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Strike Off Under Companies Act, 2013

January 20, 2017     by bsamrishindia.com

With notification of Section 248-252 by the MCA vide Notification No. 16/2016 on 26th December, 2016, the process of striking off the name of the Company from the Register of Companies through the Fast Track Exit often called FTE, stands revised. The “Fast Track Exit” mode and now “Strike Off” mode was introduced by the MCA to give opportunity to the defunct companies to get their names struck off from the Register of Companies.

 

Eligibility Criteria for Companies to opt for Strike Off:

The following companies are eligible for opting for strike off:

  • A company which has failed to commence its business within one year of its incorporation; or
  • A company which is not carrying on any business or operation for a period of 2 immediately preceding financial years and has not made any application within such period for obtaining the status of a dormant company under section 455,

Modes of Strike Off

There are two modes of Strike off:

  • Suo moto by the Registrar of Companies (Section 248(1)):

For reasons that the company has failed to commence its business within one year or had not been doing business or operation for last two financial years.

  • By way of Application by the Company (Section 248(2)):

The Company can file an application voluntarily with the Registrar of Companies for Striking off the name of the Company. The grounds for voluntarily making such an explanation by the company remains the same as is mentioned in the 1st mode, i.e. the company has failed to commence business or had not done any business for last two financial years.

Here in this blog, we have discussed this second mode.

As per the provisions of Section 248-252 of Companies Act, 2013 read with Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016, a company may file an application for strike off as detailed herein below:-

  • A company may file an APPLICATION in the Form STK-2 (shall be accompanied by certain prescribed documents) along with the fee of Five Thousand Rupees for removing the name of the company from the Registerof Companies, after extinguishing all its liabilities.
  • The main ingredients for such an application are:
    • Application in form STK-2
    • Government filing fees: INR 5,000/-
    • Copy of Board resolution authorizing the filing of this application;
    • A statement of accounts showing nil assets and liabilities of the Company which shall be not more than thirty days before the date of application and certified by a Chartered Accountant
    • Shareholder’s approval by way of Special Resolution
    • In the case of a company regulated by any other authority, approval of such authority shall also be required.
    • Indemnity bond [to be given individually or collectively by the director(s)] in Form No. STK-3;
    • Affidavit in Form No. STK-4

Companies on whom Strike off under Section 248 is Not Applicable

The guidelines does not inter-alia cover

  • Listed companies;
  • Companies that have been delisted due to non-compliance of listing regulations or listing agreement or any other statutory laws;
  • Vanishing companies;
  • 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 have been issued by the Registrar or Inspector (under Section 234 of the Companies Act, 1956 (old Act) or section 206 or section 207 of the Act)and reply thereto is pending;
  • Companies against which any prosecution for an offence is pending in any court;
  • Companies whose application for compounding is pending;
  • 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
  • Not-for-profit Companiesregistered under Section 25 of the Companies Act, 1956 or section 8 of the Act.

Some other facts to consider

  • If there is pending prosecution against the company and its directors: If the pending prosecutions are only for non-filing of Annual Returns under section 92 and Balance Sheet under section 137 of the Act, such application may be accepted provided the applicants have already filed the compounding application. However, steps for final strike of the name of the company will be taken only after disposal of compounding application by the competent authority.
  • NOC from Tax Authorities: NOC is not required from Income Tax / Sales Tax / Central Excise / other Govt. authorities. But all directors need to confirm that there are no dues pending against Company with any such authorities. And MCA will send notice to the Income Tax / other authoritiesenquiring whether they haveany objection for striking off the name of the said Company.
  • Manner of notarisation, apostilled or consularisation of indemnity bond and declaration in case of foreign nationals or non-resident Indians: As provided under STK rules, if the Director of the Company applying for striking off, is a foreign national or non-resident Indian, the indemnity bond and declaration shall be notarised or apostilled or consularised in the country of the foreign national.
  • Stamp Duty: Stamp Duty is required to be paid on Affidavit and Indemnity Bond as per respective State Stamp laws.
  • Make sure that the company does not maintain any bank account as on the date of filing application and also does not have any assets and liabilities.

Brief procedure followed after filing of application for Strike off

  • Where a company has filed an application (e-form STK-2), a public notice shall be issued by ROC (Form STK-6) inviting objections to the proposed Strike off, if any. The objections are to be sent to the respective ROC within thirty days from the date of publication. The notice shall be placed on the website of Ministry of Corporate Affairs, published in the Official Gazette and published in a leading English newspaper and at least in one vernacular newspaper where the registered office of the company is situated. Application shall also be placed on the website of the company, if any.
  • Before striking off, ROC shall satisfy itself that sufficient provision has been made for realisation of all amounts due to the company and for the payment or discharging of its liabilities.
  • Notice of striking off and dissolution of company – After having followed and dealt with the above steps, the Registrar shall strike off the name and dissolve the Company. Notice of striking off and its dissolution to be published in the Official Gazette (Form STK 7). The published notice shall be to the effect that the company’s name has been struck off the register of companies and the said company dissolved with effect from the date (mentioned therein). The same shall also be placed on the official website of the Ministry of Corporate Affairs.

Difference between FTE under Section 560 of Companies Act, 1956 and under Section 448-452 of Companies Act, 2013 (Strike Off)

S. No. Basis FTE under Section 560 Strike Off under Section 448-452
1.         Board Resolution / Special Resolution One could proceed for FTE by passing just a Board Resolution. It is required to pass Special Resolution or need consent of 3/4thmembers to proceed for Strike Off.
2.         Period for which the Company has not carried on any business To proceed for FTE there was a condition that the Company shall not carry business for a period of preceding 1 year. To proceed for Strike Off there is a condition that the Company shall not carry business for a period of preceding 2 financial years.

