Strike off company
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Strike off company

Strike off company means removing a company’s name from the firm’s register maintained by the registrar (herein, after referred to as registrar). The registrar may issue a notice for a strike-off of companies, or the company can apply to the registrar for a strike off. The provisions for the strike-off of the company are dealt with in Sections 248 to 252 of the companies act, 2013. 

Strike off by notice of registrar (Compulsory strike off)
If the registrar has a reason to believe that:

  • The company has not commenced any business within one year of its incorporation, or
  • The company has not pursued any business for the preceding two financial years and has not sought the status of a dormant company.

Under the process of striking off, he may issue a notice in form STK-1 to the company and its directors. This notice informs companies that their name will be removed and that they must provide the requisite documents within thirty days of receiving the notice.

Voluntary application for strike off of a company
The company may apply for strike off after extinguishing all its liabilities if:

  • The company has not commenced any business within one year of its incorporation, or
  • The company has not pursued any business for the preceding two financial years and has not sought the status of a dormant company. The application may be made in the form of STK-2.

Restriction on filing the voluntary application to strike off by a company
For the firm to be able to apply for the strike-off, it must have done any of the following in the previous three months:

  • The value of rights or property is disposed of in the normal course of carrying out business or trading immediately before the cessation of trade.
  • A company has changed its name or moved its registered office from one state to another.
  • Filed an application to the NCLT for sanction of a compromise, and the matter has not been concluded yet.
  • Other than those necessary for making an application or complying with a statutory requirement, or closing the firm’s affairs being wound up under the act. Application to strike off a company in violation of the above conditions can be punishable with a fine of 1 lakh.

Appeal to the tribunal against strike off
A company that has been sent a notice by ROC of strike off by the registrar may appeal to the tribunal against the same within three years from the date of the notice. If the tribunal believes that strike off is not justified, it may direct the registrar to restore the company’s name in the register. 

Effect of a company notified as dissolved
Following the publication of the notice in the official gazette, a company dissolved under Section 248 of the act ceases to exist on the date specified in the notice. In the event of dissolution, the Certificate of Incorporation issued by the ROC is considered null and void. Nevertheless, the Certificate of Incorporation is valid to realize the amounts due and discharge the company’s obligations and discharge the company’s liabilities.  

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