Process for the Closure of a Company- The company must extinguish all its liabilities as a first step for strike off.

Modes of Strike Off of a Company under Companies Act 2013:

Pursuant to the provisions of Companies Act, 2013 there are two modes of strike off as mentioned below:

  • Strike off by ROC under Section 248(1) of the Companies Act 2013
  • Strike off by Company by its own under Section 248(2) of the Companies Act 2013.

2. Grounds of strike Off of a Company under Companies Act 2013:

  • A company has failed to commence its business within one year of incorporation;
  • The company is not carrying out any business or Activity for preceding 2 financial years and has not sought the status of Dormant Company under Section 455 of the Act.

3. Strike off by ROC under Section 248(1) of the Companies Act 2013

The registrar if having a reasonable cause as mentioned above may send notice in Form STK-1 of Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016 to the

  • Company and
  • all the Directors of the company,

Informing his intention to remove company’s name from the record and request company to send its representations along with supporting documents within thirty days from the date of notice. This process can also be called as Compulsory removal of name from registrar of companies.

4. Strike off by Company by its own under Section 248(2) of the Companies Act 2013

The company can file an application in E-form STK-2 with Registrar of Companies suo-motto after extinguishing all its liabilities, by special resolution or with the consent of seventy five percent of the members in terms of paid up share capital, to the Registrar for removing the name of the Company on all or any of the above mentioned grounds2

After which it has to:

  • Hold a board meeting for approving voluntary closure of a company and notice for convening an extra ordinary general meeting (EGM).
  • Convene the EGM and pass a special resolution for voluntary closure of company.
  • File e-Form MGT-14 for reporting of special resolution passed by the company. Alternatively, where the company does not wish to hold EGM, a consent letter from 75% of the members, in terms of paid-up share capital of the company to be obtained.
  • File an application with ROC in e-Form STK-2 with all the mandatory attachments mentioned above to remove the name of the company from RoC.
  • Once the ROC is satisfied and the e-Form is approved after completing all the necessary scrutiny, it will strike off the name of the company.

Documents required before filing the strike off application:-

  1. Indemnity bond notarised by every director of the company in Form STK-3;
  2. Statement of accounts in Form STK-8 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;
  3. Affidavit in Form STK-4 from every director of the company;
  4. A copy of the special resolution duly certified by each director of the company orconsent of 75% of the members of the company in terms of paid up share capital as on the date of application;
  5. A statement regarding pending litigations, if any, involving the company;
  6. Where a company is registered with any other regulatory authorities like SEBI, RBI etc., No Objection Certificate (NOC) from such regulatory bodies shall be obtained. 

Points to be kept in mind to to Close a Private Limited Company (Strike Off):

  1. The fees for filing of e-Form STK- 2 is INR 10,000/-.
  2. All the overdue forms i.e., Form AOC-4 and MGT-7 up to the end of the financial year in which the company ceased to carry its business operations should be filed with the ROC.
  3. The e-Form STK-2 shall be certified by practicing professionals (Company Secretary/ Chartered Accountants/ Cost Accountants).
  4. An application for strike off cannot be made if, at any time in the previous 3 months, the company-:

i. has changed its name or shifted the registered office of the company from one state to another

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