Strike Off Under Companies Act, 2013
20 January 2017 • bsamrishindia.com
With notification of Section 248-252 by the MCA vide Notification No. 16/2016 on 26th December, 2016, the process of striking off the name of the Company from the Register of Companies through the Fast Track Exit often called FTE, stands revised. The “Fast Track Exit” mode and now “Strike Off” mode was introduced by the MCA to give opportunity to the defunct companies to get their names struck off from the Register of Companies.
Eligibility Criteria for Companies to opt for Strike Off:
The following companies are eligible for opting for strike off:
- A company which has failed to commence its business within one year of its incorporation; or
- A company which is not carrying on any business or operation for a period of 2 immediately preceding financial years and has not made any application within such period for obtaining the status of a dormant company under section 455,
Modes of Strike Off
There are two modes of Strike off:
- Suo moto by the Registrar of Companies (Section 248(1)):
For reasons that the company has failed to commence its business within one year or had not been doing business or operation for last two financial years.
- By way of Application by the Company (Section 248(2)):
The Company can file an application voluntarily with the Registrar of Companies for Striking off the name of the Company. The grounds for voluntarily making such an explanation by the company remains the same as is mentioned in the 1st mode, i.e. the company has failed to commence business or had not done any business for last two financial years.
Here in this blog, we have discussed this second mode.
As per the provisions of Section 248-252 of Companies Act, 2013 read with Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016, a company may file an application for strike off as detailed herein below:-
- A company may file an APPLICATION in the Form STK-2 (shall be accompanied by certain prescribed documents) along with the fee of Five Thousand Rupees for removing the name of the company from the Registerof Companies, after extinguishing all its liabilities.
- The main ingredients for such an application are:
- Application in form STK-2
- Government filing fees: INR 5,000/-
- Copy of Board resolution authorizing the filing of this application;
- A statement of accounts showing nil assets and liabilities of the Company which shall be not more than thirty days before the date of application and certified by a Chartered Accountant
- Shareholder’s approval by way of Special Resolution
- In the case of a company regulated by any other authority, approval of such authority shall also be required.
- Indemnity bond [to be given individually or collectively by the director(s)] in Form No. STK-3;
- Affidavit in Form No. STK-4
Companies on whom Strike off under Section 248 is Not Applicable
The guidelines does not inter-alia cover
- Listed companies;
- Companies that have been delisted due to non-compliance of listing regulations or listing agreement or any other statutory laws;
- Vanishing companies;
- Companies where inspection or investigation is ordered and being carried out or actions on such order are yet to be taken up or were completed but prosecutions arising out of such inspection or investigation are pending in the Court;
- Companies where notices have been issued by the Registrar or Inspector (under Section 234 of the Companies Act, 1956 (old Act) or section 206 or section 207 of the Act)and reply thereto is pending;
- Companies against which any prosecution for an offence is pending in any court;
- Companies whose application for compounding is pending;
- Companies which have accepted public deposits which are either outstanding or the company is in default in repayment of the same;
- Companies having charges which are pending for satisfaction; and
- Not-for-profit Companiesregistered under Section 25 of the Companies Act, 1956 or section 8 of the Act.
Some other facts to consider
- If there is pending prosecution against the company and its directors: If the pending prosecutions are only for non-filing of Annual Returns under section 92 and Balance Sheet under section 137 of the Act, such application may be accepted provided the applicants have already filed the compounding application. However, steps for final strike of the name of the company will be taken only after disposal of compounding application by the competent authority.
- NOC from Tax Authorities: NOC is not required from Income Tax / Sales Tax / Central Excise / other Govt. authorities. But all directors need to confirm that there are no dues pending against Company with any such authorities. And MCA will send notice to the Income Tax / other authoritiesenquiring whether they haveany objection for striking off the name of the said Company.
- Manner of notarisation, apostilled or consularisation of indemnity bond and declaration in case of foreign nationals or non-resident Indians: As provided under STK rules, if the Director of the Company applying for striking off, is a foreign national or non-resident Indian, the indemnity bond and declaration shall be notarised or apostilled or consularised in the country of the foreign national.
- Stamp Duty: Stamp Duty is required to be paid on Affidavit and Indemnity Bond as per respective State Stamp laws.
- Make sure that the company does not maintain any bank account as on the date of filing application and also does not have any assets and liabilities.
Brief procedure followed after filing of application for Strike off
- Where a company has filed an application (e-form STK-2), a public notice shall be issued by ROC (Form STK-6) inviting objections to the proposed Strike off, if any. The objections are to be sent to the respective ROC within thirty days from the date of publication. The notice shall be placed on the website of Ministry of Corporate Affairs, published in the Official Gazette and published in a leading English newspaper and at least in one vernacular newspaper where the registered office of the company is situated. Application shall also be placed on the website of the company, if any.
- Before striking off, ROC shall satisfy itself that sufficient provision has been made for realisation of all amounts due to the company and for the payment or discharging of its liabilities.
- Notice of striking off and dissolution of company – After having followed and dealt with the above steps, the Registrar shall strike off the name and dissolve the Company. Notice of striking off and its dissolution to be published in the Official Gazette (Form STK 7). The published notice shall be to the effect that the company’s name has been struck off the register of companies and the said company dissolved with effect from the date (mentioned therein). The same shall also be placed on the official website of the Ministry of Corporate Affairs.
Dear Team,
If there are Reserves and Surplus, in the balance sheet and similar amount in Cash and cash equivalents, rest all being zero. can the company proceed with voluntary strike off
Dear Reader,
If the capital is equal to loss, ie. the net capital has eroded, the company can proceed with strike off application. For any specific guidance on your case, you may like to share your financials with us.
Actually Sir We have incorporated a pvt. ltd. company and also filed INC-20A and It has been less than 1 year our company has been incorporated but now we want to strike off the company and I saw that few sites mentioned that we need to wait for 2 years for strike off but we want to strike-off now as now we don’t even have money to pay for upcoming compliances so please help me how can we do the same ?
Dear Reader,
Section 248(1) of the Companies Act, 2013 empowers the Registrar of Companies (RoC) to remove a company’s name from the register on certain grounds. These include:
1. Not carrying on any business or operation for a period of two preceding financial years or
2. Failure to commence business within one year of incorporation.
Since your company has filed Form INC-20A (commencement of business), the provision of “failure to commence business” will not apply but you can still opt for voluntary strike-off under Section 248(2), which allows the company itself to apply for removal by a special resolution or consent of seventy-five per cent members in terms of paid-up share capital and it is no longer in operation and has no assets or liabilities.
The confusion might arise from Section 248(1) (c), which allows the RoC to strike off a company suo moto after two years of non-operation. However, Section 248(2) allows voluntary strike-off at any time if the company meets the required conditions (i.e., no assets, liabilities, or operations).
The Company shall apply by filing Form STK-2 with the required supporting documents including but not limited to a nil statement of accounts and affidavits from all directors.
If a company has been struck off, can its assets be attached in an execution proceeding elsewhere?
Dear Reader,
If the Company has been struck off, it does not own any assets. There is no provision in Section 248 of the Companies Act, 2013 which deals with ownership of the assets of Struck off companies. Further, it may please be noted that the shareholders of the company are not the legal heirs of the company and hence the assets do not belong to the shareholders as well. Since the struck off company does not own any assets, situation of attachment of its assets in any other execution proceeding do not arise.
Considering the limited facts shared by you, it would not be feasible to provide a tailored advice in your case. In case you require any professional assistance in any ongoing proceedings, you may connect with us with full details of your case on info@bsamrishindia.com.
We have share capital of Rs4,00,000 and negative reserve and surplus of Rs 5,92,459 and current liability of Rs 2,68,348 on the liability side and cash & Bank balance of Rs 75,889 on the asset side. Is it possible to prepare nil statement of accounts for strike off?
Dear Reader,
Please note that in order to make an application for strike-off under Section 248 of the Companies Act, 2013, a statement of assets and liabilities (prepared as on 30 days prior to the date of making the application) reflecting nil assets and liabilities is required to be submitted with the Registrar.
Therefore, all liabilities should be paid off and all the bank accounts of the Company should have been closed before making the application (a declaration this regard is also required to be filed with the Registrar at the time of making the application).
Since in your case, the Company has a balance of INR 75,889/-in its bank account, it cannot apply for strike off unless all the assets are exhausted and the capital is eroded.
For further assistance in this regard, you may seek professional advice.
Please send me details of accounting entries to be passed to make Assets and Liabilities Zero, for applying strike off of Company
Dear Reader,
Please connect with us for professional assistance in this matter.
Our company name is Urbanova Edifice Private Limited. It was incorporated in 2015 however we have not had any transactions since covid beginning. So the working capital of 18Lakhs that the director had given to the company has been returned to the director. Right now the company is showing as “strike off” on the MCA portal. How long does the directors have to wait before starting a new private limited company
Dear Reader,
We are assuming that striking off has been done voluntarily by the Company. As per Section 248(2) a company may, after extinguishing all its liabilities, by a special resolution or consent of seventy-five per cent members in terms of paid-up share capital, file an application in the prescribed manner to the Registrar of companies for removing the name of the company from the register of companies on all or any of the grounds specified in sub-section (1).
Further, Directors at any time after striking off the Company can incorporate a new private limited company as no specified time is prescribed in law for the same.
You may contact us for professional assistance in this matter.
If a private limited company has 1 foreign director. Is it mandatory to sign same Indemnity bond i.e., STK-3 or both directors can affidavit STK-3 separately. (one in India for Indian Directors & another in Foreign national for Foreign director) or he need to be signed with the Indian directors in India or Indian director in Foreign National ?
Dear Reader,
It is not mandatory to sign the indemnity bond jointly. Both the directors can execute separate STK-3 at their place of residence. Care must be taken to get the documents notarized / appostilled depending on the place of residence of foreign director.
Hi,
We have started an LLP in 2018 (2 partners) but we haven’t carried any business till now. Even we don’t have any assets or liabilities, not even a bank account. Now we want to close the LLP and strike it off but our filing team is saying we need to pay all the due’s as we haven’t filed any forms.
Could you please let me know what we can do , so that we don’t end up paying huge amount.
Thanks
Dear Reader,
Clause (I) of sub-rule 1A of Rule 37 of LLP (Amendment) Rules 2017 states that LLP shall file overdue returns in Form 8 and Form 11 up to the end of financial year in which the LLP ceased to carry on the business or commercial operations before filing Form 24.
You can form an opinion from the above quoted Rule that if the LLP has never carried out any business since its formation, there shall not be any requirement to file the overdue returns.
In case you require any professional assistance, you may contact us.
We have share capital of Rs6,00,00,000 and negative reserve and surplus of Rs 4,62,34,476 and current liability of Rs 3,80,710 on the liability side and cash balance of Rs 1,41,46,234 on the asset side. Is it possible to prepare nil statement of accounts for strike off?
Dear Reader
Please note that in order to make an application for strike off under section 248, the statement of assets and liabilities prepared as on 30 days prior to the date of making the application should reflect nil assets and liabilities. Therefore, all liabilities shall be paid off before making the application.
Also, the company should close all its bank accounts before making the application. A declaration in an affidavit stating that the company does not have any operational bank accounts is filed with the Registrar at the time of making the application. Since your company is having INR 1,41,46,234/-in the bank account as asset, it cannot apply for strike off unless all the assets are exhausted and the capital is eroded.
Your company may go under Voluntary Liquidation under Section 59 of the Insolvency and Bankruptcy Code, 2016, as there are adequate surplus funds available in the company (i.e., after meeting all liquidation expenses, the remaining amount (if any) will be distributed to the shareholders). You may refer to our blog on Voluntary Liquidation for a better understanding.
For assistance in this regard, you may connect us to seek professional advice in this matter.
Hi,
We have incorporated a company but don’t want to commence any business. Just want to close it. We don’t mind disqualification of directors as no plans of doing further businesses.
For ROC to suo moto strike off, is it required to maintain DIN status active?
Dear Reader,
Please note that it is not required to maintain the DIN status active for suo-moto strike off of the company by the ROC. Failure to reply to the strike off notice by ROC shall attract disqualification of Directors for a period of 5 years. The DIN would be deactivated and it will lead to non-filing in other companies too in which person is a director. Also, a person with deactivated DIN cannot register a new company or be a director in any other company.
You mentioned that “A company need not open a bank account if it intends not to commence any business and apply for strike off.”
–> in this case how to furnish ITR filing? Because in ITR6 filing its mandatory to mention bank account.!
Can it be any personal bank account?
Or is it okay if we skip to file ITR since business not at all commenced.
Dear Reader,
Since the company has not commenced any business, it is not mandatory to file ITR before applying for strike-off. In such cases, a declaration / clarification from the Director to this effect can be attached as an optional attachment to STK-2.
Can a company with partly paid shares apply for strike off of name from ROC or will it have to first make those shares fully paid and then apply for strike off
Dear Reader,
The Companies Act, 2013 does not mandate that, before filing of application for Strike off u/s 248 that the Company needs to mandatorily require to call the unpaid amount on partly paid up share before application.
A Strike Off Application was made on 10 april 2022. MCA rejected the form and directed “NO Cancellation” because 2 years have not completed since the closure of business.
Now what all proceedings shall be done by company in order to re-instate the business considering the fact that resolutions regarding closure of business have already been passed in EGM.
Shall company call for another EGM / Board meeting to resume business.
Dear Reader,
A company may go under Strike off if:
• it has failed to commence its business within one year of its incorporation; or
• it has not carried on any business or operation for a period of two immediately preceding financial years.
