Closure Of Companies

At the time of incorporation, every company aspires of running its business to the perpetuity. But all the businesses can’t run successfully for a long period. There are certain procedures for closing a business. There are two ways to close a business, and these are struck off & winding up the company. We will discuss striking off the company here.

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A striking-off company means removing the name of the company from the register of the company, and the company also ceases to exist. It can be initiated by the company or ROC suo moto.

Strike off by ROC Suo Motu

ROC can make compulsory striking off in the following cases

  1. If it fails to start its business within a year of incorporation.
  2. If it is not carrying any operations immediately preceding two previous years.
  3. If subscribers to the Memorandum do not pay the subscription amount and the declaration is also not filled within 180 days from its incorporation.
  4. If it is found during physical verification by the registrar of the company that this company is not carrying out any operations.

Documents required for striking off application

The following documents are required to be attached while filing these forms for applying for striking off a company

  • An indemnity bond is notified by all directors in form STK-3.
  • A statement that shows all the liabilities and assets of the company and should be certified by a practising-chartered accountant.
  • A copy of a special resolution signed by all the directors and certified.
  • In form STK-4, an affidavit.
  • A statement showing all the pending litigation of the company.
  • Relevant orders copy for delisting of a company.
  • A certificate of non-objection from the respective regulatory department.

Procedure for Striking off a company

The following steps are required to follow for striking off the company

  • Convey a board meeting by the authorized directors and pass a board resolution.
  • Notice for the board meeting should be given 7 days before the meeting.
  • Send notice for an annual general meeting or extraordinary general meeting if required.
  • Have a special resolution through the general meeting.
  • File MGT-14 with all the required documents and fees.
  • File STK-2 will have all the required documents and fees.
  • After checking all the documents and fees, the registrar of companies will publish a public notice in the Official Gazette after fulfilling all the required conditions.

Once the application is made to the registrar of companies by file, e-forms MGT-14 and STK-2 with required fees, then ROC will verify all the documents then it will remove the name of the company.