On incorporation, the name of the company is registered and maintained by the Registrar. On striking off, the name of the company is temporarily removed from the said Register. On submission of an application, the company’s name can be restored by the Register.
Two modes of striking off:
- Strike Off by ROC
- Strike Off by the company
When the company’s affairs are completely striking off in accordance with the provisions for the company’s winding up, the status of the company is changed to “Dissolved” or “Liquidated” for a company that is undergoing the Striking Off process either voluntarily or as a result of an action taken by the ROC. The company ceases to exist upon dissolution or liquidation.
Strike Off by ROC
Subject to the provisions of section 248(1) the Registrar can suo moto remove the name of the company from the Register, in the following cases:
- If a company hasn’t started doing business within a year of being incorporated, it’s considered to be dormant.
- If a company hasn’t applied for the status of a dormant company in the two immediately preceding financial years, it’s considered to be dormant.
- Within 180 days of the memorandum’s incorporation, a declaration stating that the subscription has not been paid by the subscribers has not been filed.
- According to the findings of the physical verification, the company is not engaged in any kind of business or operation.
ROC must follow the following procedure for striking the company’s name suo motu basis:
- Service of notice by ROC: In order to remove the company’s name from the Register of Companies, the ROC is required to notify the company and all of its directors via Form STK 1.
- Reply to the Notice from the company: The company and all of its directors are required to send representations explaining the reasons why the company’s name should not be removed from the Register of Companies upon receiving such a notice. Within thirty days of receiving the notice, such a representation must be made.
- Consideration of the representation made by the company: The company’s and all of its directors’ statements will be taken into account by the ROC. The ROC may proceed to remove the company’s name if it is dissatisfied with the representations made by the company and its directors.
- Publication of notice of strike off by ROC: The notification for removal of the name of the company ought to be in form STK 5 for the data of the overall population put on the official site, official gazette, English language in a main English paper and at least one in vernacular language.
- Intimation to regulatory authorities: The Income-tax, central excise, and service-tax authorities with jurisdiction over such a company should be notified of any plans to remove or strike the company’s names. This notice ought to be given so that the authorities can, if necessary, raise objections. These objections must be made within thirty days of the date the letter of intimation was sent out.
- Striking off / Removal of the name of the company: The ROC can proceed to strike off or remove the company’s name from the Register of Companies after thirty days since the date of the letter of intimation is issued, provided the company does not demonstrate any reason to the contrary and no objections have been received from the general public or the relevant authority within those thirty days.
- Provision for realisation of amount due: Before issuing an order for the company’s name to be struck off or removed, the ROC needs to make sure that enough money has been set aside for the company to pay back everything it owes and get out of its debts and obligations in a timely manner.
- Notice of dissolution of the company by the ROC: The ROC has the option of removing the company’s name from the Register after the specified time period has passed. Form STK 7 should be used to publish the notice of the company’s dissolution and removal from the Register of Companies, and it should also be posted on the Ministry of Corporate Affairs’ official website. When this notice is published in the Official Gazette, the business will be dissolved.
Strike Off by Company
Companies that are not in business have the option to have their names removed from the Register of Companies under strike-off provisions. Numerous businesses are registered with the ROC but are inactive for a variety of reasons. Companies affected by the strike-off have the option of submitting a request to the ROC to have their names removed from the Register of Companies.
Procedure for striking off the company’s name through an application to ROC
The company’s board of directors must follow the following procedure to remove the company’s name from the Register of Companies maintained by the ROC:
- Call and hold a Board Meeting in order to pass a resolution that the company’s name be strike off from the ROC’s Register.
- If a Board resolution is passed, the company will set off or pay all of its liabilities if there are any.
- Each director of the organization ought to sign and execute repayment bond properly notarised by every director in Structure STK 3 and affidavit sworn Form STK 4.
- The assets and liabilities of the company should be included on the company’s Form STK-8 statement of accounts no later than one day before the application date. A Chartered Accountant should sign off on such a statement.
- For the purpose of passing the special resolution, the General Meeting ought to be held on the earlier-set date, time, and location.
- The business should submit MGT-14 within thirty days of the General Meeting’s approval of the special resolution or after obtaining consent.
- In the case of a business that is regulated by another authority, approval from those authorities is required.
- After that, the fee of ten thousand rupees and an application on Form STK-2 for the company’s name to be removed must be paid.
- E-Form STK-2 must be certified in full time practice by the company secretary, Chartered Accountant, or Cost Accountant in full time practice.