In view of the above, it can be concluded that in order to apply for a strike-off, you must first ensure that your company has not carried on any business or operation for a continuous period of two immediately preceding financial years, and only then can you file an application for the strike-off of the name of the company in form STK-2.
As it is unclear from your query whether the company wishes to go for a strike-off or wants to reinstate its business you are advised to seek professional advice in this matter.
Company was formed in 2019. INC20A was filed but no business was done. In May, 2020, applied for strike off. In 2022 Feb, company is in striked off status on MCA portal. ITR for AY 2020-2021 was filed. Is it mandatory to file now AY 2021-22 ITR given that company is already striked off ?
Dear Reader,
The removal of name of companies from the register of Registrar of Companies is governed by Section 248- 252 of Companies Act, 2013. Section 250 of Companies Act, 2013 provides that where a company stands dissolved under section 248, it shall on and from the date mentioned in the notice under sub-section (5) of that section 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 realizing the amount due to the company and for the payment or discharge of the liabilities or obligations of the company.
Thus, on close perusal of the language of Section 250 it can be interpreted that the company cannot escape from its liabilities on the ground that it has been dissolved. Consequently, the status of the company being shown as dissolved on the MCA data will not Suo-moto absolve the company from the requirement of fulfilling its obligations under other regulatory provisions.
In your case, the company is required to file its Income Tax Return till the time the company intimates the Income Tax Authorities about its status and obtains their acknowledgement on the same.
How can we inform income tax authorities about company’s strike off status so that we can stop filing ITR every year?
Paid up capital 50 lacs losses 15 lacs bank balance 35 lacs. wants to strike off. what to do with bank balance.
please throw some light.
Dear Reader,
There are two ways to close the company; one is to Strike off under Section 248 of the Companies Act, 2013 and the other is through Voluntary Liquidation under Section 59 of the Insolvency and Bankruptcy Code, 2016.
A company may go under Strike off if it has failed to commence its business within one year of its incorporation or if it has not carried on any business or operation for a period of two immediately preceding financial years. However, in this process, the funds are to be utilized for meeting the external liabilities, not for paying back to the shareholders.
Further, a company may go under Voluntary Liquidation if there are adequate surplus funds available in the company (i.e., after meeting all liquidation expenses, the remaining amount (if any) will be distributed to the shareholders).
You may refer to our blog on Voluntary Liquidation for a better understanding.
Further, you are advised to seek professional advice in this matter.
sir company status under striking off ,
can provide the letter for roc for filling annual return and related filling i prepare balance sheet
Dear Reader,
As per the second proviso of Rule 4(1) of the Companies (Removal of Name of Companies from the Register of Companies) Rules, 2016, an application for strike off of the name of Company in form STK-2 shall not be filed by the Company unless it has filed overdue returns in Form AOC-4 and MGT-7, up to the end of the financial year in which the company has ceased to carry its business operation.
Though the facts of the case are not clearly cited by you, we assume that your Company filed the application in Form STK-2 after it ceased to carry on its business operations. Thus, as per our understanding, there is no requirement for filing of annual forms with Registrar.
1. If we don’t file INC 20A then can we apply for STK-2 soon after 6 months of incorporation? will there be any actions against director/shareholder?
2. Is there any way to close the company soon after incorporation if we don’t want to start business?
Dear Reader,
1. Where the Company has not received subscription money and a period of 180 days has elapsed, then the Corporate Identification Number (CIN) of the Company will be deactivated due to which the Company is not able to file Form STK-2 and, thus, the company is required to file Form INC-20A before the filing of Form STK-2. Hence, after the filing of Form INC-20A, the Company is required to wait for a period of 2 years in order to become eligible for strike off u/s 248(1)(d).
2. Where the Company has not received the subscription money from its subscribers nor opened the bank account, it can apply for a strike-off within the period of 180 days of its incorporation by making an application in Form STK-2.
Hi Sir,
I am also in similar situation.
Incorporated a company 2 months ago. Not yet filed INC20A.
Upon reading your comment I directly called ROC and asked if we can file STK-2 within 180 days of incorporation if not filed INC20A.
But they denied and informed we can’t file STK-2 until 1 year of incorporation.
Please let me know to whome we have to reach for accurate information in this regard?
Dear Reader,
Kindly note, as per section 248(1) read with section 10A(3) of the Companies Act 2013, where a company has not received the subscription money from its subscribers nor opened the bank account, it can apply for a strike-off within the period of 180 days of its incorporation by making an application in Form STK-2. After conclusion of this period of 180 days from its incorporation, form INC-20A shall be filed before filing of form STK-2. The legal scenario as suggested herein could also be derived through the FAQ’s on CFSS as answered by the MCA, wherein namely FAQ No. 19 also suggests the similar legal stance.
To know more, please visit our blog FAQ on Strike off : When Subscription Money is Not Paid.
With respect to your case, please note, you may enquire with the concerned ROC through a clarification letter explaining your case along with the above-cited legal provisions.
Dear Sir, at the time of strike off is there any mode specified for extinguishing the existing liabilities?
Dear Sir,
The company will be required to attach a statement of account showing nil assets and liabilities duly certified by Chartered Accountant with e-Form STK-2, prepared not more than 30 days prior to filing the application.
Further, there is no specific mode prescribed under the Companies Act, 2013 for extinguishing such liabilities and the company may extinguish its liabilities by paying them off or settling them before going for strike off.
Company had applied for strike-off via STK-2, 3 years ago. Public notice (stk-6) was published in 3 years ago. But, still the status is “Under process of striking off” in master data in the website. Is there anything needed to be done?
As per Rule 7 of the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016, the notice of such application shall be placed on the website, if any, of the Company, till the disposal of the application.
Further, where the application is completed and other requirements under the provisions are complied with, the Company is not required to take any further step in this regard, unless directed by the ROC.
In case of no further action is taken by the ROC, the Company may raise a ticket with the MCA to identify and resolve the issue(s) pending which, the application has not been disposed off.
SIR, I HAVE APPLIED FOR STRIKE OFF IN FORM STK – 2 ON 15.01.2021 WITH ALL ATTACHMENTS i.e. STK- 3 – 11.01.2021, STK -4 – 11.01.2021, STK -8 – 05.01.2021, RESOLUTION – 05.01.2021, MOA BUT HAVE RECEIVED QUERY WITH REMARK OF SHORTER PERIOD NOTICE REQUIRED AND IS SENT FOR RESUBMISSION. CAN U PLEASE SUGGEST WHAT IS THIS QUERY ABOUT
Dear Sir,
As per provisions of section 248(2) of Companies Act, 2013, a company may, after extinguishing all its liabilities, by a special resolution or consent of seventy-five per cent members in terms of paid-up share capital, file an application to the Registrar for removing the name of the company from the register of companies.
In case the Company is obtaining approval through special resolution then as per the provision of section 101(1) of Companies Act, 2013, the general meeting of a company should be called by giving not less than 21 clear days’ notice in writing or electronic mode or it can be called by giving notice shorter than 21 days, if consent for shorter notice is accorded in writing by not less than 95% of the members entitled to vote at the meeting.
As per our understanding and in view of limited facts of the case, ROC might have raised this query because the meeting of members for the purpose of strike off is held at shorter notice.
If the above said condition is satisfied, then you are required to resubmit the e-form form STK-2 along with the shorter notice of EGM and shorter notice consent of members of the Company.
Sir, my query is the company was incorporated in 2019 and has not commenced any business and wants to apply for strike off in the month of April 2021. Do we need to file annual returns of 2020-21 first and then file for strike or can we go ahead with strike off application directly?
As per the provision of Rule 4 of the Companies (Removal of Name of Companies from the Registrar of Companies) Rules, 2016 a company can file an application for striking off in Form STK-2 only if it has filed overdue returns in Form AOC-4 (Financial Statements) and Form MGT-7(Annual returns) with the Registrar up to the end of the financial year in which the company ceased to carry its business.
Therefore, if Company did not commence its business or operation since incorporation there is no requirement to file the annual returns of the financial year 2020-21. The Company can directly file the Form STK-2 for striking off.
If paid up capital is increased just before filing strike off form, will it lead to disqualification for filing of such strike off form.
Dear Sir,
As per the provisions of Section 248 of the Companies Act, 2013, a Company may after extinguishing all its liabilities by a special resolution or with the consent of 75% of members in terms of paid-up share capital, can file an application to the Registrar for removing the name of the company from the register of companies on the following grounds:
Thus, in your case, since, the paid-up capital is increased just before filing the strike off, it signifies that Company has some business prospects/ market opportunities in hand. Therefore, it would lead to non-satisfaction of the prescribed conditions for filing an application for strike off and the Registrar may reject the filed form.
Dear Sir, A Pvt ltd company has filed Form STK-2 in FY 2019-20. Is it required to file Form AOC-4 and MGT-7 post filing of STK-2, as the status for annual filing is still active on MCA portal.
As per the second proviso of Rule 4(1) of the Companies (Removal of Name of Companies from the Register of Companies) Rules, 2016, an application for strike off of the name of Company in form STK-2 shall not be filed by the Company unless it has filed overdue returns in Form AOC-4 and MGT-7, up to the end of the financial year in which the company has ceased to carry its business operation.
As per the facts cited by you, we assume that your Company filed the application in Form STK-2 after it ceased to carry on its business operations. Thus, as per our understanding, there is no requirement for filing of annual forms with Registrar.
A private limited company has not done any business in last three year and amount is lying in Bank account or loan to group companies. Can it apply for strikeoff. There are no other liabilities. Can Company apply for strike off. Is Bank account need to be closed first.. If closed than how will shareholder will receive the capital back on strikeoff of companies.
Please note that at the time of making an application for strike off under section 248 of the Companies Act, 2013, the statement of assets and liabilities prepared not more than 30 days prior to the date of making the application which should reflect nil assets and liabilities. Therefore, before making an application, all liabilities shall be paid off and assets should be realised.
Also, a declaration in an affidavit stating that the company does not have any operational bank accounts is to be filed with the Registrar along with the application. Hence, the company should close all its bank accounts before making the application.
A company have only bank balance and no other asset or liability, and have not commenced business since incorporation. How the share capital is paid back to the shareholders of the company, under which section of the Companies Act, 2013 the shareholders will be paid back? How the share capital is treated? Can directly negative balance be shown in front of share capital in statement of accounts as no business have been commenced by the Company?
Dear Sir,
There are two ways to close the company; one is to Strike off under Section 248 of the Companies Act, 2013 and the other is through Voluntary Liquidation under Section 59 of the Insolvency and Bankruptcy Code, 2016.
A company may go under Strike off if it has failed to commence its business within one year of its incorporation or if it has not carried on any business or operation for a period of two immediately preceding financial years. However, in this process, the funds are to be utilized for meeting the external liabilities, not for paying back to the shareholders.
Further, a company may go under Voluntary Liquidation if there are adequated surplus funds available in the company (i.e., after meeting all liquidation expenses, the remaining amount (if any) will be distributed to the shareholders).
You may refer to our blog on Voluntary Liquidation for a better understanding.
Further, you are advised to seek professional advice in this matter.
A company incorporated in 2008 but never done any business since its incorporation. The company has
paid up share capital of Rs. 7 crore and negative reserves and surplus of Rs. 5 crore and 2 crore in its bank account. Also the company has no liabilities including creditors, can we go for Strike off?
As per the provisions of Section 248, a Company which is not carrying business or operation for two immediately preceding financial after extinguishing all its liabilities by a special resolution or consent of 75% members in terms of paid-up share capital can make an application for Strike-Off to the concerned RoC.
Further, please note that a declaration to the effect that the company does not have any operational bank accounts as on the date of application for strike off is to be filed with the Registrar. Hence, the company should close all its bank accounts before making the application.
DEAR SIR,
IF COMPANY HAD NO REVENUE FROM OPERATIONS SINCE LAST 2 YEARS, CAN IT GO FOR STRIKING OFF?
Dear Sir,
Pursuant to the provision section 248(2) of the Companies Act, 2013 (‘the Act’) a company may after extinguishing all its liabilities, by a special resolution or consent of 75% members in terms of paid-up share capital, file an application in form STK-2 to the concerned RoC for removing the name of the company from the register of companies on all or any of the grounds specified in Section 243(1) of the Act.
Provided 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.
Therefore if the Company has already extinguished its liabilities then the Company can go for strike off.
Dear Sir,
a Company incorporated as Private Limited on 18 Feb 2019 but did’nt commenced its business nor opened any bank account, while filing STK -2 a pop up msg is showing that “Form Filing is not allowed since Declaration for Commencement of business is not filed in INC – 20A”
so how we proceed further whether first file INC 20A with Letter saying Company did’nt commenced its business neither have any bank account so and so… or is there is any other way. request you to enlighten us.
further any penalty will impose on filing of 20A, if required to be file as company is inoperative since incorporation.
Dear Sir,
Apparently, if the Company did not file Form INC 20A, it won’t be able to file any other form with the Registrar including the application for strike off in Form STK-2.
Therefore, the Company is required to comply with the filing of Form INC 20A before proceeding with the strike-off application.
You may approach the Jurisdictional ROC on the matter.
Hi,
I have a similar case of an OPC 5 months since incorporation.
I have haven’t opened any Current Account in Bank as I do not want to commence business hence how do I file INC 20 A which actually means Certificate of Commencement of Business.
Now knowing that I can’t apply for SKT 2 without filing INC 20A .. I have following 3 questions.
1. Do I have to open a current account now plus I have to again close current account for SKT 2 or INC 20 A can be filed without having a Bank Account.