 



 

177 thoughts on “Strike Off Under Companies Act, 2013

  1. company was strikeoff and we r not interested to work but last year before strikeoff we sell company property and tds is pending overall company is not in profit company is in loss we fill return of 2017-18 or not and we claim for tds and then cancel the pan of company we r very confused plese suggest

  2. sir company strikeoff in 2017 sep. before that we sold property and tds deposit inincome tax deparment we r in loss and the payment of share holders are pending hum return bhar sakte hai kya or hume ac bandh karna hai and pan cylinder karna hai tds lena hai

    1. As stated by you, the Company has already been struck off in September 2017 therefore it has no legal existence and hence you cannot file any returns. Also, you are required to surrender your PAN and TAN number.

      1. what we do with bank ac hume paise share holders ko dene hai de sakte hai 16000 balance hai ac main dene 60000 rs hai if we cant claim tds then what we do and in future any income tax notice come then

      2. sir u told me to surrender pan and tan but when i asked ca he told without fill return its not possible and we sale property of 60 lakhs if we not fill return then scutiny from income tax come surely

  3. How we know about the strike off date of company.official Gazette or letter issue date or dispatch date.if roc send letter in July end to the company and strike off date is july first week but that date company active online and company received mca confirmation mail of form fill in july second week

  4. Sir,
    I have a pvt Ltd. Company, opened two years ago
    We have not done any business since then and not applied for PAN also.
    Not filed any returns since then.
    Company status is shwing active
    Can i directly go for STK2
    if yes
    then should i pass both Board resolution & Special Resolution???
    Please advice

    1. As per Section 248(1) of Companies Act, 2013, if a company has not commenced any business for a period of atleast 1 year since its incorporation then it can go for strike off. And, both Board Resolution and Special Resolution are required for this purpose.

  5. What is the treatment of of surplus / deficit cash balance in bank account after paying all liabalites in the case of strike off.

    1. Sec. 248 requires a statement of account containing assets and liabilities made up to a day not more than 30 days before the date of application. Therefore, the company need to close its bank account and before closing it must withdraw all the money from its bank account/s. This money could be utilized for discharging any liabilities that may be outstanding including statutory fees, professional fees etc. relating to strike off the company.

  6. Sir , my parents were directors in a company that closed down 1 year back. It has been strike off under master records of companies records.

    Now after 1 year there is a labour court judgement against the company to pay 800000.

    Now since there are no property in companies name, are the directors responsible in there personal capacity

    1. As per sec. 248 (7) 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 which is dissolved under Sec. 248 (5), shall continue and may be enforced as if the company had not been dissolved.

      Therefore, in your case liability of Directors can be enforced even after striking off.

  7. Sir if company bank ac have only one transaction in march 2014 from 1 jan 2012 to 31 march 2017.company sell property in 2017 april and pay dues.company strike off due to non filling since incorporation due to fault of ca but company fill every year income tax return.we should go for revive or not.puchase property in 2010.

    1. If a company has no work in future then it may not be revived but disqualification incurred by directors as a result of striking off should be removed. Therefore, you should seek relief by filing a writ petition with High Court for this matter.

  8. Sir company incorporation in 2009 last and then purchase property and construction start and aftercthat from 1jan 2012 to 31 march 2017 there is only one transaction in bank ac on march 2014 and in april 2017 we sell the property and clear the balance sheet and every year income tax return filled by company but not filled in roc due to ca fault and company strike off 248 section 5 we should go for revive the company or not.we have no work in future.there is any process without revival to fill documents in roc or roc have any power for those company whi are interested in voluntier strike off

    1. If a company has no work in future then it may not be revived but disqualification incurred by directors as a result of striking off should be removed. Therefore, you should seek relief by filing a writ petition with High Court for this matter.

  9. Procedure for strikking of Foreign Company is similar to striking of Indian Company or Not ? Please provide me procedure for striking of foreign company.

  10. Hi, I had formed a Pvt Ltd Co with Rs.200/- as the starting capital in 2002. We had a bank account. We carried out a couple of transactions in the first year (no profit, only loss) but nothing since the last 15 years. We did not file the P&L or any taxes. We have no assets and no liabilities. Our company is now in the process of being struck off. The directors are no longer in India and are not active on any other company in India. Should we just let the company be struck off? We are not interested in reviving the company or conducting any business in India.

    1. If you do not wish to revive the company or conduct any business you can let ROC strike off your company suo moto.

      However, the Directors will attract disqualification for five years if the company lets RoC strike off, without the company having filed old returns. It is mandatory to file necessary returns and if the returns not filed for a continuous period of 3 years, Directors of such company are disqualified.

  11. Sir, We two partners have applied for LLP in SEP 2014, This was for an future project. We tied our level best best for avialaiing loan as per CGTSME scheme but failed to avail the loan. We opened account but there is no transaction in LLP and bank account both since the start. Now today we have received email from ROC stating that “FORM 16
    [Refer Section 12(1)(b) of the LLP Act, 2008]
    CERTIFICATE OF INCORPORATION ” with details as ” LLP Identification no xyz , It is hereby certified that XYX LLP is incorporated persuant to section 12(1) of the limited liability act 2008. Given at maharashtra this 26/3/2018.” We are unable to understand that. Whether our Company came to existence on the date mentioned in certificate of incorporation or from the date of application. From Which date our E- filing will be mandatory. Please guide us.

    1. Similar mails are received by many companies due to some software glitch. So your date of incorporation is the date mentioned in Certificate of Incorporation that you have got originally.

    2. As per section 12 (4) of LLP Act, 2008; Certificate of Incorporation is the conclusive evidence that the LLP is incorporated.

      Keeping this view in mind, it can be said that your company came into existence on 26/03/2018 and hence e-filing will be done subsequent to the date of incorporation.

