ceasing the 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
- If a company files an application under sub-section (2) of section 248 in violation of sub-section (1) of Section 249, it shall be punishable with fine which may extend to one lakh rupees.
- An application filed under sub-section (2) of section 248 shall be withdrawn by the company or rejected by the Registrar as soon as conditions under sub-section (1) of Section 249 are brought to his notice.