2. Will filing of INC 20 A ( Certificate of Commencement of business) disqualify my OPC to be eligible to apply STK 2 after 12 months from date of incorporation,
as SKT 2 eligibility says ” If Business has not been commenced by OPC in first year since incorporation & there has been no activity ”
3. Since no business has been done since incorporation for last 5 months.. Am I suppose to file any other compliances apart from INC 20 A & SKT 2
Your answer to each of the question above separately will give me a direction to proceed.
Need your help & looking forward for your reply.
The OPC need not open a bank account if it intends not to commence any business and apply for strike off. Subsequently, post completion of 180 days from the date of incorporation, the OPC can voluntarily apply for strike off in accordance with Section 248(1)(d) of the Companies Act, 2013. It may attach an Affidavit, in addition to other attachments, by its directors expressly stating that the Company has neither commenced its business since incorporation nor does it intend to commence in future (provide reasons) and therefore a bank account has not been opened.
No. Filing of Form INC 20A does not disqualify an OPC for application of strike off. The Bank account can be closed and STK 2 can be filed in terms of provisions of Section 248 of the Companies Act, 2013 explicitly stating the reasons for such application.
Form ADT 1 is required to be filed by an OPC within 30 days from its incorporation. However, if you wish to shut down the Company, it need not be filed.
After strike off company name of the company would be made available for new companies to use?
XYZ PVT LTD STRIKE OFF IN THE FY 2015-2016. The said company was in Hotel business.
My concern is, I want to start spice business with same name and in the FY 2020-21, i want to register with the same name with adding one word “India”
So the company name is “XYZ India Pvt Ltd”.
Can I do so, if Yes what is the provision and is there any case law or judgement?
Pursuant to Rule 8 of the Companies (Incorporation) Rules, 2014 if the proposed name is identical with the name of a company which is struck off in pursuance of action under section 248 of the Act then the same shall not be allowed before the expiry of twenty years from the date of publication in the Official Gazette being so struck off.
Therefore, in your case, the company name shall not be available unless 20 years is not expired.
I have a Private Limited Company incorporated in February 2020. The shareholders have paid share capital money and Form INC-20A has been filed in February itself. The share capital money has been kept in liquid funds. Apart from this no transaction has taken place. Now the Share holders/ Directors want to strike off the Company without commencement of any operation/business. Pl guide if this case falls under Section 284(1) (a) or 248(1)(c) i.e. I can proceed with application to strike off immediately after completion of 1 year of incorporation or I will have to wait for 2 FYs without carrying any business/operations.
As the company has not commenced any business or operation since its incorporation it can make an application for strike off under Section 248 (2) of the Companies Act, 2013 on the ground which is mentioned under Section 248 (1) (a) of the Companies Act, 2013 i.e. the company has failed to commence its business within one year of its incorporation.
Therefore, the company can make application immediately after the expiry of one year, no need to wait for two years.
Sir I want to strike off a Pvt ltd co, what should be done with the reserve & surplus in the company??
A company has to extinguish all its liabilities before filing an application for strike off under Section 248. However, if there is a substantial amount lying in the Reserves and Surplus then the Company needs to go for Voluntary Liquidation under IBC.
Hi Sir,
Can you tell me a lump sum cost that would be incurred to revive a Company which has pending Annual returns of last 8 years?
Dear Ma’am,
We will connect directly to understand.
Can I file MGT-14 after filing STK-2?
In our understanding, since Company has made an application for Strike-off, there wont be any business decision which needs to be reported in MGT-14. However, if this form relates to a transaction entered before applying for Strike-Off, then Form MGT-14 can be filed if the Form allows the CIN of the Company to be pre-filled in the Form. You can reach out to your ROC for this, if needed.
I have a company whom I wish to strike off but the issue is that the company is registered in Kolkata & due to this pendamic situation the directors are situated in Jaipur.
There is no source of procurement of stamp duty & get the affidavit notarized.
Please suggest what can be done in this scenario.
Dear Ma’am,
As per the provisions of Section 248, Stamp Duty is required to be paid on Affidavit and Indemnity Bond as per respective State stamp laws. At present, no relaxation has been issued by the Ministry of Corporate Affairs for submission of Affidavit or indemnity bond without the payment of Stamp Duty and notary.
Further, an Affidavit is a sworn statement in writing, affirming the listed facts and information. Accordingly, directors can procure the stamp paper in Jaipur and connect with Notary Public and get the same notarized.
I am currently preparing the paperwork for Strike off of an entity that has not operated since 2009. We have brought the entity fully compliant but in the past it failed to have a resident director and two shareholders – however, during such time it did not conduct any business. Can the authorities levy penalties against the directors or company for these past non-compliances, which have now all been corrected?
Pursuant to Section 149 of the Companies Act, it is mandatory for every company registered in India to have a resident director. Further, per Section 174(2), in case of resignation/ disqualification of directors which result in fall of minimum statutory limit of directors per Act, the remaining director (s) can act for the purpose of increasing the number of directors to that or for summoning a general meeting of the company and for no other purpose. In case the directors failed to do so or failed to appoint a new resident director, we understand that the Company can be liable for action under Section 172 of the Act.
Further, for non-compliance with the minimum shareholders’ requirement, pursuant to section 3A, if the company continued to carry on business for more than 6 months while the number of the member is reduced below the minimum requirement (i.e. 2 in your case), the present members during that time shall be severally liable for the payment of the whole debts of the company contracted during that time, and maybe severally sued therefor.
Thus, in our view, there is a probability that ROC may take a rather lenient view if Company did not conduct business during such time, however, it does not seem to erase the chances of penal actions from ROC.
A COMPANY IS INCORPORATED ON 04.02.2019 AND NOW AS NO TRANSACTION IS CONDUCTED THE DIRECTOR WANTS TO CLOSE THE COMPANY ,SO CAN WE PROCEED TO FILE STK2 OR FIRST WE HAVE TO FILE AOC-4 AND MGT-7 AND THEN PROCEED TO FILE STK-2? PLEASE GUIDE US
As per the provision of Rule 4 of the Companies (Removal of Name of Companies from the Registrar of Companies) Rules, 2016 a company can file an application for striking off in Form STK-2 only if it has filed overdue return in Form AOC-4 (Financial Statements) and Form MGT-7(Annual returns) with the Registrar up to the end of the financial year in which the company ceased to carry its business.
Therefore, if Company did not commence its business or operation since incorporation there is no requirement to file the returns. The Company can directly file the Form STK-2 for striking off.
my bank account has been freezed because company has been struck off.
what happens to money in current account , If i file a restoration application with NCLT and court rejects the petition.?
Sir, we advise you to seek professional guidance in this matter.
Did U find out the way Or got advise what will happen to money in current account is there any way to get back that money if we dont want to restore the company again
The money in the Bank account of a struck off company cannot be withdrawn. When the company is struck off by the Registrar, the bank account is frozen and can only be accessed and retrieved only if it has been restored by the order of NCLT.
Dear Sir,
I am in process of striking of a private limited company which has 1 Resident Director and 1 non resident director. Also, out of total 3 shareholders, 2 are non resident shareholders and 1 resident shareholder.
Apart from appositing the Affidavit and Declaration from the foreign country of the non resident director, do I have to ensure any other compliance because 2 of my shareholders are also non residents.
The company should extinguish all its liabilities and close its bank account. There needs to be a special resolution passed for approval of strike-off. The General meeting for the same has to be held in India with the participation of 2 non-resident shareholders. For more details please do read our blog https://bsamrishindia.com/strike-off-under-companies-act-2013/.
I have a query while filing STK-2 for a company registered in Feb 2019, there is an error showing you have not filed declaration on commencement of business in INC-20A. The company has never start business and against 1 lakh share capital they have deposit INR 50k only, there was no any single entry apart from this. Now what is the solution to close this company under FTE mode?
Payment of subscription money to shares subscribed through MOA, is a contractual liability on the promoters of the Company. If the promoters fail to do so, it is a breach of contract and legal actions can be initiated. Further, unless the Company has duly filed Form INC-20A, it cannot proceed for strike off. The ROC can suo-moto strike off the Company on the ground of non-filing of INC-20A.
Im facing a similar situation. SCN u/s 10A has been received. and form STK-2 is not being allowed to be submitted. Company has not taken commencement as subscribers did not bring any money since may 2020. No bank accnt, no operations here. how to proceed with this strike off pls suggest
Unless the form INC-20A is not filed, the Registrar of Companies (ROC) shall not allowed to file the form STK-2. Therefore, the Company needs to file the form INC-20A before proceeding with the strike off. However, if the Company had received show-cause notice (SCN) for non-compliance of section 10A of the Companies Act, 2013, and the reply of the SCN is not given by the Company within the prescribed time limit then the ROC can exercise the power as conferred under Section 248(1)(d) of the Companies Act, 2013 i.e. ROC may suo motto strike off the name of the Company.
I ALSO FACED SAME ISSUE
Hi Team,
I have a query regarding dividend payment. Whether entire surplus in Profit and Loss Account and the expected profit for the current year (500+100) can be paid as dividend. If not ,what is the maximum amount that I can pay as dividend.
As per Section 123 of the Companies Act 2013, No dividend shall be declared or paid by a company for any financial year except out of the profits of the company for that year arrived at after providing for depreciation or out of the profits of the company for any previous financial year or years arrived at after providing for depreciation in accordance with the provisions of that sub-section.
Comment 1:
Hence, dividend has to be declared after calculation of actual profit and not out of expected profit of the Company. Further, In computing profits any amount representing unrealised gains, notional gains or revaluation of assets and any change in carrying amount of an asset or of a liability on measurement of the asset or the liability at fair value shall be excluded.
Comment 2:
Maximum amount that can be paid is amount available as surplus in Profit and Loss Account after providing for depreciation and setting off losses, if any.
Dear Sir,
One Pvt Ltd Co. has a Public Ltd Co. as its shareholder. The name of public company has been struck off from the ROC due to non-filing annual returns or balance sheet for over 9 years and they have no intention to revive it.
Since Public Co. has been struck off now, so what will happen to its investment in Private Limited Co.? Will those shares go to Govt.?
And is Private Co. required to do any compliances in this regard?
Dear Sir,
The provisions of the Companies Act, 2013, are silent about the treatment of assets and liabilities in case of companies which have been struck off by the RoC. However, Article 296 of the Constitution of India states that the property of an estate dying without leaving lawful heirs passes to the government by “escheat” or as “bona vacantia”. Further, in various judicial pronouncements (for eg:- Peirce Leslie and Co. Ltd. vs. Violet Ouchterlony Wapshare ) it has been held that any interest arising out of dissolved company must necessarily vest in the Government by “escheat” or as “bona vacantia”. Accordingly, in the given case, the investment held by the public limited company would vest with the government.
Re the compliances to be done on the part of Private company, you are advised to seek professional guidance.
Dear Sir/Madam,
If a small company which is non functional since the establishment is struck off by the ROC what will be the legal consequences for the directors (besides disqualification). How much amount may be fine for each director. Kindly reply.
Thanking in advance.
Since earlier strike off included deactivation of DIN, therefore besides disqualification, DIN may also be deactivated by the RoC. Further, no penalty provided for the directors under the Companies Act, 2013 in this case. However, there are legal remedies to remove such disqualification.
In a Public Unlisted Company, Director’s unsecured loan is pending and Company wants to strike off the Company. There is no asset and liability in the Company except negative balance in Reserve and surplus.
What is the shortest way possible to remove unsecured loan from director.
Is waiver by director is allowed? Then what will be income tax perspective?
Dear Ma’am,
As a prerequisite to filing of Form STK-2, the company should not have any asset or liability. In case the Company and the Director both wishes to waive off the loan from Director, it could be done as a part of their mutual settlement agreement. Now, if we take income tax implications with reference to the Apex Court judgement in case of Mahindra and Mahindra Ltd. 2018, the Apex court has now clarified that ‘waiver of loan’ should be treated as ‘receipt of money’ and hence such receipt of money would fall outside the purview of Section 28(iv) of the Income Tax, 1961 (dealing with taxability of perquisites) and accordingly cannot be taxable.
How about MAT liability?
As per the requirement of the provisions of the Companies Act, before making the application for strike off in form STK-2, we have to prepare a statement of accounts showing nil assets and liabilities of the Company. Accordingly, the existing MAT liability has to be paid before making the application for strike off.
Hi, my company is incorporated on April, 2019 and its NOT operational since incorporation. We need to strike off the Company. How can I show statement of solvency in this case. Because Capital is be shown as Rs. 100,000. How can I reflect my asset side? Can I show as ‘debit balance in P&L’, but the Company is not operational than how can I show as loss?
As per the provision of Section 248(1) of the Companies Act, 2013, a Company can file an application for striking off if it has failed to commence its business within one year of incorporation or if it is not carrying on any business or operation for a period of two immediately preceding financial years.
In the given situation, the Company can file an application for striking off after completion of one year. Further at the time of striking off a statement of account shall be shown as nil; however the capital amount will appear as it is so, and under asset side, the bank balance needs to be made NIL by withdrawing all the amount
Sir this is not clear. Can u please explain?
If on liabilities side there is share capital what will be on asset side??
One more question sir
If no business has been done after incorporation and 3 years have passed whether it is mandatory to file all pending returns and then apply for strike off or we can directly apply for striking off?
Dear Sir,
As per rule 4 of the Companies (Removal of name of Companies from the Register of Companies) Rules, 2016 a statement of accounts containing assets and liabilities of the Companies will be in form STK-8, for which you can seek professional assistance.
Further, for filing of the form STK-2 the Company needs to file its overdue return up to the end of the financial year in which the Company ceased to carry its business operation.
As in your case since the company has no business since incorporation therefore the Company is not required to file any return.