      Similar mails were received by many because of some software glitch.

  12. Thank you for valuable information. You have replied to every query. That is ultimate level of professionalism!!!

    One of my company has 40 Lacs of share Capital and negative reserves of 2 Lacs ie 38 lacs in liability side.

    These 38 Lacs is represented by Bank account in the asset side.

    Will I have to show loss of 38 Lacs to go for strike off?

    Can I not just distribute the balance sharecapital to shareholders?

    1. In basic accounting there is no concept of NIL balance sheet, therefore, for Strike Off, we prepare a balance sheet whereby the Capital on liabilities side is set off by loss incurred by the Company under the head Profit and Loss (Debit Balance). Further, all the liabilities have to be extinguished by the Company before proceeding with the strike off.

      In this case Rs.38 lacs in bank balance is asset.Till this bank balance is exhausted you cannot file for strike off.

      No, the balance share capital can’t be distributed unless the company decides for voluntary liquidation among shareholders.

  13. Sir, is it absolutely necessary to surrender the pan card of the company after strike-off?

    If it is not taken care of, can the IT dept ask for ITR even after strike-off? But the question of income tax does not arise when the company is not active at all.

    In case the PAN card needs to surrendered, what is the procedure?

    Thanks in advance, Sir.

    1. PAN Card is generally required to be surrendered in case of duplicate issue. As per our understanding it may not be required here. In any case, if you wish to cancel/ surrender you can voluntarily write a letter, explaining the reasons for discontinued filing of the return and can request the A.O. to close the file and ask for surrender of the PAN card/or can send the PAN card for cancellation.

  14. A Pvt Company didn’t file annual returns for the last two financial year as it incur loss for the last two financial year. Can we apply for the strike off without completing annual filing.

    1. As per last proviso to Rule 7 of the Companies (The Registration Offices and Fees) Rules, 2014, no request for recording any event based information or changes shall be accepted by the Registrar from defaulting companies, unless they file their updated Balance Sheet and Profit and Loss Account and Annual Return with the Registrar of Companies. Therefore, before proceeding with Strike Off, the Company need to complete their pending Annual Filings.

  15. Hi , I have one LLP company registered in 2012 but could not do any business. Though I have filed NIL return for 3 years just to keep the company alive,now I want to close this. How can I do it. Pls advise

  16. Please let me know the interpretation of “A company which is not carrying on any business or operation” under this section

    1. The quoted line can be interpreted as the Company is not conducting any business or operations through which it is:
      1. generating recurring income
      2. increasing value of business assets
      3. Securing the income and value of the business

  17. my company form on 07/06/2017. company not call subscrbition/ share capital. how we prepare audit balance sheet for said period, as it require to submitted to irda for noc

    1. As per Section 10 of the Companies Act, 2013, the provisions contained in the MOA and AOA of a Company shall be binding on the Company and each of the members thereof. Therefore, it is mandatory for the subscribers to pay subscription money.
      The Section also provides that all moneys payable by members to the company shall be debt due from him to the Company. therefore, it is to be shown as debt to be paid by the members.

    2. “As per Section 10 of the Companies Act, 2013, the provisions contained in the MOA and AOA of a Company shall be binding on the Company and each of the members thereof. Therefore, it is mandatory for the subscribers to pay subscription money.

      The Section also provides that all moneys payable by members to the company shall be debt due from him to the Company. therefore, it is to be shown as debt to be paid by the members.”

  18. Dear Sir,
    My query about board resolution n special resolution under strike off company.
    * Board resolution will pass before special resolution or after special resolution.
    * What will be format for notice of EOGM.
    * if MGT 14 will file ..thn board resolution would also attach with special resolution or not?

    1. The Directors are required to approve the Board Resolution for making strike off application. Board resolution shall be passed before the approval of Members by way of Special resolution. There is no format prescribed for the notice of EGM, Under form MGT-14, only Certified Copy of the special Resolution is required to be enclosed.

  19. Dear Sir(s),
    I want to know that i have a private limited company incorporation date is April 07 2017 and the company has not commence its business since incorporation. Now we want to close the company so can we file Form STK 2 now.

    1. As per Section 248 sub-section 1 and 2, the Company has to wait for atleast one year since the date of its incorporation to go for strike off through STK-2. So, in this case, an application can be filed only after April 7, 2018.

  20. Hi . I had registered llp in2012 . Opened an bank account .. bu never did any business as our partner went apart ..I want to close the llp but the fines a very high .which I cannot afford .. is there a way to close it and avoid heavy fine ?

    1. In case you have filed not Form 3, agreement of partnership, you can close LLP without the complying with the annual filing requirements, on a contrary in case Form 3 is filed you have to complete your annual filing along with additional fee, for a period of one year.

  21. A company has 3 shareholders, out of which one of the shareholder is a company and got struck off by the MCA due to non filing. Now what will be the treatment of the shares held by struck off shareholder company, since it is 50% of the total paid up capital of the company. Please advice.

    1. As the Company(Shareholder) has been struck off, it is no longer a legal entity. Ministry has directed not to transfer those shares. So, neither the issuer company nor the struck off Company (shareholder) can effect any transaction in respect of those shares. The fate of such shares is a question which is yet to be addressed by the Ministry.

  22. One Company is striked off by ROC and directors are diqualified. That company never started business from incorporation never opened bank account. Directors are holding directorship in other companies. IN such case how can a director remove his disqulification ? Directors does not want to revive company since it never started business. Kindly Advise under which section director needs to file application to NCLT for getting directors from NCLT on future actions to be taken.

