Strike off name of Companies – An Overview

History– under the Companies Act 1956, the companies may strike off only by the Registrar as per section 560 of the Companies Act 1956, earlier there was no procedure...

History– under the Companies Act 1956, the companies may strike off only by the Registrar as per section 560 of the Companies Act 1956, earlier there was no procedure to strike off the Companies on the application made by the Company, Further considering the problems of stakeholders Ministry has issued the guidelines on FTE (Fast Track Exist Scheme) implemented with effect from 3rd July, 2011 to strike off the defunct Companies under FTE scheme. Under this scheme, stakeholder could be filed e-form FTE attaching the necessary documents in that with the fees of Rs. Five thousand.

However under the Companies Act 2013, Ministry has made separate provisions (section 248(2)) in the Act to strike off the Companies on Application made by the Company.

Introduction

Strike off i.e. removal of the name of Company from the Register of Registrar of Companies. Under the Companies Ac 2013, The Companies may strike off from the Register of Registrar of Companies by the following two methods.

1. Removal of name of company from the Register by the Registrar on Suo-motu basis.-
2. Application for removal of name of company

Removal of name of the company from the Register by the Registrar on the Suo-motu basis.

The Company may strike off by the Registrar as per section 248(1), where the Registrar has the reason that:

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

He shall send a notice to the company and all the directors of the company in form no. STK 1, of his intention to remove the name of the company from the register of companies and requesting them to send their representations along with copies of the relevant documents, if any, within a period of thirty days from the date of the notice. If the company failed to represent within a period of 30 days notice before the Registrar. He will publish the notice in the public as per section 248(1) and (4) in the form no. STK 5 seeking objection from any stakeholder within 30 days of the publication of the notice. Where no objections received by the Registrar from the public than Registrar publish a notice in STK 7 for Striking off the name of the Company from the Register of Companies in the official Gazette and the Company will stand dissolved from the date of publication of notice in STK 7.

Restrictions on the Removal of name of company from the Register by the Registrar on Suo-motu basis-

The following Companies shall not be removed by the Registrar from the Register of Companies as per rule 3 of the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016.

1. Listed companies;
2. Companies that have been delisted due to non-compliance of listing regulations or listing agreement or any other statutory laws;
3. Vanishing companies;
4. 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;
5. Companies, where notices under section 234 of the Companies Act, 1956 (1 of 1956) or section 206 or section 207 of the Act have been issued by the Registrar or Inspector and reply thereto, is pending or report under section 208 has not yet been submitted or follow-up of instructions on report under section 208 is pending or where any prosecution arising out of such inquiry or scrutiny, if any, is pending with the Court;
6. Companies against which any prosecution for an offense is pending in any court;
7. Companies whose application for compounding is pending before the competent authority for
8. Compounding the offenses committed by the company or any of its officers in default;
9. Companies, which have accepted public deposits which are either outstanding or the company is in default in repayment of the same;
10. Companies having charges which are pending for satisfaction; and
11. Companies registered under section 25 of the Companies Act, 1956 or section 8 of the Act. 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.

Application for removal of name of company

As per section 248(2), 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 in the form no. STK 2 to the Registrar for removing the name of the company from the register of companies, on receipt of such application Registrar, shall cause a public notice to be issued in the form no. STK 6 seeking objection from any stakeholder within 30 days of the publication of the notice. Where no objections received by the Registrar from the public than Registrar publish a notice in STK 7 for Striking off the name of the Company from the Register of Companies in the official Gazette and the Company will stand dissolved from the date of publication of notice in STK 7.

Restrictions on making application for removal of name of Company

As per section 249 of the Companies Act 2013, an application cannot be made by the stakeholder for removal of the name of Company if any time in the previous three months.

1. The Company has changed its name or shifted its registered office from one to another state.
2. The Company has made a disposal of the value of property or rights held by it, immediately before cesser of trade for taking advantage.
3. Has engaged in any other activity except the one which is necessary or expedient for the purpose of making an application under that section, or deciding whether to do so or concluding the affairs of the company or complying with any statutory requirement.
4. Has made an application to the Tribunal for the sanctioning of a compromise or arrangement and the matter has not been finally concluded.
5. Is being wound up under Chapter XX, whether voluntarily or by the Tribunal.

Procedure for the removal of names of Companies from the Register of Companies on application by the Company.

As per section 248(2), a Company can make an application to Registrar for removal of the name of Company from the Register of Companies in form no. STK 2 with the fees of Rs. 5000/- after passing the special resolution along with the following mandatory attachments:

Mandatory Attachments:

1. A statement of accounts showing the 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.
2. Copy of Board Resolution authorizing the filing of this application.
3. Copy of special resolution passed or copies of consent obtained under sub-section (2) of section 248, as applicable.
4. Indemnity bonds [to be given individually or collectively by the director(s)] in Form No. STK-3.
5. Affidavit in Form No. STK-4.

Conditional:

1. Copy of order of the concerned regulatory authority, if any, approving the filing of this application
2. Copy of relevant order for delisting, if any, from the concerned Stock Exchange.

Restoration of the name of Strike off Companies.

As per section 252(1)any person aggrieved by an order of the Registrar may file an appeal to the Tribunal within a period of three years from the date of the order of the Registrar and if the Tribunal is of the opinion that the removal of the name of the company from the register of companies is not justified in view of the absence of any of the grounds on which the order was passed by the Registrar, it may order restoration of the name of the company in the register of companies.

As per section 252(3),If a company, or any member or creditor or workman feels aggrieved by the company having its name struck off from the register of companies, Any company, member, creditor or workman before the expiry of twenty years from the publication in the Official Gazette of the notice under sub-section (5) of section 248 may appeal to the Tribunal that the company was, at the time of its name being struck off, carrying on business or in operation or otherwise it is just that the name of the company be restored to the register of companies, order the name of the company to be restored to the register of companies.

Some new provisions added in the Companies Act 2013 for strike off.

As per section 252(1), any person may appeal to the Tribunal for the restoration of the name of Company within three years of struck off from the register of companies.
As per section 252(3) of the Companies Act 2013, the workman is also included to the restoration of the name of Company within twenty years of struck off from the register of companies with the Company, member, and creditor as provided earlier in section 560 of the Companies Act 1956.
As per section 248(2), Special Resolution should be passed by the Company if the company wants to Strike off the name of the company by making the application to Registrar.
Restriction on the Strike of the name of companies on application made by the company is newly provisions added in section 249 of the Companies Act 2013, and restrictions on the Strike of the name of the company by the Registrar is mandatory added in rule 3 of the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016, which were earlier given in the guidelines for fast track exit scheme.
Categories
Corporate Laws
No Comment

Leave a Reply

*

*




Ask for FREE
Consultancy now.











RELATED BY

Feedback & Support