Sir we have incorporated a company but never filed INC-22 for registered office and 20A for declaration of Commencement of Business. The company is inactive from last 12 months i.e. from the incorporation.
We want to file STK for the relevant company.
1. Can we file STK-2 without filling the details of registered office in form INC-22
2. Can STK-2 be filled without filling declaration of commencement in e-form INC-20A
The answer to your questions will depend on certain facts such as:
Whether the Company was incorporated with a registered address or a correspondence address? If it was incorporated with a registered address, a separate filing of Form INC-22 is not required. Secondly, what is the date of incorporation of the Company? If the Company was incorporated on or after 02nd November, 2018 then filing of Form INC-20A is mandatory. This Form is to be filed within 180 days of incorporation, failing which penal provisions will be applicable.
We understand you wish to apply for strike off of this Company and as per our understanding, there is no restriction in filing Form STK-2 if INC-20A is not filed. In fact, the ROC can suo-moto strike off the Company if INC-20A is not filed, however, other consequences may follow.
ROC has sent resubmission of form STK-2 mentioning that Affidavit and indemnity bond should be stamped after signing of Statement of Asset. Now what is solution for this query. Do we need to file fresh affidavit and indemnity bond and statement of asset?
Dear Sir,
The Statement of Asset becomes the basis of giving declaration in the Affidavit and indemnity bond. Thus, such statement should be signed and dated before the Affidavit and indemnity bond.
In this case, fresh affidavit and indemnity bond needs to be filed keeping note that the date should be after the date of statement of asset.
Sir, if we go in 2020 to revival of strikeoff company(2017), then how much years return is mandatory to fill.because penalty per day per form is too high.
The Companies Act, 2013 is silent about the period of filing of Annual Returns in case of Revival of the Company, the same is dependent upon on the order passed by the NCLT.
In our opinion and considering the order passed by the NCLT, the Company would be required to file all outstanding returns for all the defaulting years along with late fees.
THERE IS NO MAXIMUM LIMIT OF YEARS BECAUSE IN INCOME TAX 10 YEARS PAPERS ARE MAXIMUM LIMIT AND NCLT HAVE POWER TO PASSED ORDER TO ROC TO TAKE RETURNS PHYSICALLY WITH FIX PENALTY AMOUNT.
It is nowhere prescribed under the Companies Act, 2013, the no. of years for which ROC may demand documents for conducting scrutiny. However, as per the Secretarial Standard a company is required to maintain its books of account for a period of 8 years immediately preceding the current year and in case, the existence of company counts for less than 8 years then it is supposed to maintain the same for all the preceding years.
Generally, bank account of the struck off companies is freezed and directors and authorized signatories are prohibited from accessing it. Further, if bank account of the company is not ceased so, it can be used only for the purpose of payment or discharge of all its liabilities and obligations and if anything remains after making payment, it will vest with the State by virtue of “bona vacantia” (various judicial pronouncements).
However, if you want to revive the Company, you can do so by applying to the NCLT and filing the pending documents with the ROC with normal fees as it would have paid if the documents were filed within the due dates, pursuant to introduction of Companies’ Fresh Start Scheme, 2020.
Sir,
whether MGT -14 is required in case of Defunct Company also?
Defunct Company under the Companies Act, 2013 means a company which is not carrying on any business or which is not in operation is called a defunct company. Further facts would be required to understand the nature of resolution passed. Nonetheless, please appreciate the following:
In case of Companies marked as Defunct by Registrar, filing of any form is not allowed. Conversely companies which have obtained dormant status can file e-forms as may be required under the companies act, 2013.
I want to know abt time limit after which its not necessary to submit financial documents at mca sites.I have not submit my documents till 2010 and in sep 2017 company was strike off.
As per Section 248 of the Companies Act, 2013 read with Rule 4 of the Companies (Removal of name of Companies from register of Companies) Rules, 2014 the Companies are required to file overdue returns in Form AOC-4 or AOC-4 (XBRL) and in Form MGT-7 up to the end of the financial year in which the Company ceased to carry its business. Therefore, in the given situation, the Company has to submit the financial statement and annual returns only upto the financial year it had continued its business.
My Private Ltd company has not filed its annual return/balance sheet for three years since it is not carrying on any business.
Now,ROC has strike off last year.
The company had opened a current account with 25k INR, now the question is how to withdraw this amount. And secondly, as I don’t want to revive the company do I have to take any action or leave as it.
The Company which is struck off by the Registrar stands dissolved from the date of publication of notice in the official gazette and its undisposed off property/assets, if any vests in the Crown as bona vacantia” i.e. state take possession subject to its rights to disclaim. This has been ruled out in various judicial pronouncements such as by Karanatka High Court in the matter of Yeshwant Raghunath Bhide vs Income-Tax Officer, by Supreme Court in the matter of Narendra Bahadur Tandon v Shankar Lal and many others.
Therefore, in your case, it may not be possible to withdraw the money from bank account unless you wish to restore your company.
Sir there is any option for strike off companies to fill their documents offline to roc without penalty charges 100 rs per day per form.And we change director and appoint new director but my ca not submit documents in mca site but our books are ok and we filled income tax return regularly.
Pursuant to the provision of Section 250 of the Companies Act, 2013 where a Company gets dissolved under Section 248, it shall from the date of publication of notice in the official gazette ceases to operate as a company and the Certificate of Incorporation issued to it shall be deemed to have been cancelled.
In view of the above, strike off companies which are dissolved by the Registrar of Companies cannot file any forms or documents due to its non-existence.
How we confirm the date of strike off of company by roc office in return
Pursuant to Section 248(5) of the Companies Act, 2013, in case name of the Company is struck off from the register of companies, it shall be deemed to be stand dissolved from the date of publication of notice in form STK-7 in official gazette. The notice shall also be placed on the website of Ministry of Corporate Affairs. Therefore, the date of publication of notice in official gazette shall be the date of strike off of company
Hii Sir,
we are going to close the LLP but have not open the bank account.
how to proceed.
As per the provisions of Limited Liability Partnership (Amendment) Rules, 2017, the application for strike off is to be filed in Form 24.
As per the requirement of the Form, an affidavit is required by the Designed Partners that LLP has not opened any Bank Account and if opened the said bank account has been closed together with certificate(s) or statement from the respective bank demonstrating closure of Bank Account.
Further, LLP would be required to file overdue returns in Form 8 and Form 11 up to the end of the financial year in which the LLP ceased to carry on its business or commercial operations before filing Form 24.
As part of a larger acquisition, we obtained a private ltd entity which had not conducted any business nor made any filings since 2008. This was not disclosed to us. We have recently brought the entity fully compliant but want to strike off as it has been non-operational for 11 years. The entity has no assets or liabilities. Are we likely to avoid penalties here? If not Can the ROC impose penalties to company that would exceed the assets of the entity?
As per section 248(2) of the Companies Act, 2013, Company can file application in Form STK-2 for the removal of its name from the register of the companies on the basis of the following grounds:
A- If the company has failed to commence its business within one year of its incorporation or
B- If the 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.
As per the information provided you, we understand the Company falls under Ground B. Thus, the Company is required to file Form AOC-4 and MGT-7 (Annual filing forms) up to the end of the financial year in which the company ceased to carry its business operations. Once, all the pending annual filings are completed and there are NIL Assets and Liabilities in the Company, it can file Form STK- 2. Since, the Company is made fully compliant, per our view, no penalties should be levied on the Company.
we have filed STK-2 form for the company on march 2019, the company was incorporated in december 2016 and was not operational. were we liable to file income tax return for that financial year i.e. 2018-2019 FY year. if yes how do we file now and if not should we surrender pan and whats the procedure for same
Yes, the Company needs to file the Income Tax Return for the financial year 2018-19, the Company can file the return now with late filing fees of Rs. 5000/- till December 31, 2019 and with a fees of Rs. 10,000/- after December 31, 2019
In my case, It is Private Limited Company, Incorporated in 2017 with two directors, now one director dead, only one director left, no body is ready to be a director in this company, the remaining one director want to strike off the company,
Is it possible that one director can file STK 2 with enclosure of death certificate of other director dead director ??
Kindly give your valuable comments in this regard.
It is not possible to file STK-2 with one director as it will lead to contravention to statutory composition of BOD as prescribed in Section 149(1) of the Companies Act, 2019 and it would not be possible to pass Board resolution with one director for approving strike off of the company because the quorum of minimum 2 directors is not satisfied.
Can you please elaborate on what can be done in this situation
Sorry, we could not understand your query. Kindly cite the complete facts of the case.
The Company was incorporated as a Private Limited Company. It has been Struck off by the ROC on the reasons of non efiling. The last Balance sheet filed was for the year ended 2009-10. The Company has not since then filed the MCA forms, IT returns etc. It has not prepared the books of accounts thereby no audit. The Company holds a flat in its name and made very insignificant transactions in its Bank Account. Please suggest procedure for revival of such company.
The provisions of the Section 252(3) states that tribunal if satisfied that was, at the time of its name being struck off, carrying on business or in operation or otherwise it is “just” can restore the name of the Company.
So, in the above case the Company may move the application on the above mentioned ground as they have flat in its name.
If after filing STK-2, MCA strikes off the Company then shall PAN of the company be automatically cancelled or we need to do anything for PAN cancellation
The PAN is not automatically cancelled even if the company is struck off. In such case one requires to write an application to the Income Tax Officer under whose jurisdiction the company’s taxes were being filed.
Hello Sir. My company is under strike orr status due to non filing of returns. I tried to file INC 22A and all returns and then close the company but INC 22A is not getting accepted. I anyway want to close this company but I do not want directors to be disqualified . What is the solution to avoid director disqualification ?
Please note that the company which is under the process of strike off are not eligible to file e-form INC 22A (“Active”).
Further, re director disqualification query, you are advised to seek the professional advice.
Hello Sir,
We intend to strike off one of our group Company. Its a private company, there has not been any business and operations since its incorporation.
As on date the Company has three shareholders, two individual and one foreign entity. The individuals are holding 34.42% of shares each and the foreign entity is holding 31.16% of shares.
In this case what will happen to the share capital/shares?
Kindly advice.
In this case how will we transfer the money after writing off the liabilities to the foreign entity shareholder?
Kindly advice.
Sir, my company is incorporated in March 2019 and I want to strike off my company,do I need to file annual return and financial statements with ROC before filling application for strike of in Form STK-2
As per section 248(2) of the Companies Act, 2013, Company can file application in Form STK-2 for the removal of its name from the register of the companies on the basis of the following grounds:
A- If the company has failed to commence its business within one year of its incorporation or
B- If the 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.
So in this case, the company has two options.
1. If the company have not started the business till now then it has to wait for atleast 1 year from the date of incorporation to be eligible to file Form STK-2.
The company can directly file the Form STK-2 without filing Form AOC-4 and MGT-7 (Annual filing forms) in this case.
2. If the company has started the business during the year then you need to satisfy the condition “B”. (i.e. first you have to close the business and then wait for 2 years to be eligible for filing form STK-2)
In above case, the company shall file the Form AOC-4 and MGT-7 (Annual filing forms) up to the end of the financial year in which the company ceased to carry its business operations.
If you are unable to fulfill any of the condition and want to close the company then you may go for voluntary winding up. But the cost of voluntary winding up is higher as compared to strike off.
how share capital on the liability side is required to be treated for the Balance sheet to be NIL in order to proceed with winding up u/s 248(2)
To strike off a Company, all the liabilities shall be paid off. Further, if the company has only Share Capital at the liabilities side, please note, it shall be set off by accumulated losses (Dr. Balance of Profit and Loss Account) on assets side to be treated as “Nil Assets and Liability” for the purpose of strike off.
Sir we have not filed our company returns since inception in 2009 as we did no business
Now we got a strike off notice ….
Can you tell tje approx penalty amount each year and if we can approach the high court to waive off the penalty….
In case the company has received a notice for strike off and you want to keep the company active and alive, the company is required to file its annual returns and financial statements for every year since its inception.
You may reply to the notice and inform the ROC that you wish to run the company and therefore file the due returns.
Form 23AC, 23ACA and 20B will be filed for the period 2009-2013 along with additional fees. Thereafter, Form MGT 7 and AOC 4 shall be filed along with additional fees. The amount of additional fees depends on the paid-up capital of the company. You may refer the help kit of the aforesaid e-forms for calculating the additional fees.
The ROC may at its discretion impose penalty as per Section 137 and 92 of Companies Act 2013 and corresponding sections in Companies Act 1956.
Approaching the High Court for waiving the additional fees would not be a feasible option as the additional fees will have to be paid in all ways at the time of updating filing.
As I am 100% shareholder in my company which was strike off in 2013… Their are no dues, liabilities on company… Can I transfer my share holding to someone else who can get all company work smoothly from ROC as I am unable due to health issues… Please reply me..
Sir, if the status of the Company is ‘Striked Off’ since 2013, it means that at present, there is no legal existence of the Company and similarly no assets/ liabilities/ share capital exist as on date. Thus, without the presence of the Company, a share certificate is just a piece of paper with no inherent value or transferability.
However, if your case is such that the Company has shut down business since 2013 and is yet to obtain the status of ‘ Strike Off’ from ROC i.e status of Company is ‘Active’ on the MCA Portal, then, you may transfer your entire shareholding to another party
Hello Sir,
We intend to strike off one of our group Company. Its a private company, there has not been any business and operations since its incorporation.
As on date the Company has three shareholders, two individual and one foreign entity. The individuals are holding 34.42% of shares each and the foreign entity is holding 31.16% of shares.
As per Section 248 of the Companies Act, before making application to ROC in STK-2 along with the all the attachments, we need to take approval of the Board and extinguish all the liabilities, after which we have to either pass Special Resolution or take consent of 75% of shareholders.