    1. There is no immediate power to NCLT to remove the disqualification of directors, neither Companies Act provides for any specific removal of disqualification.
      Therefore, another option with you is to file a writ petition with the High Court.
      Also, on September 21, 2017 Madras High court passed an interim order staying the Registrar of Companies (RoC) Chennai’s order striking off the name of Bhagavan Das Dhananjaya Das as director of Birdies and Eagles Sports Technology, a private company.

  23. Can board of directors authorize a person to sign on Indemnity Bond (STK-3) and Affidavit STK(4) under Companies Strike off Scheme

    1. As per Rule 4(3) of the Companies (Removal of Name of Companies from the Register of Companies) Rules, 2016, the affidavit and indemnity bond is to be signed by every director. Therefore, the Board can’t authorise a single person to sign on behalf of the entire Board.

  24. company receive notice under sec 248 for non filing of annual compliance. Registrar either remove the name if the company don,t send any representative.

    But the company wants to strike off.
    what should the company do and what is the impact?
    without filing annual compliance for three year is it possible to strike off.

    Thanking you

    1. If a company receives notice under sec 248 (1) and it doesn’t send any representations then on the expiry of 30 days from the date of notice, the Registrar can strike off the name of the company as per sec 248(5) and the company shall stand dissolved. But if it is struck off like this, the directors are also disqualified for 5 years u/s 164(2) for non-filing of annual returns.
      If you want to go for strike off, first you need to file the pending annual returns for all the years and then apply for same u/s 248(2).

  25. hi all,
    i invested some amount in a public ltd company in installment policy , but now the company status in mca is “strike off ” i tried to visit office but is closed. how i can get my money back pleases help me.

    1. You can apply for restoration of the Company. According to the Section 252 of Companies act 2013, restoration of name of a company struck off under section 248 can be done by making an application to Tribunal by the aggrieved parties i.e., by company or member or creditor or workman to restore company’s name.
      The Tribunal, after submission of the application, shall give a reasonable opportunity of being heard to ROC, company and all the parties concerned and thereafter, pass an order that it deems fit

  26. Hello sir.. on the closure of a private limited company, the director has adjusted the unsecured loan amount given by him to the co against the fixed assets and has not charged depreciation but has paid the employees.. The adjustment which took place should be approved by board resolution or whether it can given by an affidavit.. please clarify.

    1. The adjustments carried out for preparing NIL balance sheet is not required to be approved either by Board Resolution or through an affidavit. Further, you are advised to consult a good tax consultant for a better opinion on these adjustments.

  27. Hi Sir,

    Recently my company has been mentioned for strike off (Sept 2017) and I haven’t done any business for many years.

    But we still hold a property in company name. What is the procedure in selling company property when the status of the company is strike off ?

    Do we need to make it active before selling of the property ?

    Thanks in advance.

  28. A company was incorporated in june 2016 and it increased its authorised capital in june 2016 only. But the said company did not commenced any business activity since its incorporation, can it file for strike off us 248? and also if spcl resolution is passed is mgt-14 is also to be filed?

    1. As per Section 248 (1) a company which has failed to commence business within 1 year of incorporation or which is defunct (non-operational) for last two financial years can go for strike off.
      The application for strike off needs to be filed in STK-2. The special resolution should be attached in form STK-2 and need not be filed in MGT-14.

  29. Hi,
    I want to strike off a company having a paid up capital of Rs. 30 Lakhs and I am having 35 Lakhs in company’s bank account.
    As per the Norms I need to close Bank Account before filing of the application for clouser. What to be done in this case?

    1. In case of strike off as per sec 248(2) of the Act, the bank account has to be closed before going for strike off. Since your company is having 35 lacs in the bank account as asset, it cannot apply for strike off unless all the assets are exhausted and the capital is eroded.

      Considering the case in point, you can proceed for Voluntary Liquidation u/s 271 of the Act.

  30. Our company has not filled its annual returns for last three years. Can it be defunct by filing STK 2 or we have to first file their annual returns for last three years and after that file STK 2.

    1. As per last proviso to Rule 7 of the Companies (The Registration Offices and Fees) Rules, 2014, no request for recording any event based information or changes shall be accepted by the Registrar from defaulting companies, unless they file their updated Balance Sheet and Profit and Loss Account and Annual Return with the Registrar of Companies. Therefore, before proceeding with Strike Off, the Company need to Complete their pending Annual Filings.

  31. Please guide me on below mentioned queries:
    1. Accounting treatment of closure of Bank A/c if Bank payees closure amount to director through cheque.
    2. Can the liabilities be return back to P/L A/c.
    3. Can Statutory auditor certify Financial Statement before application of Strike off.
    4. My company have Capital 1 lacs, P/L a/c (debit) 50k, Liability 30k and Bank 80k. how to proceed for strike off.

    1. The questions pertains to financials of the company. We do not reply to such specifics. Nonetheless, the company is required to close its bank account. Before closing it must deposit the cheques, if any, withdraw all the monies from its bank account/s. This money should be utilized for discharging any liabilities that may be outstanding including statutory fees, professional fees etc. relating to strike off the company. The statutory auditor can certify the financials.

  32. Hi..my firm has advised the directors to take back share capital as funds refunded on liquidation. And stk_2 has been filed thus….with nil liabilities….will roc raise an objection?
    Please advice on corrective action.

  33. our private limited co, has not filed its annual returns for the last 3 years. Now ROC has strike off. How to file the pending Annual returns.

  34. sir,
    our company is pvt.ltd company. past 3 years we have not filed annual returns and now the company is in strike off list. Business is doing and salestax returns filed up to date. How to bring back our company in active status. Please advise

  35. Dear Sir,

    Can you please send formats of attachments required in form STK-2 and format of resolution passed in board meeting and general meeting?

