Company Strike off means removing the name of the company from the register of companies. Company Strike off can be done on following grounds:
- Company has failed to commence its business within one year of its incorporation.
- Company is not carrying on any business activity for a period of two immediately preceding financial years and has not made application for dormant status of company.
- Subscribers of memorandum have not paid the subscription money after incorporation of a company and Form INC-20A (Declaration for commencement of business) has not been filed within one hundred and eighty days of its incorporation.
- Company is not carrying on any business or operations, as revealed after the physical verification carried out by Registrar.
On the basis of aforesaid grounds, strike off can be done by:
- Registrar on Suo-Motu basis.
- Registrar after receiving application from company.
Conditions for Striking off Application By Company
- Not held any Assets or Liabilities by Company.
- Special Resolution for application of Company Strike Off.
- No pending returns i.e. AOC-4/AOC-4 XBRL and MGT-7/7A up to the end of the financial year in which the company ceased to carry its business operations.
- Not changed its name or not shifted its registered office from one State to another in last 3 months.
- Not made an application to the Tribunal for the sanctioning of a compromise or arrangement and the matter has not been finally concluded in last 3 months.
- Not being wound up under Chapter XX (Winding Up) of Companies Act 2013 or under the Insolvency and Bankruptcy Code, 2016 in last 3 months.
- Not made a disposal for value of property or rights held by it, immediately before cesser of 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 in last 3 months.
- In case of a company regulated under a special Act, approval of the regulatory body constituted or established under that relevant Act.
Restrictions on Registrar of Companies for Company Strike off
Following categories of companies shall not be removed from the Register of Companies / shall not be strike off :
- Listed companies.
- Companies that have been delisted due to non-compliance of listing regulations or listing agreement or any other statutory laws.
- 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 or section 206 or section 207 of the Companies Act, 2013 have been issued by the Registrar or Inspector and reply thereto is pending or report under section 208 of the Companies Act, 2013 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.
- Vanishing companies.
- 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.
- Companies whose returns i.e. AOC-4/AOC-4 XBRL and MGT-7/7A up to the end of the financial year in which the company ceased to carry its business operations is/are pending.
Process of Strike off by Registrar of Companies
- In case of Suo-Motu basis by Registrar, shall give a notice in writing in Form STK 1 which shall be sent to all the directors of the company.
- Notice for striking off of Company in Form STK-5/5A/6 shall be placed on the official website of the Ministry of Corporate Affairs and also published in the Official Gazette for the information of the general public and also published in English language in a leading English newspaper and at least once in vernacular language in a leading vernacular language newspaper.
- The Registrar of Companies shall, simultaneously intimate the concerned regulatory authorities regulating the company, viz, the Income-tax authorities, central excise authorities and GST authorities having jurisdiction over the company, about the proposed action of removal or striking off the names of such companies and seek objections, if any, to be furnished within a period of thirty days from the date of issue of the letter of intimation and if no objections are received within thirty days from the respective authority, it shall be presumed that they have no objections to the proposed action of striking off or removal of name.
- At the expiry of the time mentioned in the notice, the Registrar may, unless any objection by the company, Strike off/Remove its name from the register of companies, and Notice of Striking off and dissolution of Company to be published in the Official Gazette in Form STK 7 and the same shall also be placed on the official website of the Ministry of Corporate Affairs, and on the publication in the Official Gazette of this notice, the Company shall stand strike off/dissolved.
The author can also be reached at carishi.rg@gmail.com.
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