Is there any other formalities we need to comply in case of the foreign entity like informing to RBI or any other authority or we can simply take consent from all the three shareholders and proceed?
Kindly advice please.
Dear Sir,
As per the provision of Section 248 (2) of the Companies Act, 2013 read with Rule 4(2) of Companies (Removal of Name of Companies from the Registrar of Companies) Rules, 2016, every application for strike off in Form STK-2 shall be accompanied by a Non-Objection certificate from appropriate Regulatory Authority. Hence, if a Company is 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.
Since, the company has FDI, it is liable to report to RBI and it shall take a NOC from the RBI with regard to all compliances with respect to FEMA till date and the same shall be annexed with the application in STK-2.
Hello sir, please go through the following case:
Company is incorporated in 2013 and till today date share certificates are not issued. please let me know what to do in case of late issuance of share certificates and also detailed me about the back dated stamp duty and penalties thereof.
Dear Sir,
As per Section 56(4) of the Companies Act, 2013 every Company shall deliver the certificate of all securities within a period of two months from the date of incorporation, in case of subscriber of memorandum. If the same is not issued within the prescribed time then pursuant to section 56(6) of the Companies Act, 2013 the company shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees and every officer of the company who is in default shall be punishable with fine which shall not be less than ten thousand rupees but which may extend to one lakh rupees.
In case of non-payment of Stamp Duty, impounding is need to be done with Sub Registrar/Registrar of Stamps having jurisdiction over the Registered Office. Stamp Duty on Allotment of Shares is subject to State Laws. The penalty will also vary from State to State.
sir i have recieved Notice STK 01 regarding striking off the company . the company was incorporated in 2015 june and we havent done any operations since then neither any bank account has been opened. please help me out
Generally, if the directors of the company does not reply to the notice (STK-1) within 30 days, the RoC starts the process to strike off the Company.
It will result in disqualification of Directors.
If you wish not to strike off the company, you can file reply to RoC and shall complete all required compliance.
Hello sir,my company is not carrying any business since preceding two years but it has transaction in bank a/c related to non operative expense. can i apply for strike off of company under section 248?if not what is another best option to remove name of company from registrar of company.
Please note that in order to make an application for strike off under section 248 the statement of assets and liabilities prepared as on 30 days prior to the date of making the application should reflect nil assets and liabilities. Therefore, all liabilities shall be paid off before making the application.
Also, the company should close all its bank accounts before making the application. A declaration in an affidavit stating that the company does not have any operational bank accounts is filed with the Registrar at the time of making the application.
Another option to remove the name of Company from registrar is voluntary liquidation under IBC.
My. company got incorporated in Feb, 2017 and no work has been done in the company, neither annual filing has been done for the company. Can the company opt fro Strike off under section 248 at current date, without doing its annual compliance for the financial year 2017-18
As per Section 248(1) of the Companies Act, 2013, a Company can apply for strike if it has failed to commence its business within one year of its incorporation or if it is not carrying any business or activity for immediately preceding two financial years (and has not sought the status of
Dormant Company under Section 455 of the Act).
Please note that in order to apply for strike off, the Company is required to complete all outstanding annual filings.
Hence in your case, since one year has elapsed from the date of incorporation, the Company can apply for strike off after completing annual filings for f.y. 17-18.
Hi
We have started our company in 2013.
Since its inception it is not operational.Not even bank account is opened.so no annual filing was done for last 6 years.
Can we raise strike off request without filing the annual returns retrospectively .The late penalty would be huge in case we proceed with filing.
Is it mandatory to file returns if the company is defunct since inception .
Can we successfully raise strike off request.
Pursuant to provisions of Section 248 of the Companies Act, 2013, a company can file an application for striking off if it has failed to commence its business within one year of its incorporation or is not carrying any business or operations for a period of two immediately preceding financial years.
As you have mentioned that the company hasn’t commenced its business since inception, therefore it can file an application for striking off. However, the requirement as to filing of annual documents for past years, the practice varies from RoC to RoC. Please discuss with the concerned RoC first.
Our facts are almost the same as that of P. Akshay Kumar . The company was formed in May 2016 with three directors , i.e. my son and his two friends but one resigned immediately without DIR 12 . Also, no bank account was opened and no business was carried out and no returns were filed. Now, to apply for strike off, it is mandatory to file annual returns as informed by you above but the question is , would it invite penalty for delay in filing returns for each year ? We met a CA today and he has informed us that penalty to the tune of Rs 75000 would be chargeable for each year, which is too much to pay for no reason . Secondly , if the MCA suo motu disqualifies them for 5 years and dissolves the company , would the liability to pay the penalty, on account of default in filing annual returns, still stand against them or would it get absolved. As already informed there are no assets and liabilities of company and no creditors or subscribers etc . All zero . We are really confused and upset as to how to come out of this problem. Pls guide .
Yes, late filing of annual returns will attract penalty for each year. Though legally required, but many RoC do not insist on previous annual filings. But if the Registrar strikes off the name of the company suo motu, then the penalty is not levied. However, if RoC strikes off suo moto for non-filing of returns, the directors of the company gets disqualified for 5 years.
My client is a government company so can a government company is eligible for strike off if it is fullfiling the the condition under section 232
Provisions for strike off are stated under section 248 of the Companies Act, 2013, which provides that a Company can apply for strike off if it fails to commence its business within one year of its incorporation or is not carrying any business or operation for a period of two immediately preceding financial years.
The word used here is the “Company” and definition of Company includes any Company which is incorporated under the Companies Act, 2013 or any other previous Act.
So, it can be concluded that Government Company can also apply for strike off under Section 248 of the Companies Act, 2013 only if it fulfills the eligibility criteria.
Hello Sir,
My Company was incorporated in August 2018 and the bank account of the Company has not opened yet as well there is no transcation in the Company since incorporation. Can i apply for Strike off or i need to do the Annual filling for the F.Y 2018-19 then i can apply for strike off.
As per Section 248(1) of the Companies Act, 2013, a Company can apply for strike if it has failed to commence its business within one year of its incorporation or if it is not carrying any business or activity for preceding two financial years and has not sought the status of Dormant Company under Section 455 of the Act.
Also, it’s required to complete all outstanding annual filings before making an application for strike off. Hence in your case, since one year has not elapsed from the date of incorporation, the Company can’t apply for strike off.
My company has some revenue in 2016-17, 2017-18. now no working from 1.4.2018 till date , company wants to apply for strike off do they have to wait for 2 years with no business activity?
My company was incorporated on 24/8/2016.I havent filed any balance sheet and annual filing. No business has taken place after incorporation.
Shall I directly go for strike off.
Pursuant to Section 248(2) of the Companies Act, 2013, a Company may, after extinguishing all its liabilities, by a special resolution file an application to the ROC on the grounds that the Co. has not commenced business since incorporation. In your case, the company has not commenced the business since the date of incorporation, you would be required to complete the annual filings for the Financial Year 2016-17 and 2017-18, only then you can file an application for strike off.
It’s great to see this website.
Hello sir,
I have incorporated a company on 01-12-2016 and have never filed any return nor had any transaction. We failed to start business but had one bank current account with nill transactions.
Shall I have to close the bank account mandatorily to file stk2?
What would be the consequences if I don’t file for FTE nor file any returns too?
If roc strikes off my co. By it’s own would it be fine? Will I have to face any problems later? I’m a govt employee now. No plans of any co. In future too.
Suggest me the better of two
1)File fte and close co.
2)Just ignore it, someday it will be struckoff by mca and it’s as same as filing FTE(Its ok if im disqualified as directlryfor next five years).
Pursuant to Section 248(2) of the Companies Act, 2013, a Company may, after extinguishing all its liabilities, by a special resolution file an application to the ROC on the grounds that the Co. has not commenced business since incorporation. Hence, there is a locking period of ONE year, only post this you can proceed with the ROC Application for Strike Off. The Co. shall have to comply with all the pending Annual Filling for all the preceding complete financial years. However, in case the ROC suo-moto strikes off the Company due to non-compliance with Annual Filling forms, all the directors of the Company shall be disqualified to act as a Director of this/any other Company for a period of 5 years. In your case, since you do not wish to continue/start a Company form of business in future and you are fine with being disqualified for next 5 years, you may go ahead with suggestion 2.
Sir I had a company registered in June 2015, and the company bank account was started in 2016. I was in loss in that business and due to lack of knowledge i havent done any filings till today… Now the penality is in lacs and i cant afford it. Please suggest what to do.. Mca shows status of company as Active and Bank account have entries of 2018. Please suggest and help me resolve …
As per the provision of Sec 248(1) of the Companies Act, 2013, Company can go for strike off if the Company has failed to commence its business within one year of its incorporation or is not carrying on any business for a period of immediately two preceding financial years.
As you have mentioned that the Company’s bank account has entries of 2018, it can be opined that the Company is still carrying on business.
Hence the Company cannot opt for strike off. Further, you would be required to make the default good whenever you will file an application for strike off.
Incase of Company having two classes of paid up capital i.e. partly paid up and fully paid up, Is company mandatorily required to call the unpaid amount on partly paid shares before filing an application for strike off u/s 248.
Also, incase of strike off, what happens to the paid up capital and reserves and surplus? Are they to be written off?
The Companies Act, 2013 does not mandate that, before filing of application for Strike off u/s 248 that the Company needs to mandatorily require to call the unpaid amount on partly paid up share before application.
The Company is eligible to apply for Strike off when there are no assets and liabilities.
Capital of the company gets used in meeting the liabilities of the company. Nil assets and nil liabilities are achieved thereby.
sir, we incorporated in 2017, so we need file only 2017-18 roc filing only right. is it required to 2018-19 roc filing to apply for strike off sir.
Pursuant to Section 248(2) of the Companies Act, 2013, a Company may, after extinguishing all its liabilities, by a special resolution file an application to the ROC on the grounds that the Co. has not commenced business since incorporation. Hence, in case your Company has not commenced the business you need not wait for completion of 2018-19 annual fillings; only complete annual filling for F.Y. 2017-18.
LLP was registered in Dec 2017 but no transaction has been done. Haven’t even opened bank account in the name of LLP. Have not filed annual return. Do not intend to use the LLP ever. Can we just leave it and it will get defunct in some time? Or can IT department recover penalty from directors individual bank accounts? I am a government servant, have joined last month. Other two directors are in private job.
Don’t leave it for Regulator to take action, the DINs may get deactivated for non-filing of returns. Please take action by yourself.
However, As per Rule 37 of LLP Rules, 2009 if a LLP is not carrying on any business for a period of one year or more it can make an application to Registrar in Form 24 for striking off name of LLP from the register of LLP.
And As per notification dated 20th May, 2017, the LLPs not carrying on any business can straight away file Form 24 for Strike Off but the Statement of Accounts should reflect Nil balances and should not be older than 30 days from the date of filling.
Sir, can just share the 1. format of Board Meeting and Special Resolution for striking off companies
2. Whether it is necessary to file MGT-14.
3. If we held Board meeting on 25.11.2018 then in how many days we can held Extra ordinary General Meeting.
4. Whether PAN & Tan is to be surrender before filling the for striking off companies.
1.Sorry sir, this is not appropriate forum for sharing formats.
2.Yes, MGT-14 is required to be filed.
3.You can call EGM either by calling it on shorter notice or
by giving atleast 21 days clear days if the notice is send by post and the date on EGM and the date of sending of notice is excluded.
4.As per our understanding PAN and TAN cannot be cancelled. But it can be surrendered on an application by
the assessee.
sir, we have an opc incorporated in january 2017. can we apply for strike off? and Form stk-2 will only be required?
An application for strike off can be made by a company which is not carrying on any business or operation for two immediately preceding financial years or which has been failed commence its business within one year of its incorporation. Such an application can be made in form STK-2 along with the requisite documents. Please go through our blog on this subject https://bsamrishindia.com/strike-off-under-companies-act-2013/
Sir, If a Pvt. Ltd. Company has been closed down but is active in ROC although the balance sheet has last been submitted to the MCA on March 31,2015 can it proceed with a case (filed when the company was operational) to recover its dues
A company can continue its case until the Company is legally operational and in existence.
Sir,
Thanks so much for your great assistance. We would like to request for some information as mentioned below
we incorporated an LLP in Sept2017, for which the CA missed filing form3, now when i thought to start running it properly, one of my associates having some knowledge about it, says that we are required to submit a penalty for around 30000. Also the form11 for the said is yet to be filled with penalty.
Further we would like to mention that there is no change in agreement and no transactions till date. Also even the bank account is just now opened after which i got to know all these.
Kindly clarify the way out in this case, should we go for strike off, and in that case how much would be the penalty if any.
Thanks,
In accordance to the provisions of Rule 37(1) of LLP Rules 2009, the LLP should not be working for past 1 year to apply for closure. Since, your LLP was incorporated in September 2017, hence it is not yet eligible for filing FORM 24.