    1. List of documents to be attached with form STK-2 is prescribed under Rule 4(3) of the Companies (Removal of Name of Companies from the Register of Companies) Rules, 2016. Format of the attachements are also prescibed under the same. P

  36. Under Rule 8 of Companies Removal of name it is said that for foreign national Declaration shall be notrized
    Please let me know what declaration is to be given and if there is any format for the same request you to kindly provide the same.
    Thanks in advance.

    1. Declaration to be given is same as the Affidavit prescribed under Rule 4(3)(iii) of the Companies (Removal of Name of Companies from the Register of Companies) Rules, 2016. Format of the same is also prescibed under STK-4.

    1. As per our understanding, the investments should be written off. But you should also consult a Chartered Accountant who can guide you in a better way w.r.t. the accounting treatment of the same.

  37. Company has incorporated in April 2012, not run business,no bank account, no Assests no liabilities carries,
    Company status on MCA is active.
    NO notice came regarding strike off.

    Now company wants to strike off the company ..so my query is company needs to file financial statements and annual filling first for 5 years or will do compounding application or only have to file form STK 2 for strike off the company name from ROC with required attachments.
    At what time the company would be struck off..

    1. As per last proviso to Rule 7 of the Companies (The Registration Offices and Fees) Rules, 2014, no request for recording any event based information or changes shall be accepted by the Registrar from defaulting companies, unless they file their updated Balance Sheet and Profit and Loss Account and Annual Return with the Registrar of Companies. Therefore, before proceeding with Strike Off, the Company need to Complete their pending Annual Filings.
      As for the compounding, it is entirely upto the ROC whether they ask the company to compound the offense or not.

  38. Agovernment company is to be wind up but the comp;any has not filed its balance sheet for last 3 years .Whetehr thec ompany has to file the balance sheet before winding up.Also CAG has appointed the auditor

    1. Apologies for the late reply. Please find below the answer to your query as below:
      A company which has not filed its annual returns consecutively for three years, its directors become disqualified. Have you started winding up process? Further facts are needed. However, it is suggested that annual filings be done.

  39. Dear Sir
    Greetings !!
    Thanks for writing this article.
    I request you to please advise us on the following situation:
    My company is not in operation from last 3 years and has no Liability. But company is having reverses amounting to Rs. 55 lacs.

    Please advise how i can proceed with strike off in this case. Company don’t want to proceed with voluntary winding up.

    1. Sorry for the delayed response. Please find the reply to your query as follows:
      Section 248(2) states that a Company may after extinguishing all its assets and liabilities, proceed for filing of application for Strike Off. Therefore, the Company must firstly extinguish its liabilities and go for Strike Off.

    1. Sorry for the delay in replying to your query. Please find below the solution to your query:
      As per Section 248 of CA, 2013, A Company can make an application to ROC for removal of name of Company from register of Companies when it has failed to commence its business within 1 year of incorporation. So, here Company cannot make application for strike off within 5 months from incorporation.

  40. Hi Sir.

    How many months does it take for the ROC to strike off the company after the filing of strike off application?

    Thanks

    1. Time taken by ROC to strike off of a company is depended upon the under which jurisdiction of ROC your application falls. There are no prescribed criteria for it. We have seen cases where the company was struck off within 2 months and then there have been instances where it took much longer.

  41. Sir
    A private company not doing any business for more than two years wishes to get its name struck off the register of companies. However, in the balance sheet there is a paid up capital of around 7 lakhs. How to make balance sheet NIL in such a case? Please guide.

    1. For the purposes of strike off the Company needs to have Nil Assets and Liabilities.
      In your case, even if you have a capital of Rs. 7,00,000/- it will be set-off against the loss of the same amount in Profit and Loss account, provided you have zero/ nil assets. Even if this amount appears on the Statement of Assets and Liabilities it shall be construed as nil.

  42. There is some bank balance and some cash balance for my company, so before filing the application STK2, I will need to withdraw all the cash and close my bank account, after clearly all liabilities there will very small amount of cash remaining, should that all also be distributed as dividend, it that correct?

    1. “Apologies for the delay in reverting with the solution to your query. Please find the answer to your query as follows:
      Dividends can be paid out of the profits and/or reserves. So no, the amount cannot be distributed as dividend in your case.
      In case of strike off the company is required to close its bank account. Before closing it must withdraw all the monies from its bank account/s. This money should be utilized for discharging any liabilities that may be outstanding including statutory fees, professional fees etc. relating to strike off the company.”

  43. My company is in the list of being struck off. I saw it in the public notice on ROC Delhi, we haven’t filed returns, how much time do we have before it is struck off.

    1. Apologies for the late revert. Please go through the notice carefully. The time lines for reply period till when you have to file a reply or and further course of action warranted from your end must have been mentioned in the notice itself. Generally, a time period of 30 days is provided by ROC to file a reply.

  44. Hello Sir,
    Please can you confirm if SKT 3 and SKT 4 , if there are 6 Directors, stamp duty is to be paid for all the above forms individually?

    1. For making application of strike off the company needs STK 3 (Indemnity Bond) and STK 4 (Affidavit) from all the directors. The STK 3 and STK 4 must be on stamp paper of requisite value. The forms can be prepared individually or collectively.
      However stamp duty must be paid for all directors for both of the forms STK3 and STK 4.
      It must be noted that the stamp duty on STK 3 (Indemnity Bond) and STK 4 (Affidavit) shall be applicable as per the Stamp act of the state in which the company is situated.

  45. Sir,
    Regarding obtaining consent of 75% of the Members of the Company in terms of paid up share capital as on the date of application. I understand this consent can be taken after Board resolution is passed for making application u/s 248(2)? Is this correct or do we have to take prior consent from members before passing Board resolution. Thanks.

    1. Sorry for the delayed response. Please find below the reply to your query:
      Firstly, Board will pass the resolution for Strike off, and then seek the shareholders approval. General Parlance is that before going to the shareholders, Board should pass the resolution in that matter.

