Critical Aspects on Strike Off Companies by ROC : Ministry of Corporate Affairs (MCA) issued a Notification dated 26th December, 2016 notifying Section 248, 249, 250, 251 and 252 of Companies Act, 2013 (Chapter XVIII). This chapter deals with Removal of Names of Companies from Register of Companies. MCA has appointed 26.12.2016 as effective date for Section 248 to 252.
This is alternative to winding up of a Company subject to statutory criterion specified under the section. This has replaced Section 560 (Form FTE) of erstwhile Companies Act, 1956.
1. Ways of Stinking off of Companies

• By Registrar of Companies on suo-motto
• By Application of Company for removal of name/ Strike off of Company

2. Type of Companies which can not be removed under these provisions:

i. Listed Companies
ii. Companies registered under section 8
iii. Companies having charges which are pending for satisfaction
iv. Companies whose application for Compounding is pending
v. Companies against which any prosecution for an offence is pending in any court
vi. *Vanishing Companies
vii. Companies that have been delisted due to non-compliance of listing regulations or listing agreement or any other statutory laws;
viii. 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.
ix. Companies which have accepted public deposits which are either outstanding or the company is in default in repayment of the same;
x. 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.

* Means a Company registered under this act, listed on stock exchange which has failed to file its returns with the Registrar of Companies and Stock Exchange for a consecutive period of 2 years, and not maintaining its registered office at the address notified with the Registrar of Companies or Stock Exchange, and none of its directors are traceable
3. Grounds of Strike off of Companies

i. A company has failed to commence its business within one year of its incorporation. OR
ii. 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.

4. Situations in which Company cant apply for Strike off:
The Company shall not made any application for the strike off of the Company if any time in the previous 3 month 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.

PROVISIONS FOR REMOVAL OF NAME OF COMPANIES ON APPLICATION OF THE COMPANY:
Obligation of Company
Calling of Board Meeting:
Company will call the Board Meeting as per Secretarial Standard 1 to pass a Board resolution for the purpose of Strike off of Company and to authorize any director of the Company to file application with Registrar of Companies.
Extinguishment of the Liabilities:
After passing of Board resolution if there is any liabilities in the Company. Company will set off all the liabilities before next step.
Calling of General Meeting:
Company will hold the 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.
Application to ROC by Company:
Application shall be made in eform STK-2 (fee Rs. 5,000/-). Following below mentioned documents will be attached in the Form STK-2. Rule 4(1)
Attachment STK-2: Rule 4(3)
i. NOC from the appropriate concerned authority, if required (RBI, IRDA, Housing Finance, SEBI etc.) Rule 4(2)
ii. *Indemnity Bond from Every Director in Form STK-3
iii. Statement of Accounts certified by CA. Statement should not be older than 30 days from the date of application.
iv. An Affidavit from every Director in Form STK-4
v. CTC of Special Resolution duly signed by each Director
vi. Statement regarding pending litigations, if any, involving Company. (Better to give in affidavit format)
* If the person is foreign national or non-resident Indian, the indemnity bond, and declaration shall be notarized or apostillised or consularised.
Certification- 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. Rule 5.
* Better to pass a Board Resolution for authorization of Director.
In case director dont have DSC:
Physical copy of STK-2 manually signed by the director authorized shall be attached with the
form STK-2.
Certification from Professional:
The e-form STK-2 shall be certified by Company Secretary in Whole time Practice or Chartered Accountant or Cost Accountant in whole time practice.
Place of application on Website:
The Company will place the copy of application on its website till the disposal of the application. [Rule 7(1)]
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:
The directors will give following below mentioned declarations:

• 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:
• 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;
• The company is neither having any public deposit which are outstanding nor the company is in default in its repayment or interest thereon ;
• The company does not have any outstanding loans, secured or unsecured;
• 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;
• All other liabilities of the company have been settled or discharged or extinguished;
• 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;
• To the best of my knowledge and belief, the information given in this application and its attachment is correct and complete;
• the requisite fee has been paid.