- The ROC must publish a public notice on Form STK-6 inviting any objections to the proposed strike off after the company files an application for it.
- The Income-tax, central excise, and service-tax authorities with jurisdiction over the company should be informed about the proposed action of removing or striking off the company’s name. If there are any objections, they should be provided within thirty days of the date of the letter of intimation.
- Following thirty days from the date of issue of the letter of implication and except if cause in actuality is shown by the organization, in the event that there are no complaints gotten in no less than thirty days from the overall population or particular power, the ROC can continue to strike off or eliminate the name of the organization from the Register of Organizations.
- Before issuing an order to strike off or remove the company’s name, the ROC needs to make sure that enough money has been set aside to cover the company’s obligations and liabilities within a reasonable amount of time.
- The ROC has the option of removing the company’s name from the Register after the specified time period has passed. Form STK 7 should be used to publish the notice of the company’s dissolution and removal from the register of companies, and it should also be posted on the Ministry of Corporate Affairs’ official website. When this notice is published in the Official Gazette, the business will be dissolved.
Restoration of the company
After issuing the notice to strike the company’s name, the ROC can act unilaterally. Even though the company is currently in operation, it is possible for the ROC to remove the company’s name from the Register of Companies if the response to the notice was not filed. The directors of such a company have no choice but to approach the National Company Law Tribunal and make an appeal to have the company’s name restored in the ROC’s Register of Companies.
Appeal to NCLT for the name of the company to be restorated
Within three years of the ROC’s decision, any aggrieved party may file an appeal with the Tribunal. If the Tribunal determines that the removal of a company’s name from the Register is unjustified, it may issue an order to restore the company’s name to the Register of Companies after providing the ROC, the company, and all parties involved with a reasonable opportunity to make representations and be heard.
Application to NCLT by ROC for the name of the company to be restorated
If the ROC is satisfied that the company’s name has been removed from the Register of Companies either accidentally or due to incorrect information provided by the company or its directors, it may apply to the Tribunal for the company’s name to be restored within three years of the date of the order dissolving the company. Application for the company’s name to be restored by the company, any of its members, creditors, or workers to the NCLT: If the Tribunal determines, in response to an application made by a member, creditor, or worker who has been harmed by the company having its name removed from the Register of Companies within twenty years of the notice of dissolution’s publication in the Official Gazette:
(a) The company was operating or conducting business at the time its name was struck off;
(b) if, in any other case, it is only necessary that the company’s name be reinstated in the Register of Companies, the court may order the company’s name to be reinstated in the Register of Companies. Further, the Council may likewise pass a request and give such different headings and make such arrangements as considered only for putting the organization and any remaining people similarly situated as almost as might be as though the name of the organization had not been struck off from the Register of Organizations.
Within thirty days of the date of the order, the company is required to file a copy with the ROC. Upon receiving the copy, the ROC will restore the company’s name to the Register of Companies and will issue a new certificate of incorporation.
FAQs
- How long it take to strike off a company?
A company’s formal dissolution usually takes at least three months, but it can take much longer if the process is complicated. However, a company will cease operations within three months of the Gazette’s publication of the winding up notice.
- When a company can be struck off?
The following scenarios may result in the company’s termination when a company hasn’t started doing business within a year of being formed. When a company has not applied for the status of a dormant company within the two immediately preceding financial years and has not been actively engaged in any business or operation. In such a case, the company’s name will either be struck off by the registrar on his own or it will voluntarily apply for the strike off.
- Who can file an appeal for revival of the company?
Within three years of the date of the Registrar’s order, any aggrieved party may file an appeal. Within three years, an appeal may be filed by the Registrar if the Registrar is satisfied that the Company’s name has been removed from the Register of Companies either intentionally or due to incorrect information provided by the Company or its Directors. Within 20 years of the date of publication of the notice of strike off in the Official Gazette, either the company or any member, creditor, or worker who has been harmed by the removal of the company’s name from the register of companies may file an appeal.
- What documents are required for the restoration of the company?
(i) Certificate of incorporation
(ii) MOA
(iii) Audited financial statement from the date of strike off
(iv) Bank statement
(v) The striking off order of the Registrar of Company.
(vi) Affidavit verifying the petition.
- What happens when a company is restored?
The effect of successful restoration is that the company will be deemed to have continued in existence as if it had not been dissolved or struck off from the register.
- Who can file appeal for revival of company?
(i) Aggrieved person by the order of ROC
(ii) By Regist
(iii) By company