  46. need advice how order has been passed u/s 248(5) without considering section 248(6) non filing of return can not be a base to strike off companies.

    1. Kindly read 248(1) where 2 conditions have been specified for strike off. Non filing of financial statement and annual returns can be read as Company not carrying any business or operations, therefore fulfilling the second condition of Strike Off. Besides, the companies should have represented before the concerned RoC when it received notice u/s 248(1).

    1. The Property stands registered in the name of the Company which has been struck off and can’t be sold off since the Company is no longer in existence. In such cases, the struck off Company seeks to revive its name by filing an application with the Tribunal. If you are following the news, the corporate affairs ministry has asked states to complete identification of properties owned by de-registered companies at the earliest and ensure district administrations prevent transactions in those assets. The ministry has also urged the states to initiate disciplinary action against the officials concerned in case such transactions go through

  47. Dear Sir,
    One of my Company’s registered office in karnataka and two Directors from Karnataka and other two directors from Kolkata .

    So please guide me the indemnity bond of two states is required and what will be the stamp duty if the Company’s Authorished Capital Rs. 25 Lakhs and paid up Rs. 10. lakhs

  48. What accounting treatment can be passed for the pending cash balance if a company wants to be strike off?
    also if it has unsecured loan from director, can it be strike off?

    1. The balance sheet shall be NIL while filing for strike off, reflecting your share capital account to be squared up with your P&L debit balance (Loss). You can set off the same toward loan payable or professional fees. The process of strike off cannot proceed while you have unsecured creditors. Kindly ask your auditor to make necessary adjustment for the same.

    1. As per provisions of the section 164(2) of the Companies Act read with rule 14 of companies (Appointment and Qualification of Directors)Rules ,2014 default can be made good only after serving cooling off period of 5 years . Further Clarification from MCA is awaited on this point.

  49. My Private Ltd company has not filed its annual return/balance sheet for three years since it is not carrying on any business.
    Now,ROC has strike off. What are the consequences of the directors.

    1. Where the company has failed to file annual returns for continuous three years then as per the provisions of section 164 (2) of Companies Act, 2013 , directors of such company shall be disqualified for period of 5 years from being appointed as directors in any company. Once ROC has passed order for strike off, the liability of every director, manager or other officer who was exercising any power of management, and of every member of the company, shall continue and may be enforced as if the company had not been dissolved.

  50. Hi,

    There is a pvt limited company which got incorporated in 2015 may with 3 directors holding 33% share capital each. However the 2 directors cheated the 3rd director and resigned in January 2017 without transferring their part of shares to the 3rd director. Now the 3rd director wants the company to be should down..Now what exactly should be done to strike off this company’s name from ROC.

    They are not even meeting the minimum crirteria of 2 directors and the 3rd director got only 33% of shares, so therefor he cannot pass the special resolution required in the section.

    Please suggest what can be done?

    Thanks in advance.

    1. In this situation, as per Section 174 (2) of the Companies Act, 2013, the continuing director can only act to appoint a new director or call general meeting and for no other purpose.
      The first step shall be to appoint a new director so as to make total number of directors two as a private limited company is required to have at least two directors. This is necessary as a private company is required to have two directors at all times.
      It must be noted that for closure of the company strike off application under Section 248(2) can be made. Strike off requires assent of the shareholder via Special resolution. Since there is a deadlock between the remaining director-shareholder and the former director-shareholder need to agree for passing special resolution for closure of company.
      Deadlock in the management can be one of the grounds for applying winding up of the company. Application to be made to NCLT.
      Further facts would be required to suggest anything. But any one of the ways would have to be taken, i.e., either Voluntary winding up or strike off if the company is able to meet the conditions of nil assets and liabilities.

  51. Dear Sir,
    We have incorporated LLP in 2014 , But due to some personal reasons , the company did not do any operation . We have not filed any return during these period (2014-2017). Sir now i want to close or may be i want to do operation in this year . Please guide me that which option is beneficial either close it or re-start operation. And the procedure or the liability for non filling of return.

  52. ,
    ROC has suo moto removed name of my company since annual filings were not done for a long period of time. We didn’t receive any notice for struck off from ROC office. Yesterday, we came to know about the list (through news). I am willing to close the company. Please enlighten us upon the path for realisation of assets of the company and settling the liabilities, along with the liabilities of director. Please note that the company had very few transactions and were genuine. Nothing malafide was done at any time ! Please help.

    1. Once the ROC has struck off the name of the Company from its records, the Company stands dissolved as per Section 248(2). For realisation of assets and settling of liabilities, you need to proceed for the revival of the company. Please go through this link for more information. https://www.bsamrishindia.com/restoration-of-name-of-a-struck-off-company-under-companies-act-2013/

      You may also note that as per Section 248(7), liabilities of the Director, who was exercising any power of management, and of every member of the company dissolved under sub-section (5), shall continue and may be enforced as if the company had not been dissolved.

  53. We didn’t file for 4 yrs and we didn’t receive any SCN also. The company is in strike off status. This company didn’t do business for 3 yrs
    we have money in the name of the company can we use that money or what are the consequences arises if i use that money?

    1. There is not much clarity but once a company is striked off, it doesn’t remain a perpetual entity and all the assets and liabilities becomes personal assets and liabilities of shareholders and directors.

  54. Sir due to non filing of balance sheet our company striked off by roc we have not done any business and company not needed also is there any penalty on directors

    1. If the director of the company has not filed financial statements or annual returns for any continuous period of three financial years, then they fall under the disqualification of Director and they are not eligible for re-appointment and appointment in any other company for a period of five years from the date, the company fails to do so.

  55. A Pvt. Co. is Strike off by the ROC and the Director of this Co. is applied for conversion of Partnership firm to LLP, Can a disqualified Director become a designated partner in LLP?

