Closure of Company (Striking off) Under Companies Act 2013

Closure of Company (Striking off) Under Companies Act 2013 means removing the name of the company from the register of the company and the company also ceases to exist. There are two types of strike-off companies.

Voluntary Striking off

In this process a company’s directors initiate voluntarily on its own motion to close the business of the company officially by filling ROC forms on MCA portal.

The registrar of Company check mandatory information and documents required for filling the ROC form to strike the name of the company. After approval of Registrar, when a business is voluntarily struck off, it is removed from the official register of companies and its legal existence is ended. The process is available to all companies, from small limited companies to large public companies.. Striking off is generally a more cost-effective and faster process than winding up.

Compulsory Winding up

Winding up, on the other hand, is a more complex and formal process that involves the liquidation of a company’s assets and the distribution of its liabilities among its creditors and shareholders. It is always initiated by third parties either shareholders or creditors or by government due to non-compliance of rules and regulations.

Winding up can be initiated voluntarily by the members or creditors of the company, or by an order of the National Company Law Tribunal (NCLT) in case of default or non-compliance with the provisions of the Companies Act. Winding up is a more formal and time-consuming process than striking off and involves more legal formalities.

Now we will discuss voluntary company closure in this section.

Grounds of Strike off

The provision of strike-off could be enacted on the basis of the following grounds:

1. The company hasn’t commenced its business within one year of its incorporation.
2. The company hasn’t been pursuing any business or activity for the preceding two financial years, for which it hasn’t sought the status of Dormant Company under Section 455 of the Act.

When a company cannot apply for Strike Off

1. It has changed its registered office from one state to another and its name.
2. Immediately after ceasing of trade or in the normal course of business, it has made a disposal for the value of its property or held it.
3. It is conducting activities except for the one which is necessary for making an application for this.
4. It has made an application to the tribunal for sanctioning compromise, and the matter has not been concluded yet.

 

Documents required for filing Strike off

1. The company must hold the Board meeting and pass the Resolutions for the following purpose:-

1. To consider and approve filing of application for removal of name.
2. To authorize any director to file an application to ROC for removal of name and to obtain consent of minimum 75% of the members of the Company.
3. To fix the date, day, place and time for the general meeting of the Company for passing a Special resolution.
4. To approve the draft notice of the general meeting along with the explanatory statement. To authorize any officer to issue notice of the general meeting.

Format

CERTIFIED TRUE COPY OF THE RESOLUTION PASSED AT THE MEETING OF THE BOARD OF DIRECTORS OF _____________________ LIMITED HELD AT THE REGISTERED OFFICE OF THE COMPANY AT _______________________, ON __________________ AT ________________.

“RESOLVED THAT the consent of the Board of Directors of the Company be and is hereby accorded to make an application to the Registrar of Companies, NCT of Delhi and Haryana under the provisions of section 248 of Companies Act 2013 for striking off the name of the Company from the Register of Companies.

“RESOLVED FURTHER THAT _________, Director of the Company be and is hereby, requested to make an application and to give necessary affidavits and indemnity bond under section 248 of Companies Act 2013, as per the draft of the same as placed before the meeting duly initialed by the Chairman for the purpose of identification in order to get the name of Company struck off from the Register of Companies maintained by the Registrar.

“RESOLVED FURTHER THAT ___________, Director of the Company be and is hereby authorized to sign and give any information, clarifications , explanations and to do all such acts and deeds as may be required under the Act, to implement the above said resolutions.”

For _____________________ ______________

 

 

(Director)

DIN:
 

2. Hold a general meeting to pass the special resolution for removal of name of the Company from the ROC

Format

CERTIFIED TRUE COPY OF THE SPECIAL RESOLUTION PASSED IN THE EXTRA-ORDINARY GENERAL MEETING OF THE MEMBERS OF __________________________ LIMITED HELD AT THE REGISTERED OFFICE OF THE COMPANY AT D__________________________ ON ______________ AT ________________

“RESOLVED THAT the consent of the members of the Company be and is hereby accorded to the Board of directors to make an application to the Registrar of Companies, NCT of Delhi and Haryana under the provisions of Section 248(2) of the Companies Act, 2013 for striking off the name of the Company from the Register of Company and the Board of directors of the Company be and is hereby authorised to do all such, matters, deeds and things as may be required under the provisions of the Companies Act, 2013 and the rules made there under.

“RESOLVED FURTHER THAT any Director of the Company be and is hereby authorized to make an application in this regard and to take all necessary actions as may be required to strike off the name of the Company.”  

