CLOSURE OF COMPANY

As per Section 248-252 of Companies Act, 2013, Any defunct company can apply for removal of its name from the Register of Companies maintained by ROC. Once an application for removal of name of the company is applied, after due verification, the Certificate of Incorporation of the company shall be cancelled by the concerned Registrar of Companies. Such COI shall be valid only for the purposes of paying off the liabilities of the company towards its various creditors. Following companies can apply for striking off its name:

1. Private Company
2. One Person Company (OPC)
3. Public Company
4. Section 8 company (After converted into Private Limited Company or Public Limited Company)

It must be noted that even a dormant company can apply for Strike off.

PRE-REQUISITES FOR REMOVAL OF NAME OF THE COMPANY:

The name of the company can be removed from the Register of Companies in the following ways:

1. Suo-Motto by ROC.
2. Voluntarily by Company.

GROUNDS FOR REMOVAL OF NAME OF THE COMPANY:

If the company

1. Has failed to commence its business within one year of its incorporation.
2. 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 Dormant Company.
3. The subscribers to the Memorandum of Company have not paid the subscription money, which they undertake to pay at the time of Incorporation and a declaration to this effect has not been filed within a period of 180 days.
4. The company is not carrying on any business or operations, as revealed after physical verification carried out by Registrar of Companies.

PROCESS FOR STRIKE-OFF OF COMPANY:

1. The company may after extinguishing all the liabilities, by a special resolution or consent of members holding Seventy-Five percent of the Share Capital, may file an application with the Registrar of Companies (ROC) for removing its name from the Register of Companies.
2. The company shall take approval from the Sectoral Regulator in case the company is governed by any Regulator.
3. The company shall file application for removal of its name from the Register of companies in Form STK-2.
4. On receiving the application from the Company, the concerned ROC shall issue public notice in Form STK-5, giving the time to the general public to raise objections if they are affected in any way by the said strike-off.
5. If no objections are received by the Concerned ROC, then it shall proceed for striking off the name of the company from the Register of Companies.
6. After being satisfied with all the documents and attachments as submitted by the company, the ROC shall issue notice for strike off the name of the company from its register of companies in Form STK-7.
7. Upon such notice from ROC, the Certificate of Incorporation of Company gets cancelled. But the COI shall be valid for discharging the liabilities of the company.

CHECKLIST FOR REMOVAL OF NAME OF THE COMPANY:

1. NOC from the sectoral regulator, if any.
2. Indemnity Bond from every director of the company in Form STK-3.
3. Affidavit from every director in Form STK-4.
4. Statement of accounts duly certified by the Chartered Accountant in Form STK-8.
5. Copy of Special Resolution passed for removal of name.
6. Statement regarding pending litigation, if any.