    1. No, a disqualified director cannot act as designated partner. In accordance to the MCA clarifications any person disqualified under section 164(2) of the Companies Act, 2013 is advised not to act as director during the period of the disqualification and not to file any document or application with MCA as the same shall be summarily rejected.

  56. A company was incorporated in the year 2013 but has not filed Roc returns yet. It has planned to file returns now but the status of company appears as strike off. Now 1. Will the directors of that company are disqualified?If yes, for how many years
    2. What we can do to make company status as active other than going to tribunal u/s 252.

    1. 1. As per Section 164(2), Directors shall be disqualifed for a period of five years from the date on which the said company fails to do so.
      2. As per Section 252 of the Companies Act, 2013, there is only one option to revive the name of the company , you have to approach NCLT for obtaining a active status. NCLT may pass an order for restoration of name of the Company, subject to its satisfaction. You have to do the filing of annual returns of previous year to ROC.

  57. We didn’t file for 4 yrs and we didn’t receive any SCN also. The company is in strike off status. This company didn’t do business for 3 yrs. The issue is I am also a Director of another company and we are doing active business in this company. Will this strike off in any case affect the other company’s operations. Also, we had intentions to close the previous company, but it was too late now. Any suggestions?

    1. As per Section 164(2) of the Companies Act, 2013, any person who is or has been a director of a company which has not filed financial statements or annual returns for any continuous period of three financial years shall not be eligible to be re-appointed as a director of that company or appointed in other company for a period of five years from the date on which the said company fails to do so. You will be disqualified from being Director of any Company and you have to vacate office of Director in other Company immediately.

  58. Dear sir ,
    We have not filed any returns in roc for past 7 years due to negligence . But the company has been doing business. We have an outstanding loan also . We recieved a notice from roc to show the proof that company has been working . So we started filling the forms but the name of the company has been struck off . Now how do we revive the company and how does ot effect our running business and bank accounts

    1. If the name of the Company is struck off, you can go for restoration of name of the Company by making application to the Tribunal u/s 252(1) of the Companies Act, 2013. The application is to be made within a period of three years from the date of the order of the Registrar. If the Tribunal is satisfied, it will order for restoration of the name of the company.

    2. Do we have to go through high court ot directly in roc . Can a director approach the roc or donwe have to take a ca along?

      1. For the purpose of applying for strike off of a company, there is no specific mentioned requirement of a Charted Accountant. The directors themselves can apply for strike off. But for making an application under section 248 (strike off), there is a basic condition of extinguishment of all the liabilities and assets of the company, and a statement of the same shall be certified by any professional (not specifically required to be a charted accountant).

  59. Dear Sir,

    If a subsidiary of Listed company wants to be a strke off then whats a compliance to be done ?
    any resolution to be pass by listed company or not?

    1. Subsidiary of a listed Co. can undergo the process of striking off by filing Form STK-2 with MCA on satisfying the basic requirements as per Sec. 248 of the Companies Act, 2013. As per Regulation 24(6) of SEBI [LODR] and Section 180 of the Companies Act 2013, prior approval of shareholders of the Listed Entity is required by way of Special resolution before any sale/dispose/lease of assets in the subsidiary Co. (where more than 20% of the assets are disposed in a Financial year).

  60. Hello sir,
    Rules specify that the company shall have no assets and liabilities
    Can a company having rs.100000/- share capital, loss of 60000 and cash balance of 40000 apply for strike off???
    Requesting you to reply back for the query..

    1. In basic accounting there is no concept of NIL balance sheet, therefore, for FTE or Strike Off, we prepare a balance sheet whereby the Capital on liabilities side is set off by loss incurred by the Company under the head Profit and Loss (Debit Balance). Meaning all the liabilities have been extinguished by the Company before proceeding with the strike off.
      In your case, Rs. 40,000/- cash balance is asset. Till this cash balance is exhausted, you can not file for strike off.

    1. According to Rule 4(3)(ii) read with Rule – 7(2) of the Companies (Removal of Name of Companies from the Register of the Companies) Rules, 2016, Every application in Form STK 2 shall be accompanied by 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. ROC shall, simultaneously intimate the Income-tax authorities and other tax authorities having jurisdiction over the company, about the proposed action of removal or striking off the names of such companies. So if there is any issue related to non-payment of Tax or any income escaping or any previous defaults relating to Income Tax Provisions, IT department may raise objections on it and ask the assessee to file the return and other required documents before passing the order of Strike-off.

      1. Sir, I have a query that my company is not working and has not filed annual filing since 2013. now i want to close the company, can i have to complete annual filing before file STK-2.

        1. Section 248(2) does not specifically prescribe any filing to be completed before a non-operative or a defunct company can proceed for making application for strike-off.
          However, in case of a company failing to file annual returns for consecutive period of three years, as per section 164 (2) the directors of such company are disqualified from holding office of the company and the other companies in which they are directors. They won’t be allowed to make an application for strike off.
          There have been cases where the Registrar of Company has specifically asked the applicant companies to complete their annual filing first before the application for strike off could be entertained.

  61. How can the Company have a nil balance sheet when share capital is sitting on the liabilities side? Does this mean the shareholders have to be returned their capital before making an application for striking off the name of the Company from the Register of Companies?

    1. In basic accounting there is no concept of NIL balance sheet, therefore, for FTE or Strike Off, we prepare a balance sheet whereby the Capital on liabilities side is set off by loss incurred by the Company under the head Profit and Loss (Debit Balance). Meaning all the liabilities have been extinguished by the Company before proceeding with the strike off.

  62. If Special Resolution is passed us 248(2), is it mandatory to file MGT-14 for registration of this SR before filing STK-2? And what will be the situation if consent of 75% holder of Paid up Capital is obtained?

