The Ministry of Corporate Affairs (“MCA”) vide Notification dated 26th December, 2016 notified Sections 248 to 252 of the Companies Act, 2013 (“Act”) dealing with the provision for Removal of Names of Companies from Register of Companies (“ROC”). The provisions relating to strike off provide an opportunity to the non working companies to get their names struck off from the records of the ROC. The MCA had also issued the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016 (“Rules”) to be effective from the same date i.e. 26th December, 2016 in order to provide procedural aspects of striking off.
A company can be struck off by any of the following modes:
(i) Suo moto by the ROC under Section 248(1) of the Act (Strike off by ROC); or
(ii) An application by the company for removal of name/ strike off of company under Section 248(2) of the Act (Srtike off by Company).
A company which is undergoing the process of ‘Striking Off’ either voluntarily or by an action of the ROC is given the status as ‘Striking Off’ and the status of the company is changed to ‘Dissolved’ or ‘Liquidated’ when affairs of the company are completely wound-up by following the provision of winding-up of company. After dissolution or liquidation, the company ceases to exist.
Subject to the provisions of section 248(1) of the Act read with Rule 3 of the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016, in the following cases, the Registrar can suo moto remove the name of the company from the Register:
Before removal of the name of the company from the Register, the ROC is required to send a notice in Form STK 1 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. Such a notice should contain the reasons for which the name of the company is to be removed from the Register of Companies. Such a notice should 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. On receipt of such a notice, the company and all the directors of the company are required to send their representations along with copies of the relevant documents, if any, explaining the reasons as to why the name of the company should not be removed from the Register of Companies. Such representations should be given within a period of thirty days from the date of the notice.
Strike off provisions gives a choice or an option to non working companies to remove its name from the Register of Companies. There are many companies which are registered with ROC but due to various reasons they are not operative. The strike off gives an option to such companies to apply to ROC for removal of their name from the Register of Companies. The procedure of this exit is now governed under section 248(2) of Companies Act, 2013 read with Rule 4 of the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016. This act is a speedy way to close down a company being non–operational over a period of time.
Subject to the provisions of section 248 (2) of companies Act 2013 read with Rule 4 of the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016, the company can on its own file an application for removal of name of company from the Register of companies.
A company through its board of directors, can file an application for removal of name of company from the Register of Companies on the following grounds:
Before making an application to the ROC for removal of the name of the company, the board of directors of the company shall take all the steps necessary in order to extinguish all its liabilities. Approval of the shareholders by way of special resolution or consent of seventy five percent members in terms of paid up share capital is also required to be taken for filing an application to the ROC for the removal of the name of the company from the Register of Companies. 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.
The Company shall not make any application for the strike off of the company, if at any time in the previous 3 months, the company has done any of the below mentioned activities:
An application for striking off the name of the company under Section 248(2) of the Act shall be withdrawn by the company or rejected by the ROC as soon as the above stated conditions are brought to notice. In case of violation of the above provision, the company shall be punishable with fine which may extend to one lakh rupees.
Herein below is the step by step process involved in sriking off of the Company by the Registrar of Companies (ROC):
The ROC is required to send a notice in Form STK 1 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. Such a notice shall contain the reasons on the basis of which the name of the company is to be removed from the Register of Companies. Such a notice should 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.
On receipt of such a notice, the company and all the directors of the company, are required to send their representations along with copies of the relevant documents, if any, explaining the reasons as to why the name of the company should not be removed from the Register of Companies. Such a representation should be given within a period of thirty days from the date of the notice.
The ROC will consider the representation made by the company and all the directors of the company. If the ROC is not satisfied with the representation made by the company and its directors, it may proceed to strike off the name of company.
The notice for removal of the name of the company should be in Form STK 5 for the information of the general public and should be:
Such a publication is required to be given for the information of the general public in order to enable the general public to give their objections, if any, to the proposed removal / striking off of name of the companies from the Register of Companies and requiring them to send their objection to the ROC within thirty days from the date of publication of the notice.
Intimation about the proposed action of removal or striking off the names of company should be sent to the Income-tax authorities, GST authorities having jurisdiction over such a company. Such intimation should be given to enable the authorities to give their objections, if any. Such objections are required to be given within a period of thirty days from the date of issue of the letter of intimation.
After expiry of thirty days from the date of issue of the letter of intimation, if there are no objections received within thirty days from the general public or respective authority and unless cause to the contrary is shown by the company, the ROC can proceed to strike off or remove the name of the company from the Register of Companies.
The ROC before passing an order for Striking off / Removal of the name of the company should satisfy himself that sufficient provision has been made for realisation 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. The ROC can obtain necessary undertakings from the managing director, director or other persons in charge of the management of the company. Notwithstanding the undertakings, the assets of the company shall be made available for the payment or discharge of all its liabilities and obligations even after the date of the order removing the name of the company from the Register of Companies.
After the expiry of the time mentioned in the notice, the ROC can strike off the name of the company from the Register. The notice of striking off the name of the company from the Register of Companies and its dissolution should be published in the Official Gazette in Form STK 7 and the same should also be placed on the official website of the Ministry of Corporate Affairs. The company shall stand dissolved on the publication of this notice in the Official Gazette.
The board of directors of the company shall follow the following procedure for removal of name of the company from the Register of Companies maintained by the ROC. Herein below is the step by step process involved in sriking off by the Company:
Call and hold Board Meeting to pass Board resolution for the purpose of striking off of the name of the company from the Register maintained by the ROC, subject to the approval of the shareholders of the company, and to authorize any director to file an application and for fixing date, time and venue for the Extraordinary General Meeting of the shareholder.
After passing of Board resolution, if there is any liability in the company, the company will set off / pay all its liabilities.
Every director of the company should sign and execute indemnity bond duly notarised by every director in Form STK 3 and Affidavit in Form STK 4. In case director is a foreign national or non-resident Indian, the documents should be notarized or apostilled or consularised.
Company should get the statement of accounts in Form STK-8 containing the assets and liabilities of the company made up to a day, not more than thirty days before the date of application. Such a statement should be certified by a Chartered Accountant;
General Meeting should be held on the day, date, time and venue as fixed earlier for passing of the special resolution.
Within thirty days from the date of the passing of the special resolution in the General Meeting or after obtaining consent, company should file Form MGT-14.
Approval of concerned authorities is required in case of a company regulated by any other authority.
Thereafter, an application for removal of the name of the company shall be made in Form STK-2 along with the fee of ten thousand rupees. Following documents will be attached in the Form STK-2. {Rule 4(1)} Attachment – STK-2: Rule 4(3).
The company shall also place the application on its website, if any, till the disposal of the application.
E-Form STK-2 shall be signed by an authorized director.
E-Form STK-2 shall be certified by Company secretary in whole time practice or Chartered Accountant in whole time practice or Cost Accountant in whole time practice.
Public notice by ROC: After filing application for strike off by the company, the ROC shall publish a public notice in Form STK-6 inviting objections to the proposed strike off, if any. The notice will also be published for information of the general public in the following ways:
Intimation to regulatory authorities: Intimation about the proposed action of removal or striking off the name of the company should be sent to the Income-tax authorities, GST authorities having jurisdiction over the company to seek their objections, if any, which shall be furnished within a period of thirty days from the date of issue of the letter of intimation.
Striking off / Removal of the name of the company: After thirty days from the date of issue of the letter of intimation and unless cause to the contrary is shown by the company, if there are no objections received within thirty days from the general public or respective authority, the ROC can proceed to strike off or remove the name of the company from the Register of Companies.
Provision for realisation of amount due: The ROC before passing an order for striking off / Removal of the name of the company should satisfy himself that sufficient provision has been made for the realisation 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. The ROC can obtain necessary undertakings from the managing director, director or other persons in charge of the management of the company. The assets of the company should be made available for the payment or discharge of all its liabilities and obligations even after the date of the order removing the name of the company from the Register of Companies.
Notice of dissolution of the company: After the expiry of the time mentioned in the notice, the ROC can strike off the name of the company from the Register. The notice of striking off the name of the company from the register of companies and its dissolution should be published in the Official Gazette in Form STK 7 and the same should also be placed on the official website of the Ministry of Corporate Affairs. The company shall stand dissolved on the publication of this notice in the Official Gazette.
No objection certificate (“NOC”) from appropriate Regulatory Authority concerned is required in case a company is regulated under a special Act which shall be attached to the application in Form STK- 2. The said NOC is required in case of the following companies:
Penalty: If an application is made in violation of section 248(1), 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) are brought to his notice.