For ____________________ ____________

 

(Director)

DIN: _____________
 

3. File a copy of special resolution in form MGT-14 within 30 days of passing the resolution.
4. File an application to ROC for removal of name of company in Form STK-2 along with the required following documents :

1. Indemnity bond duly notarized by every director in Form STK-3.
2. A statement of accounts in Form STK-8 containing the assets and liabilities of the Company made up to a day not more than 30 days before the date of the application and duly certified by CA.
3. An affidavit in Form STK-4 by every director of the Company.
4. A statement regarding pending litigations, if any, involving the Company
    

 

 

 

 

 

Formats

STK-3 (INDEMNITY BOND)

(To be drawn on Stamp Paper of appropriate value) (to be given individually or collectively by every director)

[Pursuant to clause (i) of sub-rule (3) of rule 4 of the Companies (Removal of Names of Companies from

the Register of Companies) Rules, 2016]

To,

The Registrar of Companies,

1. I/We, the Director(s) of ……………… (mention name of  the  Company), incorporated on       under the Companies Act, 2013 or Companies Act, 1956

having its registered office at............................. do hereby declare that:

1. I/We ……………………….S/o/D/o/W/o Shri……………..am/are Director(s) of this Company.
2. That I/We have made an affidavit confirming that the company does not have any assets and liabilities as on date.
3. Further, the Company has been inoperative from the date of its incorporation/The Company commenced business/operations/commercial activity after incorporation but has been inoperative for the past.............................................................................. year(s) (strike out whichever is not

applicable). Thus the Company is defunct and I request the Registrar of Companies, to strike off the name of the Company from the register of companies under Section 248 of the Companies Act, 2013.

2. I/We do hereby undertake to indemnify : -

1. the claimants for all lawful claims against the company arising in future after the striking off the name of the Company.
2. any person for any losses that may arise pursuant to striking off the name of the Company.
3. the claimants for  all lawful claims and liabilities,  which have not come to our notice up to this stage, and if any claim arises or observed even after the name of the Company has been struck off in terms of Section 248 of the Companies Act, 2013.

Place:

 

Date:

(Name, Father’s name, Address and Signature)

 

(To be given by every Director)

 

WITNESSES:

 

1. Signature:

 

Name:

 

Father’s name:

 

Address:

 

Occupation:

2. Signature:

 

Name: Father’s name: Address: Occupation

Format

FORM NO. STK-4

AFFIDAVIT

[Pursuant to subsection (2) of section 248 read with clause (iii) of sub-rule (3) of Rule 4]

I……, Director of M/s………, (hereinafter called “the Company”), incorporated on ……….under the Companies Act, 1956 or 2013 having its Registered Office an ……and having CIN ……….do solemnly affirm and state as under:

1. I…... S/o …... holder of DIN ………is Director of the company stated above since……….

2. My present residential address is ………… (Copy of documentary evidence duly attested by PCA, PCS)

3. My permanent address is ………… (Copy of documentary evidence duly attested by PCA, PCS)

4. The company does not maintain any bank account as on date.

5. The Company M/s ……..does not have any assets and liabilities as on date.

6. The Company had not commenced business activity after incorporation and has been inoperative for more than past two years because promoters are not looking for any such activity.

7. As on date, the Company does not have any dues towards Income Tax / Sales Tax / Central Excise / Banks and Financial institutions any other Central or State Government Departments / Authorities or any Local Authorities.

I further affirm that

1. No inquiry, technical scrutiny, inspection, or investigation is ordered or pending against the company;

2. No prosecution or any compounding application for any offense under the Act or under any of the other Acts is pending against the company or against the undersigned;

3. The company is neither listed nor delisted for non-compliance of listing agreement;

4. The company is not a company incorporated for charitable purposes under section 8 of the Companies Act, 2013 or section 25 of the Companies Act, 1956;

5. The company does not have any management disputes or there is no litigation pending with regard to management or shareholding of the company;

6. No order is in operation staying filing of the documents by a court or tribunal or any other competent authority;

7. The company is not prevented from making the applications for strike off as mentioned in section 249 of the Act.

I solemnly state that the contents of this affidavit are true to the best of my knowledge and belief and that it conceals nothing and that no part of it is false.

(Deponent)

Verification:-

I verify that the contents of this affidavit are true to the best of my knowledge and belief.

                                                                                                                                                                                          (Deponent)

Place: Delhi

Date:

Value of Stamp Duty

1. Affidavits should be on Rs.10.00 Non Judicial
2. Indemnity Bond should be on Rs.200.00 Non-Judicial

The value of stamp duty varied according to the state. We have mentioned for the Delhi State. Kindly confirm your advocate for the value of the stamp duty for these two documents.

Other Information for Closure

1. Make sure that all the demand pending on the income tax portal are either paid or settled and order has been received.
2. All the statutory dues of the ESIC/ PF are paid, annual return is filed and no demand is pending. And ESIC and PF registration has been surrendered
3. All the Factories act related dues are cleared
4. GST is filed up to date and annual return is complete and application of closure of GST has been filed
5. All the creditors’ dues has been settled down.
6. All the secured and unsecured loans are paid off and Index of charges on MCA portal shows satisfied.
7. Other license are surrendered