Strike off Company

The Companies Act, 2013 provides several grounds for striking off a company:

• Non-filing of Annual Returns: If a company fails to file its annual returns for a period of three consecutive years, the ROC may initiate proceedings to strike it off.

• Non-payment of Fees: If a company fails to pay statutory fees or penalties within the prescribed time, the ROC can initiate striking-off proceedings.

• Non-functioning or Dormant Company: A company that has ceased to function or become dormant for a specified period may be struck off.

• Insolvency or Winding Up: If a company is declared insolvent or is undergoing winding up proceedings, it can be struck off.

• Public Interest: The ROC may initiate striking-off proceedings in the public interest, such as if the company is involved in fraudulent activities or has misled investors. 

Procedure for Voluntary Striking Off:

1. Company Resolution: A company can initiate the process by passing a special resolution or obtaining the consent of 75% of its members (based on paid-up capital).

2. Application to ROC: The company then submits an application to the Registrar of Companies (ROC) in Form STK-2 requesting the removal of its name from the Register of Companies.

3. Grounds for Application: The application must be based on one or both of the following grounds:

   • Non-Commencement of Business: The company has failed to commence business within one year of incorporation.

   • Inactivity: The company has been inoperative or has not carried out any business for the two preceding financial years. Additionally, it has not filed an application for dormant company status under Section 455 during this period.

ROC Action Upon Application:

Upon receiving the application, the ROC will issue a public notice as prescribed in the Companies Act. This notice informs the public about the company's intention to strike off.

A company cannot apply for voluntary striking off if it has:

• Disposed of Assets: Sold assets for gain within the past three months.

• Shifted Registered Office: Changed its registered office or name within the past three months.

• Pending Tribunal Matters: Has pending arrangement or compromise matters before the National Company Law Tribunal.

• Engaged in Other Activities: Engaged in activities beyond those necessary for the application or winding up.

• Undergoing Winding Up: Is already undergoing winding up proceedings.

Note: Failure to comply with these restrictions can result in a fine of up to Rs. 1 lakh.