    1. Yes, MGT-14 is required to be filed if SR is passed. However, if consent of 75% holders of paid up capital is obtained, then no need to pass SR. MGT-14 will not be filed in this case.

    2. I’ve filed an STK-2 (without filing MGT-14) two days back and its status is pending for approval . Can I file MGT-14 now?
      Another STK-2 was filed around 45 days back and right now form is under the process of striking off, what can be done in that case? Will it attract penalty as per section 117 (2)??

  63. Dear Team,

    Company not in operation for 2 years. Filed STK-2. Now recd letter from mca for resubmission mentioning rule 7 of Companies(regn off and fees) rules.
    do we need to file all pending balance sheets and annual returns before filing stk-2?

    1. As per the provision of section 248 sub section 2 read with 4 of the (Removal Of Names Of Companies From The Register Of Companies) rules, 2016, a company may, after extinguishing all its liabilities, by a special resolution or consent of seventy-five per cent members in terms of paid-up share capital, file an application for striking-off the name of the Company. There is no condition for filling the pending balance sheet and annual returns, however if ROC states any defects in the strike-off application already made, then the same needs to be rectified accordingly.

    2. Hi what was the conclusion on this? Is a Company necessarily required to file Annual Returns and Balance Sheet before applying for suo moto strike off.

      1. As per the Fast track exit scheme, there was no as such requirement to file pending statutory returns before applying for strike off. However, Under the Companies Act, 2013, pursuant to section 248 and chapter XXIV of Companies Act Rules “No request for recording any event based information or changes shall be accepted by the Registrar from such defaulting companies, unless they file their updated Balance Sheet and Profit and Loss Account and Annual Return with the Registrar of Companies “ . Thus, we can conclude that a company needs to file it’s annual return and balance sheet before applying for suo moto strike off.

  64. Hi, how to show share capital as nil..which matches the asset side with cash..can we distribute the cash to shareholders… what happens to share capital..is there any other provision which needs to be complied to make share capital nil. Please reply

    1. In basic accounting there is no concept of NIL balance sheet, therefore, for FTE or Strike Off, we prepare a balance sheet whereby the Capital on liabilities side is set off by loss incurred by the Company under the head Profit and Loss (Debit Balance). Meaning all the liabilities have been extinguished by the Company before proceeding with the strike off.

  65. Dear Sir/Madamm,
    I have registered a pvt ltd company on 2015. I have not made any business transaction, no current account, not filled return filling since its incorporation. What are the option I have now for closing the firm – 1) If in future govt itself closes my company by issuing STK-1 notice to me, do I need to pay any fine or penalty for the same. 2) I should go for Fast Track Exit to close firm. 3) Any other inexpensive option with less legal hassles

    1. 1. No you don’t need to pay any fine or penalty if the ROC sends you a notice for strike off.
      2. If the Company is falling within the criteria prescribed on whom the provisions of strike off are applicable, the Company can suo moto approach ROC to strike off the company.
      3. Strike off is the least expensive option as compared to going for the winding up of the Company. And if the Company has nil Assets and Liabilities, it is advised to proceed with Strike off only.

  66. If the company incorporated in year 2011 has not filed its annual return/balance sheet can it file stk-2 without filing the annual return. Its status is still active in ROC but has received notice for removal of name since it is not carrying on any business

    1. There is no need to file STK-2 as the ROC will strike off the name suo moto u/s 248(1) . You may at best reply to the notice issued by the RoC for removal of name that your company has not carried any business since incorporation / past 2 years and therefore, the name of the company be striked off.

    1. There is no prescribed format for consent obtained in lieu of special Resolution under Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016. However, company may obtain the same from the shareholders by mentioning the reason for striking off and obtaining authorization for making the application.

  67. a company applying for removal of name under sec 248 of the Companies Act ,2013 has a surpus bank balance in the bank. can the surplus be paid to the Holding Company on the date the aplication for removal of name is filed with ROC

      1. this is not under FTE but Sec 248 which requires a statement of account containing assets and liabilities made up to a day not more than 30 days before the date of application.

  68. Dear Team,

    According to my view term “vanishing company” means a company, registered under the Act or previous company law or any other law for the time being in force and listed with Stock Exchange which has failed to file its returns with the Registrar of Companies and Stock Exchange for a consecutive period of two years, and is not maintaining its registered office at the address notified with the Registrar of Companies or Stock Exchange and none of its directors are traceable.

    I read your article wherein its mentioned that “If there is pending prosecution against the company and its directors: If the pending prosecutions are only for non-filing of Annual Returns under section 92 and Balance Sheet under section 137 of the Act, such application may be accepted provided the applicants have already filed the compounding application. However, steps for final strike of the name of the company will be taken only after disposal of compounding application by the competent authority”.

    Can you please clarify under which section or rule the above criteria is mentioned, since Vanishing Company definition starts with Company, registered under the Act or previous company law or any other law for the time being in force and listed with Stock Exchange, so basically only listed entities will be falling due of not applying for strike off for non-compliance of filing of annual returns and financial statements

    Thanks in advance

    1. As per the FAQs given by MCA, this criteria has been mentioned about prosecution against the company and its directors and as per the explanation to rules of Strike off, “vanishing company” means a company, registered under the Act or previous company law or any other law for the time being in force and listed with Stock Exchange which has failed to file its returns with the Registrar of Companies and Stock Exchange for a consecutive period of two years, and is not maintaining its registered office at the address notified with the Registrar of Companies or Stock Exchange and none of its directors are traceable.

      1. Hi Team,
        Thanks for your clarification.
        But according to me the word “and” listed in stock exchange is represented, so according to my interpretation its applicable only if listed companies have failed to file Annual statements.

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