My company not carry business from last 5 years but we have investment of one crore in other company by way of equity. How can I process STK-2?
company was strikeoff and we r not interested to work but last year before strikeoff we sell company property and tds is pending overall company is not in profit company is in loss we fill return of 2017-18 or not and we claim for tds and then cancel the pan of company we r very confused plese suggest
sir company strikeoff in 2017 sep. before that we sold property and tds deposit inincome tax deparment we r in loss and the payment of share holders are pending hum return bhar sakte hai kya or hume ac bandh karna hai and pan cylinder karna hai tds lena hai
As stated by you, the Company has already been struck off in September 2017 therefore it has no legal existence and hence you cannot file any returns. Also, you are required to surrender your PAN and TAN number.
what we do with bank ac hume paise share holders ko dene hai de sakte hai 16000 balance hai ac main dene 60000 rs hai if we cant claim tds then what we do and in future any income tax notice come then
sir u told me to surrender pan and tan but when i asked ca he told without fill return its not possible and we sale property of 60 lakhs if we not fill return then scutiny from income tax come surely
As stated by you, the Company has already been struck off in September 2017 therefore it has no legal existence
How we know about the strike off date of company.official Gazette or letter issue date or dispatch date.if roc send letter in July end to the company and strike off date is july first week but that date company active online and company received mca confirmation mail of form fill in july second week
As per sec 248(5),the company shall stand dissolved from the date on which the notice of its strike off is published in the Official Gazette.
Sir,
I have a pvt Ltd. Company, opened two years ago
We have not done any business since then and not applied for PAN also.
Not filed any returns since then.
Company status is shwing active
Can i directly go for STK2
if yes
then should i pass both Board resolution & Special Resolution???
Please advice
As per Section 248(1) of Companies Act, 2013, if a company has not commenced any business for a period of atleast 1 year since its incorporation then it can go for strike off. And, both Board Resolution and Special Resolution are required for this purpose.
Will there be any problem if i dont have PAN also????
What is the treatment of of surplus / deficit cash balance in bank account after paying all liabalites in the case of strike off.
Sec. 248 requires a statement of account containing assets and liabilities made up to a day not more than 30 days before the date of application. Therefore, the company need to close its bank account and before closing it must withdraw all the money from its bank account/s. This money could be utilized for discharging any liabilities that may be outstanding including statutory fees, professional fees etc. relating to strike off the company.
Sir , my parents were directors in a company that closed down 1 year back. It has been strike off under master records of companies records.
Now after 1 year there is a labour court judgement against the company to pay 800000.
Now since there are no property in companies name, are the directors responsible in there personal capacity
As per sec. 248 (7) 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 which is dissolved under Sec. 248 (5), shall continue and may be enforced as if the company had not been dissolved.
Therefore, in your case liability of Directors can be enforced even after striking off.
Sir if company bank ac have only one transaction in march 2014 from 1 jan 2012 to 31 march 2017.company sell property in 2017 april and pay dues.company strike off due to non filling since incorporation due to fault of ca but company fill every year income tax return.we should go for revive or not.puchase property in 2010.
If a company has no work in future then it may not be revived but disqualification incurred by directors as a result of striking off should be removed. Therefore, you should seek relief by filing a writ petition with High Court for this matter.
Sir company incorporation in 2009 last and then purchase property and construction start and aftercthat from 1jan 2012 to 31 march 2017 there is only one transaction in bank ac on march 2014 and in april 2017 we sell the property and clear the balance sheet and every year income tax return filled by company but not filled in roc due to ca fault and company strike off 248 section 5 we should go for revive the company or not.we have no work in future.there is any process without revival to fill documents in roc or roc have any power for those company whi are interested in voluntier strike off
If a company has no work in future then it may not be revived but disqualification incurred by directors as a result of striking off should be removed. Therefore, you should seek relief by filing a writ petition with High Court for this matter.
Procedure for strikking of Foreign Company is similar to striking of Indian Company or Not ? Please provide me procedure for striking of foreign company.
Closure of a liaison/ branch office of a foreign company in India requires RBI approval and a report from RoC as to the state of compliances. For further information, refer to blog by clicking on the following link: https://bsamrishindia.com/closure-of-liaison-office-branch-office/
Hi, I had formed a Pvt Ltd Co with Rs.200/- as the starting capital in 2002. We had a bank account. We carried out a couple of transactions in the first year (no profit, only loss) but nothing since the last 15 years. We did not file the P&L or any taxes. We have no assets and no liabilities. Our company is now in the process of being struck off. The directors are no longer in India and are not active on any other company in India. Should we just let the company be struck off? We are not interested in reviving the company or conducting any business in India.
If you do not wish to revive the company or conduct any business you can let ROC strike off your company suo moto.
However, the Directors will attract disqualification for five years if the company lets RoC strike off, without the company having filed old returns. It is mandatory to file necessary returns and if the returns not filed for a continuous period of 3 years, Directors of such company are disqualified.
Sir, We two partners have applied for LLP in SEP 2014, This was for an future project. We tied our level best best for avialaiing loan as per CGTSME scheme but failed to avail the loan. We opened account but there is no transaction in LLP and bank account both since the start. Now today we have received email from ROC stating that “FORM 16
[Refer Section 12(1)(b) of the LLP Act, 2008]
CERTIFICATE OF INCORPORATION ” with details as ” LLP Identification no xyz , It is hereby certified that XYX LLP is incorporated persuant to section 12(1) of the limited liability act 2008. Given at maharashtra this 26/3/2018.” We are unable to understand that. Whether our Company came to existence on the date mentioned in certificate of incorporation or from the date of application. From Which date our E- filing will be mandatory. Please guide us.
Similar mails are received by many companies due to some software glitch. So your date of incorporation is the date mentioned in Certificate of Incorporation that you have got originally.
As per section 12 (4) of LLP Act, 2008; Certificate of Incorporation is the conclusive evidence that the LLP is incorporated.
Keeping this view in mind, it can be said that your company came into existence on 26/03/2018 and hence e-filing will be done subsequent to the date of incorporation.
Similar mails were received by many because of some software glitch.
Thank you for valuable information. You have replied to every query. That is ultimate level of professionalism!!!
One of my company has 40 Lacs of share Capital and negative reserves of 2 Lacs ie 38 lacs in liability side.
These 38 Lacs is represented by Bank account in the asset side.
Will I have to show loss of 38 Lacs to go for strike off?
Can I not just distribute the balance sharecapital to shareholders?
In basic accounting there is no concept of NIL balance sheet, therefore, for Strike Off, we prepare a balance sheet whereby the Capital on liabilities side is set off by loss incurred by the Company under the head Profit and Loss (Debit Balance). Further, all the liabilities have to be extinguished by the Company before proceeding with the strike off.
In this case Rs.38 lacs in bank balance is asset.Till this bank balance is exhausted you cannot file for strike off.
No, the balance share capital can’t be distributed unless the company decides for voluntary liquidation among shareholders.
Sir, is it absolutely necessary to surrender the pan card of the company after strike-off?
If it is not taken care of, can the IT dept ask for ITR even after strike-off? But the question of income tax does not arise when the company is not active at all.
In case the PAN card needs to surrendered, what is the procedure?
Thanks in advance, Sir.
PAN Card is generally required to be surrendered in case of duplicate issue. As per our understanding it may not be required here. In any case, if you wish to cancel/ surrender you can voluntarily write a letter, explaining the reasons for discontinued filing of the return and can request the A.O. to close the file and ask for surrender of the PAN card/or can send the PAN card for cancellation.
A Pvt Company didn’t file annual returns for the last two financial year as it incur loss for the last two financial year. Can we apply for the strike off without completing annual filing.
As per last proviso to Rule 7 of the Companies (The Registration Offices and Fees) Rules, 2014, no request for recording any event based information or changes shall be accepted by the Registrar from defaulting companies, unless they file their updated Balance Sheet and Profit and Loss Account and Annual Return with the Registrar of Companies. Therefore, before proceeding with Strike Off, the Company need to complete their pending Annual Filings.
Hi , I have one LLP company registered in 2012 but could not do any business. Though I have filed NIL return for 3 years just to keep the company alive,now I want to close this. How can I do it. Pls advise
You are required to file Form 24 to close your LLP. Necessary supporting documents like statement of accounts, affidavit, indemnity, etc needs to be filed.
Please let me know the interpretation of “A company which is not carrying on any business or operation” under this section
The quoted line can be interpreted as the Company is not conducting any business or operations through which it is:
1. generating recurring income
2. increasing value of business assets
3. Securing the income and value of the business
my company form on 07/06/2017. company not call subscrbition/ share capital. how we prepare audit balance sheet for said period, as it require to submitted to irda for noc
As per Section 10 of the Companies Act, 2013, the provisions contained in the MOA and AOA of a Company shall be binding on the Company and each of the members thereof. Therefore, it is mandatory for the subscribers to pay subscription money.
The Section also provides that all moneys payable by members to the company shall be debt due from him to the Company. therefore, it is to be shown as debt to be paid by the members.
“As per Section 10 of the Companies Act, 2013, the provisions contained in the MOA and AOA of a Company shall be binding on the Company and each of the members thereof. Therefore, it is mandatory for the subscribers to pay subscription money.
The Section also provides that all moneys payable by members to the company shall be debt due from him to the Company. therefore, it is to be shown as debt to be paid by the members.”
Dear Sir,
My query about board resolution n special resolution under strike off company.
* Board resolution will pass before special resolution or after special resolution.
* What will be format for notice of EOGM.
* if MGT 14 will file ..thn board resolution would also attach with special resolution or not?
The Directors are required to approve the Board Resolution for making strike off application. Board resolution shall be passed before the approval of Members by way of Special resolution. There is no format prescribed for the notice of EGM, Under form MGT-14, only Certified Copy of the special Resolution is required to be enclosed.
Dear Sir(s),
I want to know that i have a private limited company incorporation date is April 07 2017 and the company has not commence its business since incorporation. Now we want to close the company so can we file Form STK 2 now.
As per Section 248 sub-section 1 and 2, the Company has to wait for atleast one year since the date of its incorporation to go for strike off through STK-2. So, in this case, an application can be filed only after April 7, 2018.
Hi . I had registered llp in2012 . Opened an bank account .. bu never did any business as our partner went apart ..I want to close the llp but the fines a very high .which I cannot afford .. is there a way to close it and avoid heavy fine ?
In case you have filed not Form 3, agreement of partnership, you can close LLP without the complying with the annual filing requirements, on a contrary in case Form 3 is filed you have to complete your annual filing along with additional fee, for a period of one year.
What is accounting treatment at the time of strike off for amount payable to holding company by a subsidiary company
As per our understanding, Amount in Paid up share capital is adjusted towards the losses and debit balance of P&L.
A company has 3 shareholders, out of which one of the shareholder is a company and got struck off by the MCA due to non filing. Now what will be the treatment of the shares held by struck off shareholder company, since it is 50% of the total paid up capital of the company. Please advice.
As the Company(Shareholder) has been struck off, it is no longer a legal entity. Ministry has directed not to transfer those shares. So, neither the issuer company nor the struck off Company (shareholder) can effect any transaction in respect of those shares. The fate of such shares is a question which is yet to be addressed by the Ministry.
One Company is striked off by ROC and directors are diqualified. That company never started business from incorporation never opened bank account. Directors are holding directorship in other companies. IN such case how can a director remove his disqulification ? Directors does not want to revive company since it never started business. Kindly Advise under which section director needs to file application to NCLT for getting directors from NCLT on future actions to be taken.
There is no immediate power to NCLT to remove the disqualification of directors, neither Companies Act provides for any specific removal of disqualification.
Therefore, another option with you is to file a writ petition with the High Court.
Also, on September 21, 2017 Madras High court passed an interim order staying the Registrar of Companies (RoC) Chennai’s order striking off the name of Bhagavan Das Dhananjaya Das as director of Birdies and Eagles Sports Technology, a private company.
Can board of directors authorize a person to sign on Indemnity Bond (STK-3) and Affidavit STK(4) under Companies Strike off Scheme
As per Rule 4(3) of the Companies (Removal of Name of Companies from the Register of Companies) Rules, 2016, the affidavit and indemnity bond is to be signed by every director. Therefore, the Board can’t authorise a single person to sign on behalf of the entire Board.
company receive notice under sec 248 for non filing of annual compliance. Registrar either remove the name if the company don,t send any representative.
But the company wants to strike off.
what should the company do and what is the impact?
without filing annual compliance for three year is it possible to strike off.
Thanking you
If a company receives notice under sec 248 (1) and it doesn’t send any representations then on the expiry of 30 days from the date of notice, the Registrar can strike off the name of the company as per sec 248(5) and the company shall stand dissolved. But if it is struck off like this, the directors are also disqualified for 5 years u/s 164(2) for non-filing of annual returns.
If you want to go for strike off, first you need to file the pending annual returns for all the years and then apply for same u/s 248(2).
hi all,
i invested some amount in a public ltd company in installment policy , but now the company status in mca is “strike off ” i tried to visit office but is closed. how i can get my money back pleases help me.
You can apply for restoration of the Company. According to the Section 252 of Companies act 2013, restoration of name of a company struck off under section 248 can be done by making an application to Tribunal by the aggrieved parties i.e., by company or member or creditor or workman to restore company’s name.
The Tribunal, after submission of the application, shall give a reasonable opportunity of being heard to ROC, company and all the parties concerned and thereafter, pass an order that it deems fit
Hello sir.. on the closure of a private limited company, the director has adjusted the unsecured loan amount given by him to the co against the fixed assets and has not charged depreciation but has paid the employees.. The adjustment which took place should be approved by board resolution or whether it can given by an affidavit.. please clarify.
The adjustments carried out for preparing NIL balance sheet is not required to be approved either by Board Resolution or through an affidavit. Further, you are advised to consult a good tax consultant for a better opinion on these adjustments.
Hi Sir,
Recently my company has been mentioned for strike off (Sept 2017) and I haven’t done any business for many years.
But we still hold a property in company name. What is the procedure in selling company property when the status of the company is strike off ?
Do we need to make it active before selling of the property ?
Thanks in advance.
Since the property is in the name of the company, it cannot be sold because the company is no longer in existence. The company needs to be revived for selling the property.