Obligations to ROC:
Issue of Notice for any objections:
The Registrar shall, on receipt of such application Issue a public notice in form STK-6. Such notice shall be published in following manner. Rule 7(1).

Place copy of notice on the official website of MCA on a separate link.
Published in the Official gazette
Publish in one English and one vernacular language newspaper, both having wide circulation in the state in which registered office of the Company is situated.

Intimation to Authorities for any objections:
The Registrar of Companies shall, simultaneously intimate the concerned regulatory authorities regulating the Company, having jurisdiction over the Company, viz;

Income Tax Authorities
Central Excise Authorities
Service Tax Authorities

If the authorities have any objections, they have to furnished the same within a period of 30 days from the date of issue of the letter of intimation.
Issue notice of Striking off and dissolution of Companies:
If no objections received then ROC shall issue a notice u/s 248(5) of striking off of Company and publish the same in official gazette in form No. STK-7. The copy of notice shall also be placed on the official website of the MCA.
Other Provisions:
Liability of Directors:
The liability, if any, of every director, manager or other officer who was exercising any power of management, and of every member of the company dissolved under sub-section (5), shall continue and may be enforced as if the company had not been dissolved.
Effect of Strike off:
It shall on and from the date mentioned in the notice under sub-section (5) of section 248 cease to operate as a company and the Certificate of Incorporation issued to it shall be deemed to have been cancelled from such date except for the purpose of realising the amount due to the company and for the payment or discharge of the liabilities or obligations of the company.
Appeal to Tribunal:
Any person aggrieved by an order of the Registrar, notifying a company as dissolved under section 248, may file an appeal to the Tribunal (NCLT) within a period of three years from the date of the order of the Registrar and if the Tribunal is of the opinion that the removal of the name of the company from the register of companies is not justified in view of the absence of any of the grounds on which the order was passed by the Registrar, it may order restoration of the name of the company in the register of companies.
CONCLUSION:
Due to enforcement of Section 248-252, 26th December, 2016 onwards all the strike off applications will be file in e-form STK-2. Form FTE has been demolished. No application can be file through FTE. There is also little change in process of Strike off like there is need to pass special resolution, publication of notice on website of Company etc.
Life always started to death. Company can be created and wind up. Sometimes, Idea of a company conceives, but fails to take life
A. Whether u/s 248 a Company can apply for strike off without completion of pending statutory returns.
As per section 560 of the Companies Act, 1956, Registrar of Companies may strike off the name of companies on satisfying the conditions therein. As per Section 560, a company desirous of getting its name struck off, has to apply to Registrar of companies in e-form 61. All pending statutory returns are required to be filed along with e-form 61.
In order to give an opportunity for fast track exit by a defunct company, for getting its name struck off from the register of companies the Ministry has decided to modify the existing route through e-form 61 and has prescribed the new Guidelines. The Guidelines for Fast Track Exit mode for defunct companies.
Therefore, from the above provisions it is clear that before 7th June, 2011 (FTE Scheme) if company desired to go for strike off it was mandatory to file all pending statutory returns (Annual Filing Form). But then w.e.f. 7th June, 2011 by FTE scheme a company can go for Fast Track Exit without completion of pending statutory returns, even a dormant company could apply for FTE as discussed in above question.
Latest Provisions: In the latest provisions of Section 248 and in respective rules language are same as was in section 560 of Companies Act, 1956. Section 248 states the provisions of strike off of the Company not for Fast Track Exit of the Company. Therefore, it is required for the Company to file pending Statutory Returns for strike off of Company.
One can interpret that if a Company wants to apply for Strike off u/s 248 first its have to file all the pending statutory returns.

About the Author:
(Author CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at[email protected])
Disclaimer: The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, I assume no responsibility therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not a professional advice and is subject to change without notice. I assume no responsibility for the consequences of use of such information. IN NO EVENT SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE INFORMATION.

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