If a company stands dissolved under section 248, it shall on and from the date mentioned in the notice of dissolution cease to operate as a company and the Certificate of Incorporation issued to it shall be deemed to have been cancelled from such date except for the purpose of realising the amount due to the company and for the payment or discharge of the liabilities or obligations of the company.
The liability, if any, of every director, manager or other officer who was exercising any power of management, and of every member of the company dissolved under section 248(5) of the Act, shall continue and may be enforced as if the company had not been dissolved.
The following STK Forms are used in strike off of the Company.
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Rambabu Director, Cybervillage Solutions Pvt ltdThe board of directors of the company shall follow the following procedure for removal of name of the company from the Register of Companies maintained by the ROC. Herein below is the step by step process involved in sriking off by the Company:
Call and hold Board Meeting to pass Board resolution for the purpose of striking off of the name of the company from the Register maintained by the ROC, subject to the approval of the shareholders of the company, and to authorize any director to file an application and for fixing date, time and venue for the Extraordinary General Meeting of the shareholder.
After passing of Board resolution, if there is any liability in the company, the company will set off / pay all its liabilities.
Every director of the company should sign and execute indemnity bond duly notarised by every director in Form STK 3 and Affidavit in Form STK 4. In case director is a foreign national or non-resident Indian, the documents should be notarized or apostilled or consularised.
Company should get the statement of accounts in Form STK-8 containing the assets and liabilities of the company made up to a day, not more than thirty days before the date of application. Such a statement should be certified by a Chartered Accountant;
General Meeting should be held on the day, date, time and venue as fixed earlier for passing of the special resolution.
Within thirty days from the date of the passing of the special resolution in the General Meeting or after obtaining consent, company should file Form MGT-14.
Approval of concerned authorities is required in case of a company regulated by any other authority.
Thereafter, an application for removal of the name of the company shall be made in Form STK-2 along with the fee of ten thousand rupees. Following documents will be attached in the Form STK-2. {Rule 4(1)} Attachment – STK-2: Rule 4(3).
The company shall also place the application on its website, if any, till the disposal of the application.
E-Form STK-2 shall be signed by an authorized director.
E-Form STK-2 shall be certified by Company secretary in whole time practice or Chartered Accountant in whole time practice or Cost Accountant in whole time practice.
Public notice by ROC: After filing application for strike off by the company, the ROC shall publish a public notice in Form STK-6 inviting objections to the proposed strike off, if any. The notice will also be published for information of the general public in the following ways:
Intimation to regulatory authorities: Intimation about the proposed action of removal or striking off the name of the company should be sent to the Income-tax authorities, GST authorities having jurisdiction over the company to seek their objections, if any, which shall be furnished within a period of thirty days from the date of issue of the letter of intimation.
Striking off / Removal of the name of the company: After thirty days from the date of issue of the letter of intimation and unless cause to the contrary is shown by the company, if there are no objections received within thirty days from the general public or respective authority, the ROC can proceed to strike off or remove the name of the company from the Register of Companies.
Provision for realisation of amount due: The ROC before passing an order for striking off / Removal of the name of the company should satisfy himself that sufficient provision has been made for the realisation 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. The ROC can obtain necessary undertakings from the managing director, director or other persons in charge of the management of the company. The assets of the company should be made available for the payment or discharge of all its liabilities and obligations even after the date of the order removing the name of the company from the Register of Companies.
Notice of dissolution of the company: After the expiry of the time mentioned in the notice, the ROC can strike off the name of the company from the Register. The notice of striking off the name of the company from the register of companies and its dissolution should be published in the Official Gazette in Form STK 7 and the same should also be placed on the official website of the Ministry of Corporate Affairs. The company shall stand dissolved on the publication of this notice in the Official Gazette.
Yes. You need to pay Rs.10,000/- challan apart from stamp duty, notary and professional charges etc.,
Normally 3 to 6 months.
<The liability, if any, of every director, manager or other officer who was exercising any power of management, and of every member of the company dissolved under section 248(5) of the Act, shall continue and may be enforced as if the company had not been dissolved.
Yes. You are eligible to open new company after closure of existing company.
Existing DIN is used for all companies provided the DIN should be in active status.
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