Fast Track Exit of Company (Inoperative Co’s)
Relevant Sections
under Companies Act 2013;
Section 248, 249, 250,251, 252 under Chapter XVIII
(Removal of names of Companies from the Register of Companies)
Effective Date;
26th December 2016
Brief Idea about Striking off Company Name under Companies Act
2013
Earlier under Companies Act 1956, there was eForm FTE under which
companies used to apply for striking off name from the register of Companies as
the companies were inoperative since incorporation and not doing any business
from last one or two years but on 26th December 2016, MCA came up
with a notification wherein Section 248 to Section 252 got notified and new
procedures and new forms have come up for striking off name of the company
voluntarily.
Eligibility Criteria;
Check I: It is important to note that striking off voluntarily can only be
applied by small companies and following list of companies are not eligible to
apply for striking off;
1.
Listed Companies
2.
Companies registered under section 8
3.
Companies having charges which are pending for satisfaction
4.
Companies whose application for Compounding is pending
5.
Companies against which any prosecution for an offence is
pending in any court
6.
Vanishing Companies
7.
Companies that have been delisted due to non-compliance of
listing regulations or listing agreement or any other statutory laws;
8.
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.
9.
Companies which have accepted public deposits which are either
outstanding or the company is in default in repayment of the same;
10. Companies where
notices under section 234 of CA 1956 or 206 or 207 of the Act, 2016 have been
issued by the Registrar or Inspector and reply thereto is pending or report
under section 208 is pending or where any prosecution arising out of such
inquiry or scrutiny, if any, is pending with the court.
Check II:
Only the Companies which have;
a.
failed to commence its business within one year of
its incorporation; OR
b.
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
can apply for striking off of Company
From where to check;
Check the Financial Statements of the Company last
filed or if the master data shows that there is no annual return filed since
incorporation along with check the bank statement of the company to know the
real situation.
Check III:
The Company can not
made any application for the strike off of the Company if any time in the
previous 3 months the company has done any of the below mentioned workings:
i.
Has Changed its name or
ii.
Has Shifted its registered office from
one State to another;
iii. has made a disposal for
value of property or rights held by it, immediately before cesser of trade or
otherwise carrying on of business, for the purpose of disposal for gain in the
normal course of trading or otherwise carrying on of business;
iv. 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;
v. has made an
application to the Tribunal for the sanctioning of a Compromise Or Arrangement
and the matter has not been finally concluded; or
vi. is being wound
up under Chapter XX, whether voluntarily or by the Tribunal.
eForms to be filed
for Striking off of the company;
-
eForm MGT 14
-
eForm STK 2 having attachments like Form STK 3
& Form STK 4 and other attachments
Steps
to be followed to apply for Striking off of the company;
Step 1: Board Meeting:
Passing of Board
resolution for the purpose of Strike off of Company, to call General Meeting and
to authorize any director of the Company to file application with Registrar of
Companies
Step 2: Check for Liabilities in Company and closing of Bank Account(s), if any:
After
passing of Board resolution if there is any liabilities in the Company. Company
will set off all the liabilities before next step and close the bank accounts,
if any. Check fr Secured Loans or unsecured Loans and the Balance sheet of the company, if available.
Step 3: Extra Ordinary General Meeting:
Company
will hold the Extra Ordinary general meeting of members of the Company and pass a resolution
for strike off of Companies with the approval of 75% of members as per paid up
share capital of the Company. After passing of Special resolution company will
file MGT-14 within
30 days of passing Special Resolution.
Step 4: Filing
of eForm STK 2 with necessary attachments:
Application
for striking off of Company shall be made in eform STK-2 . E-form STK-2 shall be signed (Affixation of
DSC) by a Director. Director should be authorized by the Board for such
purpose. Also, the form has to be attested by the Professional. Government fees for filing
eForm STK 2 is Rs. 5000/-. The form shall accompany the following documents/
attachments;
Attachment –
STK-2:
i.
Indemnity Bond from Every Director
in format as prescribed in Form
STK-3(Same as was done under FTE)
ii.
Statement
of Accounts certified by CA. Statement should not be older than 30 days from
the date of application. (Same as was done under FTE)
iii.
An
Affidavit from every Director as prescribed in Form STK-4(Same as was done under FTE)
iv.
CTC
of Special Resolution duly signed by each Director (Newly added)
v.
Statement
regarding pending litigations, if any, involving Company (Same as was done
under FTE)
vi.
NOC from the
appropriate concerned authority, if required (RBI, IRDA, Housing Finance, SEBI
etc.) (Same as was done under FTE)
Place
of application on Website:
Earlier in eForm FTE the company was not required to
place copy of application at its website while vide MCA notification dated 26th
December 2016, the Company will place the copy of application on its website
till the disposal of the application. (Newly added).
But there is no clarity as if the company doesn't have website as it didnt do any business since registration, so, in that case, placing of application on website is to be complied or not?
Undertaking
from Director – Discharge of Liability:
The Registrar, if feel necessary, obtain necessary
undertakings from the managing director, director or other persons in charge of
the management of the company that the sufficient provision has been made for
the realization of all amount due to the company and for the payment or
discharge of its liabilities and obligations by the company.
Declaration
from any Director:
i.
The directors
will give following below mentioned declarations:
ii.
The application
has been in accordance with the conditions mentioned under sub section (1) and
(2) of section 248 and sub section (1) of section 249:
iii.
There is no
inspection or investigation ordered and carried out or yet to be carried out or
being carried out against the company and where inspection or investigation
have been carried out , no prosecution pending in any court arising out of such
inspection or investigation;
iv.
The company is
neither having any public deposit which are outstanding nor the company
is in default in its repayment or interest thereon ;
v.
The company does
not have any outstanding loans, secured or unsecured;
vi.
The company does
not have any dues towards income tax .VAT, excise duty, service tax or any
other duty, by whatever name called, payable to the central
government or state government, statutory authority or local authority;
vii.
All other
liabilities of the company have been settled or discharged or extinguished;
viii.
All the
requirements of the act and rules made thereunder relating to removing the name
of the company from the register of companies and matters incidental or
supplemental thereto have been complied with;
ix.
To the best of
my knowledge and belief, the information given in this application and attachment
is correct and complete;
x.
the requisite
fee has been paid.
It is
important to note that eForm FTE may be available at MCA but new eform STK 2
has been notified w.e.f 26th December 2016, so it is recommended not
to use old eForm FTE for Striking off of Company. Section 248 to Section 252
got notified and new procedures and new forms have come up for striking off
name of the company voluntarily.