A company was incorporated in june 2016 and it increased its authorised capital in june 2016 only. But the said company did not commenced any business activity since its incorporation, can it file for strike off us 248? and also if spcl resolution is passed is mgt-14 is also to be filed?
As per Section 248 (1) a company which has failed to commence business within 1 year of incorporation or which is defunct (non-operational) for last two financial years can go for strike off.
The application for strike off needs to be filed in STK-2. The special resolution should be attached in form STK-2 and need not be filed in MGT-14.
Hi,
I want to strike off a company having a paid up capital of Rs. 30 Lakhs and I am having 35 Lakhs in company’s bank account.
As per the Norms I need to close Bank Account before filing of the application for clouser. What to be done in this case?
In case of strike off as per sec 248(2) of the Act, the bank account has to be closed before going for strike off. Since your company is having 35 lacs in the bank account as asset, it cannot apply for strike off unless all the assets are exhausted and the capital is eroded.
Considering the case in point, you can proceed for Voluntary Liquidation u/s 271 of the Act.
Our company has not filled its annual returns for last three years. Can it be defunct by filing STK 2 or we have to first file their annual returns for last three years and after that file STK 2.
As per last proviso to Rule 7 of the Companies (The Registration Offices and Fees) Rules, 2014, no request for recording any event based information or changes shall be accepted by the Registrar from defaulting companies, unless they file their updated Balance Sheet and Profit and Loss Account and Annual Return with the Registrar of Companies. Therefore, before proceeding with Strike Off, the Company need to Complete their pending Annual Filings.
Please guide me on below mentioned queries:
1. Accounting treatment of closure of Bank A/c if Bank payees closure amount to director through cheque.
2. Can the liabilities be return back to P/L A/c.
3. Can Statutory auditor certify Financial Statement before application of Strike off.
4. My company have Capital 1 lacs, P/L a/c (debit) 50k, Liability 30k and Bank 80k. how to proceed for strike off.
The questions pertains to financials of the company. We do not reply to such specifics. Nonetheless, the company is required to close its bank account. Before closing it must deposit the cheques, if any, withdraw all the monies from its bank account/s. This money should be utilized for discharging any liabilities that may be outstanding including statutory fees, professional fees etc. relating to strike off the company. The statutory auditor can certify the financials.
Hi..my firm has advised the directors to take back share capital as funds refunded on liquidation. And stk_2 has been filed thus….with nil liabilities….will roc raise an objection?
Please advice on corrective action.
We could not understand how directors can take back the share capital. You also seem to be mixing liquidation and strike off, they are different procedures.
our private limited co, has not filed its annual returns for the last 3 years. Now ROC has strike off. How to file the pending Annual returns.
The company needs to be restored. Only then returns can be filed. You may go through this blog, it will be extremely useful. https://bsamrishindia.com/restoration-of-name-of-a-struck-off-company-under-companies-act-2013/
sir,
our company is pvt.ltd company. past 3 years we have not filed annual returns and now the company is in strike off list. Business is doing and salestax returns filed up to date. How to bring back our company in active status. Please advise
An application needs to be filed with NCLT for restoration. You may go through this blog, it will be extremely useful. https://bsamrishindia.com/restoration-of-name-of-a-struck-off-company-under-companies-act-2013/
Dear Sir,
Can you please send formats of attachments required in form STK-2 and format of resolution passed in board meeting and general meeting?
List of documents to be attached with form STK-2 is prescribed under Rule 4(3) of the Companies (Removal of Name of Companies from the Register of Companies) Rules, 2016. Format of the attachements are also prescibed under the same. P
company with unsecured loans cannot be struck off
Under Rule 8 of Companies Removal of name it is said that for foreign national Declaration shall be notrized
Please let me know what declaration is to be given and if there is any format for the same request you to kindly provide the same.
Thanks in advance.
Declaration to be given is same as the Affidavit prescribed under Rule 4(3)(iii) of the Companies (Removal of Name of Companies from the Register of Companies) Rules, 2016. Format of the same is also prescibed under STK-4.
What is treatment of investment, by company A in compnay B which is being striked off by ROC????
As per our understanding, the investments should be written off. But you should also consult a Chartered Accountant who can guide you in a better way w.r.t. the accounting treatment of the same.
Yesterday, I had a talk with you on telephone.you gave me very good advises.Thanks.
Company has incorporated in April 2012, not run business,no bank account, no Assests no liabilities carries,
Company status on MCA is active.
NO notice came regarding strike off.
Now company wants to strike off the company ..so my query is company needs to file financial statements and annual filling first for 5 years or will do compounding application or only have to file form STK 2 for strike off the company name from ROC with required attachments.
At what time the company would be struck off..
As per last proviso to Rule 7 of the Companies (The Registration Offices and Fees) Rules, 2014, no request for recording any event based information or changes shall be accepted by the Registrar from defaulting companies, unless they file their updated Balance Sheet and Profit and Loss Account and Annual Return with the Registrar of Companies. Therefore, before proceeding with Strike Off, the Company need to Complete their pending Annual Filings.
As for the compounding, it is entirely upto the ROC whether they ask the company to compound the offense or not.
Agovernment company is to be wind up but the comp;any has not filed its balance sheet for last 3 years .Whetehr thec ompany has to file the balance sheet before winding up.Also CAG has appointed the auditor
Apologies for the late reply. Please find below the answer to your query as below:
A company which has not filed its annual returns consecutively for three years, its directors become disqualified. Have you started winding up process? Further facts are needed. However, it is suggested that annual filings be done.
Dear Sir
Greetings !!
Thanks for writing this article.
I request you to please advise us on the following situation:
My company is not in operation from last 3 years and has no Liability. But company is having reverses amounting to Rs. 55 lacs.
Please advise how i can proceed with strike off in this case. Company don’t want to proceed with voluntary winding up.
Sorry for the delayed response. Please find the reply to your query as follows:
Section 248(2) states that a Company may after extinguishing all its assets and liabilities, proceed for filing of application for Strike Off. Therefore, the Company must firstly extinguish its liabilities and go for Strike Off.
Can a company apply to be struk off from the register within 5 months of its incorporation?
Sorry for the delay in replying to your query. Please find below the solution to your query:
As per Section 248 of CA, 2013, A Company can make an application to ROC for removal of name of Company from register of Companies when it has failed to commence its business within 1 year of incorporation. So, here Company cannot make application for strike off within 5 months from incorporation.
Hi Sir.
How many months does it take for the ROC to strike off the company after the filing of strike off application?
Thanks
Time taken by ROC to strike off of a company is depended upon the under which jurisdiction of ROC your application falls. There are no prescribed criteria for it. We have seen cases where the company was struck off within 2 months and then there have been instances where it took much longer.
Sir
A private company not doing any business for more than two years wishes to get its name struck off the register of companies. However, in the balance sheet there is a paid up capital of around 7 lakhs. How to make balance sheet NIL in such a case? Please guide.
For the purposes of strike off the Company needs to have Nil Assets and Liabilities.
In your case, even if you have a capital of Rs. 7,00,000/- it will be set-off against the loss of the same amount in Profit and Loss account, provided you have zero/ nil assets. Even if this amount appears on the Statement of Assets and Liabilities it shall be construed as nil.
There is some bank balance and some cash balance for my company, so before filing the application STK2, I will need to withdraw all the cash and close my bank account, after clearly all liabilities there will very small amount of cash remaining, should that all also be distributed as dividend, it that correct?
“Apologies for the delay in reverting with the solution to your query. Please find the answer to your query as follows:
Dividends can be paid out of the profits and/or reserves. So no, the amount cannot be distributed as dividend in your case.
In case of strike off the company is required to close its bank account. Before closing it must withdraw all the monies from its bank account/s. This money should be utilized for discharging any liabilities that may be outstanding including statutory fees, professional fees etc. relating to strike off the company.”
My company is in the list of being struck off. I saw it in the public notice on ROC Delhi, we haven’t filed returns, how much time do we have before it is struck off.
Apologies for the late revert. Please go through the notice carefully. The time lines for reply period till when you have to file a reply or and further course of action warranted from your end must have been mentioned in the notice itself. Generally, a time period of 30 days is provided by ROC to file a reply.
Hello Sir,
Please can you confirm if SKT 3 and SKT 4 , if there are 6 Directors, stamp duty is to be paid for all the above forms individually?
For making application of strike off the company needs STK 3 (Indemnity Bond) and STK 4 (Affidavit) from all the directors. The STK 3 and STK 4 must be on stamp paper of requisite value. The forms can be prepared individually or collectively.
However stamp duty must be paid for all directors for both of the forms STK3 and STK 4.
It must be noted that the stamp duty on STK 3 (Indemnity Bond) and STK 4 (Affidavit) shall be applicable as per the Stamp act of the state in which the company is situated.
Sir,
Regarding obtaining consent of 75% of the Members of the Company in terms of paid up share capital as on the date of application. I understand this consent can be taken after Board resolution is passed for making application u/s 248(2)? Is this correct or do we have to take prior consent from members before passing Board resolution. Thanks.
Sorry for the delayed response. Please find below the reply to your query:
Firstly, Board will pass the resolution for Strike off, and then seek the shareholders approval. General Parlance is that before going to the shareholders, Board should pass the resolution in that matter.
Thank you sir in helping me understand the approval process.
need advice how order has been passed u/s 248(5) without considering section 248(6) non filing of return can not be a base to strike off companies.
Kindly read 248(1) where 2 conditions have been specified for strike off. Non filing of financial statement and annual returns can be read as Company not carrying any business or operations, therefore fulfilling the second condition of Strike Off. Besides, the companies should have represented before the concerned RoC when it received notice u/s 248(1).
Just wanted to understand what happens to the property owned by the company in case of a strike-off from ROC.
The Property stands registered in the name of the Company which has been struck off and can’t be sold off since the Company is no longer in existence. In such cases, the struck off Company seeks to revive its name by filing an application with the Tribunal. If you are following the news, the corporate affairs ministry has asked states to complete identification of properties owned by de-registered companies at the earliest and ensure district administrations prevent transactions in those assets. The ministry has also urged the states to initiate disciplinary action against the officials concerned in case such transactions go through
Dear Sir,
One of my Company’s registered office in karnataka and two Directors from Karnataka and other two directors from Kolkata .
So please guide me the indemnity bond of two states is required and what will be the stamp duty if the Company’s Authorished Capital Rs. 25 Lakhs and paid up Rs. 10. lakhs
Stamp duty is payable on the basis of place of execution. 2 Indemnity Bonds shall be executed , 1 in Karnataka and 1 in Kolkata and Stamp duty of respective state is applicable.
What accounting treatment can be passed for the pending cash balance if a company wants to be strike off?
also if it has unsecured loan from director, can it be strike off?
The balance sheet shall be NIL while filing for strike off, reflecting your share capital account to be squared up with your P&L debit balance (Loss). You can set off the same toward loan payable or professional fees. The process of strike off cannot proceed while you have unsecured creditors. Kindly ask your auditor to make necessary adjustment for the same.
How can disqualification of director u/s 164(2) can be nullified?
the company has been strike off by roc
As per provisions of the section 164(2) of the Companies Act read with rule 14 of companies (Appointment and Qualification of Directors)Rules ,2014 default can be made good only after serving cooling off period of 5 years . Further Clarification from MCA is awaited on this point.
My Private Ltd company has not filed its annual return/balance sheet for three years since it is not carrying on any business.
Now,ROC has strike off. What are the consequences of the directors.
Where the company has failed to file annual returns for continuous three years then as per the provisions of section 164 (2) of Companies Act, 2013 , directors of such company shall be disqualified for period of 5 years from being appointed as directors in any company. Once ROC has passed order for strike off, the liability of every director, manager or other officer who was exercising any power of management, and of every member of the company, shall continue and may be enforced as if the company had not been dissolved.
Hi,
There is a pvt limited company which got incorporated in 2015 may with 3 directors holding 33% share capital each. However the 2 directors cheated the 3rd director and resigned in January 2017 without transferring their part of shares to the 3rd director. Now the 3rd director wants the company to be should down..Now what exactly should be done to strike off this company’s name from ROC.
They are not even meeting the minimum crirteria of 2 directors and the 3rd director got only 33% of shares, so therefor he cannot pass the special resolution required in the section.
Please suggest what can be done?
Thanks in advance.
In this situation, as per Section 174 (2) of the Companies Act, 2013, the continuing director can only act to appoint a new director or call general meeting and for no other purpose.
The first step shall be to appoint a new director so as to make total number of directors two as a private limited company is required to have at least two directors. This is necessary as a private company is required to have two directors at all times.
It must be noted that for closure of the company strike off application under Section 248(2) can be made. Strike off requires assent of the shareholder via Special resolution. Since there is a deadlock between the remaining director-shareholder and the former director-shareholder need to agree for passing special resolution for closure of company.
Deadlock in the management can be one of the grounds for applying winding up of the company. Application to be made to NCLT.
Further facts would be required to suggest anything. But any one of the ways would have to be taken, i.e., either Voluntary winding up or strike off if the company is able to meet the conditions of nil assets and liabilities.
Dear Sir,
We have incorporated LLP in 2014 , But due to some personal reasons , the company did not do any operation . We have not filed any return during these period (2014-2017). Sir now i want to close or may be i want to do operation in this year . Please guide me that which option is beneficial either close it or re-start operation. And the procedure or the liability for non filling of return.
We would suggest you to close the LLP as the late filing fee and the penalty for non-filings till date may come out to be really high.
,
ROC has suo moto removed name of my company since annual filings were not done for a long period of time. We didn’t receive any notice for struck off from ROC office. Yesterday, we came to know about the list (through news). I am willing to close the company. Please enlighten us upon the path for realisation of assets of the company and settling the liabilities, along with the liabilities of director. Please note that the company had very few transactions and were genuine. Nothing malafide was done at any time ! Please help.
