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Strike off Company

Summary Documents Procedures Characteristics

Summary

We at VGC can help you Strike Off your company.

Struck off company means that a business entity has been removed from registrar of companies the official C-PACE and is no longer legally recognized as a valid business. MCA vide Notification dated 17.04.2023 has notified Companies (Removal of Names of Companies from the Register of Companies) Amendment Rules, 2023 w.e.f. 1st May 2023.

The Ministry of Corporate Affairs (MCA) has established the Centre for Processing Accelerated Corporate Exit (C-PACE) to streamline the process of removing companies from the MCA Register.

With effect from 1st May 2023, all applications under section 248(2) of the Companies Act 2013 for removal of company name shall be made to Centre for Processing Accelerated Corporate Exit (C-PACE) and not to the Registrar of Companies (ROC).

The establishment of the C-PACE will help to reduce the stress on the Registry along with keeping the registry clean besides availability of more meaningful data to the stakeholders. The C-PACE will also benefit the stakeholders by providing a hassle-free filing, timely and process-bound striking off their companyâ€™s names from the Register. The setting up of the C-PACE is part of the several measures taken by MCA in the recent past towards Ease of Doing Business and ease of exit for the Companies.

The C-PACE institution, established under sub-section (1) of section 396, shall be in operation through the Registrar of Companies (ROC) for the purposes of exercising functional jurisdiction of processing and disposal of applications.

Company can be struck off by any of the following modes:

1. Strike Off by C-PACE Suo Motu

a company has failed to commence its business within one year of its incorporation or;
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 of the Companies Act, 2013; or
The subscribers to the memorandum have not paid the subscription which they had undertaken to pay at the time of incorporation of a company and a declaration to this affect has not filed within 180 days of its incorporation under section 10A.
The company is not carrying on any business or operations as revealed after the physical verification carried out under section 12(9) of the Act.

2. Strike Off by Way of Filing an Application by the Company

A company through its board of directors can file an application for removal of name of company from the Register of Companies on the following grounds:

Where a company has failed to commence its business within one year of its incorporation; or
Where 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 of the Companies Act, 2013; or
The subscribers to the memorandum have not paid the subscription which they had undertaken to pay at the time of incorporation of a company and a declaration to this effect has not been filed within 180 days of its incorporation.
The company is not carrying on any business or operations as revealed after the physical verification carried out under section 12(9).

Before making an application to the C-PACE for removal of the name of the company, the board of directors of the company shall take all the steps necessary in order to extinguish all its liabilities. Approval of the shareholders by way of special resolution or consent of seventy five percent members in terms of paid up share capital is also required to be taken for filing an application to the C-PACE for the removal of the name of the company from the C-PACE. In the case of a company regulated under a Special Act, approval of the regulatory body constituted or established under that Act shall also be obtained and enclosed with the application.

Type of Companies which cannot be removed under Section 248(1) & (2) of the Act:

Listed Companies;
Companies registered under section 8;
Companies having charges which are pending for satisfaction;
Companies whose application for compounding is pending for compounding of offences committed by the company or any of its officers in default;
Companies against which any prosecution for an offence is pending in any court
Vanishing Companies;
Companies that have been delisted due to non-compliance of listing regulations or listing agreement or any other statutory laws
Companies where inspection or investigation is ordered and being carried out or actions or such order are yet to be taken up or were complete but prosecutions arising out of such inspection or investigation are pending in the court;
Companies which have accepted public deposits which are either outstanding or the company is in default in repayment of the same

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Documents

Documents Required for Strike off company Documents

Copy of Board Resolution.
Certified true copy of special resolution duly certified by each of the directors of the company or consent of seventy five per cent of the members of the company in terms of paid up share capital as on the date of application..
No objection certificate from the appropriate concerned authority, if applicable.
Indemnity Bond duly notarized by every Director in Form STK-3/ STK3A.
Statement of Accounts certified by CA in Form STK-8. Statement should not be older than 30 days from the date of application.
An Affidavit by every director in Form STK-4.
Digital Signature Certificate (DSC) of directors to file form STK-2.
Self -attested KYC of directors.
Latest ITR Filled by the company.
Bank closure letter.

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Procedures

Procedure to be followed by C-PACE for striking of the name of the company on suo motu basis:-

Call and hold Board Meeting to pass Board resolution for the purpose of closure of the company under companies Act 2013.
The authorized director must prepare the necessary documents like STK-3, STK-4, STK-8, Shareholders Consent; the Latest filed ITR Copy, all Directors KYC or other documents. This is a must that statement of accounts showing the assets and liabilities of the company up to the latest practicable date (within 30 days prior to the filing of STK-2 )
The authorized director must file the form STK-2 for the closure of the company with the C-PACE. The application must be accompanied by the necessary documents and the prescribed fees INR 10,000.
After receiving the application, the C-PACE will verify the documents and if satisfied, will strike off the name of the company from its register. The strike-off will be published in the Official Gazette and the company will cease to exist as a legal entity.
After expiry of thirty days from the date of issue of the letter of intimation, if there are no objections received within thirty days from the general public or respective authority and unless cause to the contrary is shown by the company, the C-PCAE can proceed to strike off or remove the name of the company.
After the expiry of the time mentioned in the notice, the C-PACE can strike off the name of the company from the Register. The notice of striking off the name of the company from the C-PACE and its dissolution should be published in the Official Gazette in Form STK 7.
After the company has been struck off, any assets and liabilities remaining in the company's name will be disposed of in accordance with the provisions of the Companies Act 2013.

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Characteristics

Benefits and Characteristics of Strike off Company

Avoid Compliance
Avoid Fines
Low Cost
Strike Off is inexpensive to implement
No further requirement to file annual returns and accounts

Contact us today at info@vgccs.in to learn more about our services and how we can help your business grow.

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