Strike Off Company means that the name of the Company was removed from the official Registrar Of Companies and now will not be recognized as a legally valid business. The Name of the company cannot strike off by the registrar until it is dissolved by process of law, either by winding up or amalgamation with another company
Manner Off Strike Off:
- By the company (Self voluntary): The Company can make an application to ROC for striking off by extinguishing its liabilities
- ROC can direct strike off Company in the below cases:
– If Company has not commenced its business within 1 year after its Incorporation
– A Company is not carrying its business or Operation within 2 years immediately preceding the financial year and has not made any application for such period for the status of Dormant Company
– The subscriber of the Memorandum has not paid subscription fees at the time of incorporation and Form INC-20A is not filled within 180 Days
– The Company is not doing any operation of the business as revealed during the physical verification
Procedure Of Company Strike Off
- As Per Section 248 (2), the application for removal of the name of the company from the registrar of companies should be made to the registrar, center for Processing accelerated Corporate Exit in Form No. STK-2 along with the fee of ten thousand rupees
- The Company should convene board meetings for:
- Approval of strike off
- Authorization of director to apply to ROC
iii. Issue Notice for Convening extra Ordinary meeting
- After Passing a board resolution if there are any liabilities exist within the Company it has to be extinguished
- The Company must convene an extraordinary general meeting for passing the special resolution
- Approval of the Concerned Authority that regulates the company is required
- File MGT-14 within 30 days of conducting the board meeting with normal fees and STK-2 with ROC with the prescribed challan of ten thousand rupees
- Attachments of STK-2
The application in Form STK 2 shall be accompanied by –
- indemnity bond duly notarized by every director in Form STK 3;
- a statement of accounts containing assets and liabilities of the company made up to a day, not more than thirty days before the date of application and certified by a Chartered Accountant;
iii. An affidavit in Form STK 4 by every director of the company;
- a copy of the special resolution duly certified by each of the directors of the company or consent of seventy-five percent of the members of the company in terms of paid-up share capital as of the date of application;
- a statement regarding pending litigations, if any, involving the company.
These Are the Procedures for Striking Off the company issued by MCA. The strike-off application can be made by the active company and by the dormant company as well. It is important to note that there may be additional steps or requirements depending on the business sector you are operating in seeking quick professional advice is always advisable in order to have a peaceful closure.
In recent years, there have been several company closures in India, including those of foreign and domestic companies. For instance, Big Giants like Ford Motor in the recent past also announced the closure of local production in India and shut down both of its plants, affecting approximately 4,000 employees. Additionally, according to government data, over 10,000 firms in India voluntarily shuttered operations during the COVID-19 pandemic. Other examples of company closures in India include five automobile companies that have shut their operations in the country in the last five years, including MAN Trucks, General Motors, and Harley Davidson.
If you and your business are not making money there is no harm in closing the organization and moving ahead, if multinational giants can do then certainly you too can do that, it’s not a failure it’s the beginning of something new that may lead to a better tomorrow.
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