Once the ROC has struck off the name of the Company from its records, the Company stands dissolved as per Section 248(2). For realisation of assets and settling of liabilities, you need to proceed for the revival of the company. Please go through this link for more information. https://bsamrishindia.com/restoration-of-name-of-a-struck-off-company-under-companies-act-2013/
You may also note that as per Section 248(7), liabilities of the Director, 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.
We didn’t file for 4 yrs and we didn’t receive any SCN also. The company is in strike off status. This company didn’t do business for 3 yrs
we have money in the name of the company can we use that money or what are the consequences arises if i use that money?
There is not much clarity but once a company is striked off, it doesn’t remain a perpetual entity and all the assets and liabilities becomes personal assets and liabilities of shareholders and directors.
Sir due to non filing of balance sheet our company striked off by roc we have not done any business and company not needed also is there any penalty on directors
If the director of the company has not filed financial statements or annual returns for any continuous period of three financial years, then they fall under the disqualification of Director and they are not eligible for re-appointment and appointment in any other company for a period of five years from the date, the company fails to do so.
A Pvt. Co. is Strike off by the ROC and the Director of this Co. is applied for conversion of Partnership firm to LLP, Can a disqualified Director become a designated partner in LLP?
No, a disqualified director cannot act as designated partner. In accordance to the MCA clarifications any person disqualified under section 164(2) of the Companies Act, 2013 is advised not to act as director during the period of the disqualification and not to file any document or application with MCA as the same shall be summarily rejected.
A company was incorporated in the year 2013 but has not filed Roc returns yet. It has planned to file returns now but the status of company appears as strike off. Now 1. Will the directors of that company are disqualified?If yes, for how many years
2. What we can do to make company status as active other than going to tribunal u/s 252.
1. As per Section 164(2), Directors shall be disqualifed for a period of five years from the date on which the said company fails to do so.
2. As per Section 252 of the Companies Act, 2013, there is only one option to revive the name of the company , you have to approach NCLT for obtaining a active status. NCLT may pass an order for restoration of name of the Company, subject to its satisfaction. You have to do the filing of annual returns of previous year to ROC.
We didn’t file for 4 yrs and we didn’t receive any SCN also. The company is in strike off status. This company didn’t do business for 3 yrs. The issue is I am also a Director of another company and we are doing active business in this company. Will this strike off in any case affect the other company’s operations. Also, we had intentions to close the previous company, but it was too late now. Any suggestions?
As per Section 164(2) of the Companies Act, 2013, any person who is or has been a director of a company which has not filed financial statements or annual returns for any continuous period of three financial years shall not be eligible to be re-appointed as a director of that company or appointed in other company for a period of five years from the date on which the said company fails to do so. You will be disqualified from being Director of any Company and you have to vacate office of Director in other Company immediately.
Dear sir ,
We have not filed any returns in roc for past 7 years due to negligence . But the company has been doing business. We have an outstanding loan also . We recieved a notice from roc to show the proof that company has been working . So we started filling the forms but the name of the company has been struck off . Now how do we revive the company and how does ot effect our running business and bank accounts
If the name of the Company is struck off, you can go for restoration of name of the Company by making application to the Tribunal u/s 252(1) of the Companies Act, 2013. The application is to be made within a period of three years from the date of the order of the Registrar. If the Tribunal is satisfied, it will order for restoration of the name of the company.
Do we have to go through high court ot directly in roc . Can a director approach the roc or donwe have to take a ca along?
For the purpose of applying for strike off of a company, there is no specific mentioned requirement of a Charted Accountant. The directors themselves can apply for strike off. But for making an application under section 248 (strike off), there is a basic condition of extinguishment of all the liabilities and assets of the company, and a statement of the same shall be certified by any professional (not specifically required to be a charted accountant).
Dear Sir,
If a subsidiary of Listed company wants to be a strke off then whats a compliance to be done ?
any resolution to be pass by listed company or not?
Subsidiary of a listed Co. can undergo the process of striking off by filing Form STK-2 with MCA on satisfying the basic requirements as per Sec. 248 of the Companies Act, 2013. As per Regulation 24(6) of SEBI [LODR] and Section 180 of the Companies Act 2013, prior approval of shareholders of the Listed Entity is required by way of Special resolution before any sale/dispose/lease of assets in the subsidiary Co. (where more than 20% of the assets are disposed in a Financial year).
Hello sir,
Rules specify that the company shall have no assets and liabilities
Can a company having rs.100000/- share capital, loss of 60000 and cash balance of 40000 apply for strike off???
Requesting you to reply back for the query..
In basic accounting there is no concept of NIL balance sheet, therefore, for FTE or Strike Off, we prepare a balance sheet whereby the Capital on liabilities side is set off by loss incurred by the Company under the head Profit and Loss (Debit Balance). Meaning all the liabilities have been extinguished by the Company before proceeding with the strike off.
In your case, Rs. 40,000/- cash balance is asset. Till this cash balance is exhausted, you can not file for strike off.
Is there any requirement to file income tax return for the period up-to date of filing of SKT2.
According to Rule 4(3)(ii) read with Rule – 7(2) of the Companies (Removal of Name of Companies from the Register of the Companies) Rules, 2016, Every application in Form STK 2 shall be accompanied by a statement of accounts containing assets and liabilities of the company made up to a day, not more than thirty days before the date of application and certified by a Chartered Accountant. ROC shall, simultaneously intimate the Income-tax authorities and other tax authorities having jurisdiction over the company, about the proposed action of removal or striking off the names of such companies. So if there is any issue related to non-payment of Tax or any income escaping or any previous defaults relating to Income Tax Provisions, IT department may raise objections on it and ask the assessee to file the return and other required documents before passing the order of Strike-off.
Do I need to attach explanatory statement to Special resolution under section 102 for filing MGT-14 ?
Yes, it is mandatory to attach explanatory statement while filing MGT-14.
Thank you for early reply.
Sir, I have a query that my company is not working and has not filed annual filing since 2013. now i want to close the company, can i have to complete annual filing before file STK-2.
Section 248(2) does not specifically prescribe any filing to be completed before a non-operative or a defunct company can proceed for making application for strike-off.
However, in case of a company failing to file annual returns for consecutive period of three years, as per section 164 (2) the directors of such company are disqualified from holding office of the company and the other companies in which they are directors. They won’t be allowed to make an application for strike off.
There have been cases where the Registrar of Company has specifically asked the applicant companies to complete their annual filing first before the application for strike off could be entertained.
If annual compliance have not been done then STK-2 can be filled?
Also MGT-14 needs to be filled for special resolution?
Yes, STK-2 can be filed even if annual compliances have not been done and MGT-14 also needs to be filed for special resolution.
How can the Company have a nil balance sheet when share capital is sitting on the liabilities side? Does this mean the shareholders have to be returned their capital before making an application for striking off the name of the Company from the Register of Companies?
In basic accounting there is no concept of NIL balance sheet, therefore, for FTE or Strike Off, we prepare a balance sheet whereby the Capital on liabilities side is set off by loss incurred by the Company under the head Profit and Loss (Debit Balance). Meaning all the liabilities have been extinguished by the Company before proceeding with the strike off.
If Special Resolution is passed us 248(2), is it mandatory to file MGT-14 for registration of this SR before filing STK-2? And what will be the situation if consent of 75% holder of Paid up Capital is obtained?
Yes, MGT-14 is required to be filed if SR is passed. However, if consent of 75% holders of paid up capital is obtained, then no need to pass SR. MGT-14 will not be filed in this case.
I’ve filed an STK-2 (without filing MGT-14) two days back and its status is pending for approval . Can I file MGT-14 now?
Another STK-2 was filed around 45 days back and right now form is under the process of striking off, what can be done in that case? Will it attract penalty as per section 117 (2)??
Dear Team,
Company not in operation for 2 years. Filed STK-2. Now recd letter from mca for resubmission mentioning rule 7 of Companies(regn off and fees) rules.
do we need to file all pending balance sheets and annual returns before filing stk-2?
As per the provision of section 248 sub section 2 read with 4 of the (Removal Of Names Of Companies From The Register Of Companies) rules, 2016, a company may, after extinguishing all its liabilities, by a special resolution or consent of seventy-five per cent members in terms of paid-up share capital, file an application for striking-off the name of the Company. There is no condition for filling the pending balance sheet and annual returns, however if ROC states any defects in the strike-off application already made, then the same needs to be rectified accordingly.
Hi what was the conclusion on this? Is a Company necessarily required to file Annual Returns and Balance Sheet before applying for suo moto strike off.
As per the Fast track exit scheme, there was no as such requirement to file pending statutory returns before applying for strike off. However, Under the Companies Act, 2013, pursuant to section 248 and chapter XXIV of Companies Act Rules “No request for recording any event based information or changes shall be accepted by the Registrar from such defaulting companies, unless they file their updated Balance Sheet and Profit and Loss Account and Annual Return with the Registrar of Companies “ . Thus, we can conclude that a company needs to file it’s annual return and balance sheet before applying for suo moto strike off.
Hi, how to show share capital as nil..which matches the asset side with cash..can we distribute the cash to shareholders… what happens to share capital..is there any other provision which needs to be complied to make share capital nil. Please reply
In basic accounting there is no concept of NIL balance sheet, therefore, for FTE or Strike Off, we prepare a balance sheet whereby the Capital on liabilities side is set off by loss incurred by the Company under the head Profit and Loss (Debit Balance). Meaning all the liabilities have been extinguished by the Company before proceeding with the strike off.
Dear Sir/Madamm,
I have registered a pvt ltd company on 2015. I have not made any business transaction, no current account, not filled return filling since its incorporation. What are the option I have now for closing the firm – 1) If in future govt itself closes my company by issuing STK-1 notice to me, do I need to pay any fine or penalty for the same. 2) I should go for Fast Track Exit to close firm. 3) Any other inexpensive option with less legal hassles
1. No you don’t need to pay any fine or penalty if the ROC sends you a notice for strike off.
2. If the Company is falling within the criteria prescribed on whom the provisions of strike off are applicable, the Company can suo moto approach ROC to strike off the company.
3. Strike off is the least expensive option as compared to going for the winding up of the Company. And if the Company has nil Assets and Liabilities, it is advised to proceed with Strike off only.
If the company incorporated in year 2011 has not filed its annual return/balance sheet can it file stk-2 without filing the annual return. Its status is still active in ROC but has received notice for removal of name since it is not carrying on any business
There is no need to file STK-2 as the ROC will strike off the name suo moto u/s 248(1) . You may at best reply to the notice issued by the RoC for removal of name that your company has not carried any business since incorporation / past 2 years and therefore, the name of the company be striked off.
how and it what format is the consent obtained in lieu of special resolution.
There is no prescribed format for consent obtained in lieu of special Resolution under Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016. However, company may obtain the same from the shareholders by mentioning the reason for striking off and obtaining authorization for making the application.
a company applying for removal of name under sec 248 of the Companies Act ,2013 has a surpus bank balance in the bank. can the surplus be paid to the Holding Company on the date the aplication for removal of name is filed with ROC
A company applying under FTE should not have any asset and liability. Before the company goes for FTE, a nil balance sheet is a prerequisite.
this is not under FTE but Sec 248 which requires a statement of account containing assets and liabilities made up to a day not more than 30 days before the date of application.
Dear Team,
According to my view term “vanishing company” means a company, registered under the Act or previous company law or any other law for the time being in force and listed with Stock Exchange which has failed to file its returns with the Registrar of Companies and Stock Exchange for a consecutive period of two years, and is not maintaining its registered office at the address notified with the Registrar of Companies or Stock Exchange and none of its directors are traceable.
I read your article wherein its mentioned that “If there is pending prosecution against the company and its directors: If the pending prosecutions are only for non-filing of Annual Returns under section 92 and Balance Sheet under section 137 of the Act, such application may be accepted provided the applicants have already filed the compounding application. However, steps for final strike of the name of the company will be taken only after disposal of compounding application by the competent authority”.
Can you please clarify under which section or rule the above criteria is mentioned, since Vanishing Company definition starts with Company, registered under the Act or previous company law or any other law for the time being in force and listed with Stock Exchange, so basically only listed entities will be falling due of not applying for strike off for non-compliance of filing of annual returns and financial statements
Thanks in advance
As per the FAQs given by MCA, this criteria has been mentioned about prosecution against the company and its directors and as per the explanation to rules of Strike off, “vanishing company” means a company, registered under the Act or previous company law or any other law for the time being in force and listed with Stock Exchange which has failed to file its returns with the Registrar of Companies and Stock Exchange for a consecutive period of two years, and is not maintaining its registered office at the address notified with the Registrar of Companies or Stock Exchange and none of its directors are traceable.
Hi Team,
Thanks for your clarification.
But according to me the word “and” listed in stock exchange is represented, so according to my interpretation its applicable only if listed companies have failed to file Annual statements.
Sir my query is that if we are going for strike off process then is it necessary to obtained Audit report from Our audit on the date of liquidation. If the Strike off form is filed before Finacial year end then is it necessary to obtain Audit Report on year end also
As per Section 248 read with rule 4 of the Companies (Removal of name of Companies from the Register of Companies) Rules, 2016, along with the application of Strike off a statement of accounts showing nil assets and liabilities of the Company in Form STK-8, to be certified by the Accountant has to be submitted. Accordingly, there is no need to obtain the Audit Report on the date of making the application for Strike Off.
Further, for filing of the form STK-2 the Company needs to file its overdue return up to the end of the financial year in which the Company ceased to carry its business operation.