Closure of Company

Section 248(1) of Companies Act, 2013: ROC’s Power to Strike Off:

Circumstances under which ROC can remove the name of the Company on its own:

1. Failed to commence business within one year of its incorporation.

2. Not carrying on any business or operation of two immediately preceding financial year and has not made any application for obtaining the status of a dormant company.

3. Subscribers to the memorandum have not paid the subscription money and a declaration to this effect has not been filed.

4. Not carrying on business or operations as found out from physical verification.

* Before removing the name, MCA shall serve a notice of its intention on all the directors of the Company.

Section 248(2) of Companies Act, 2013: Power of company to apply for voluntary removal of its name.

A company can file a voluntary application on all or any of the following grounds specified above.

Key provisions:

1. Conditions for Strike Off:

• Company shall not have any outstanding liabilities.

• Company shall file its pending Financial Statement and Annual Returns up to the end of the financial year in which the company ceased to carry its business operations.

• Company shall close all bank accounts.

2. Application Process:

• The company shall pass the required resolutions for strike-off.

• The company shall file an application in Form STK-2 and Form MGT-14 (if applicable) with the ROC with necessary attachments including but not limited to Statement of Accounts, Indemnity Bond.

• Pay MCA fee of INR 10,000.

• Practicing Company Secretary or Practicing Chartered Accountant or Practicing Cost Accountant certification is mandatory.

3. ROC Powers: Upon receiving the application, the ROC shall:

• Publish a notice for the general public to raise objections.

• If no objection is received within specified days, the ROC can proceed with striking off the name of the company.

Applicable Rules:

The Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016: