Strike Off of Company

The way companies act has prescribed the process for the incorporation of the company in the same way companies act has prescribed the process, conditions and method for the closure of the company.

As of date the company act has prescribed two ways/methods to close the company:

1. Strike of company
2. Winding up of company

As of Now in this blog we will have a brief preview over the strike off of the company under section 248 of the Companies Act, 2013.

• What is strike off ?

If we go by the literal meaning of the strike off then Strike Off means removing the name of the Company from the Register of Companies maintained by the Registrar of Companies.

• (a) A company has failed to commence its business within one year of its incorporation;
• (b) A company is not carrying on any business 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;
• (c) the subscribers to the memorandum have not paid the subscription amount and a declaration to this effect has not been filed.

• By ROC, If
• (a) A company has failed to commence its business within one year of its incorporation;
• (b) A company is not carrying on any business 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;
• (c) the subscribers to the memorandum have not paid the subscription amount and a declaration to this effect has not been filed.
• (d) the company is not carrying on any business or operations, as revealed after the physical verification carried out
• the ROC will cause a public notice to be issued in the prescribed manner
• At the expiry of the time mentioned in the notice, the Registrar may, unless cause to the contrary is shown by the company, strike off its name from the register of companies, and shall publish notice thereof in the Official Gazette, and on the publication in the Official Gazette of this notice, the company shall stand dissolved.
• By Company, If
• (a) Extinguishing all its liabilities
• (b) Taking approval from Members by special resolution
• (c) A company has failed to commence its business within one year of its incorporation;
• (d) A company is not carrying on any business 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;
• (e) the subscribers to the memorandum have not paid the subscription amount and a declaration to this effect has not been filed.
• (f) the company is not carrying on any business or operations, as revealed after the physical verification carried out
• Once any of the above mention condition is satisfied the company will file application with ROC for removing the name of the company and on receipt of such application,the ROC will cause a public notice to be issued in the prescribed manner
• At the expiry of the time mentioned in the notice, the Registrar may, unless cause to the contrary is shown by the company, strike off its name from the register of companies, and shall publish notice thereof in the Official Gazette, and on the publication in the Official Gazette of this notice, the company shall stand dissolved.

If a company files application under section 248 (2) in violation of 249(1), it shall be punishable with fine which may be extend to Rs. 1 Lakh.
An application filed under section 248(2) shall be withdrawn by company or rejected by Registrar as soon as conditions under sub-section (1) are brought to registrars notice.