Company Striking Off

Close Inactive Company Easily

An inactive or defunct company may be closed quickly by making an application in Form STK-2 to the ROC for striking off the company by the ROC. We assist companies in closing their company quickly and in 100% online mode.
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Pricing for Striking Off an Inactive Company (STK-2)
Basic

₹ 11,999/-

.
  • Eligibility check under section 248
  • Due diligence of ROC filing
  • Finalization of Account
  • Statement of A/c Preparation
  • CA Certification of Statement of A/c
  • Drafting of Affidavits & Indemnity Bond
  • Filing Form STK-2 To ROC
  • Managing Winding up Process
Silver

₹ 14,999/-

All Basic Features +
  • Surrender of PAN
  • Surrender of TAN
  • GST Surrender
  • GST Final Return(GSTR-10)

.

Gold

₹ 25,999/-

All Silver Features +
  • Dedicated Relationship Manager
  • Newspaper Notice Under section __
  • Notary Assistance at additional Cost
  • Priority Processing

.

Custom​
For a Startup that has special requirements, we can customise your package.
SCENARIO
  • More than Two Director
  • Foreign/NRI Investment
  • Capital More Than One Lakh
  • Difficulty in Registered Address

Note: Our packs DO NOT include ROC Fee of Rs. 10,000, Notary Service or the Cost of Stamp Paper.

(We will draft the documents, and you have to buy stamp paper from a local stamp vendor and get the affidavits and indemnity bond notarised)

Striking-off a Private Limited Company

The company comes into existence through a prescribed legal process of company registraion as provided under the Companies Act. Hence the same incorporated Private Limited Company or the OPC can be closed only by following the methods prescribed under the Companies Act 2013. Striking-off a company simply implies that the name of the company added in the Register of Companies during its incorporation, is being struck off by the ROC due to its prolonged inactivity or inability to commence its business operations. Unlike a wound up company, a struck-off company can be restored back upon recovering its financial health.
Play Video about Winding Up Company (STK-2)

But can a company get struck-off voluntarily?

Well, yes, but to a certain extent. The power to strike off a company ultimately lies with the ROC, which it can either do on its own will or on the will of the company. However, in either case, the LLP will have to be eligible for getting struck-off. If the company wants to get struck-off voluntarily, it will have to file an application in Form STK-2 to the ROC, proving its inactivity for the period prescribed under Section 248 of the Companies Act. Here, you also need to note that if the ROC has already issued a notice of strike-off from its end, the company cannot file STK-2 further.

Difference between Striking off and Winding Up

Under the Indian Companies Act, 2013, striking off and winding up are two different processes used to close a Company, which includes any company that is incorporated under the provisions of the Companies Act, 2013.

Striking off

Striking off is a simpler and quicker process that can be used when a company is inactive or dormant. This process involves removing the name of the company from the Register of Companies maintained by the Registrar of Companies (ROC). A company may apply for striking off voluntarily or the ROC may initiate the process if it has reasonable cause to believe that the company is not carrying on any business or operation. Striking off is generally a more cost-effective and faster process than winding up.

Winding up

Winding up, on the other hand, is a more complex and formal process that involves the liquidation of a company’s assets and the distribution of its liabilities among its creditors and shareholders. Winding up can be initiated voluntarily by the members or creditors of the company, or by an order of the National Company Law Tribunal (NCLT) in case of default or non-compliance with the provisions of the Companies Act. Winding up is a more formal and time-consuming process than striking off and involves more legal formalities.
Note: Striking off is a simpler and quicker process used when a company is inactive or dormant, while winding up is a more complex and formal process used to liquidate a company’s assets and liabilities.

Legal Provisions in the Companies Act, 2013 for Company Closure

Section 248 empowers the Registrar of Companies to strike off the name of a company in certain situations. These powers of the ROC can be invoked by the ROC itself or willingly by the company. The conditions for striking-off a Private Limited Company are mentioned in the table below. A company can be struck-off if any one of these conditions are satisfied.
Section Legal Provisions
248 (1) a
When company failed to commence its business operation with one year of its incorporation
248 (1) c
A company has not carried out any business operation for two immediately preceding financial years and has not made any application within such period for obtaining the status of a dormant company u/s 455.
248 (1) d
The subscribers to the MOA have not paid the capital amount which they were supposed to pay at the time of incorporation of a company within one hundred and eighty days from the date of its incorporation
248 (1) e
The company is not carrying out any business activity, as revealed by the physical verification of the Registered Office of the company by the ROC

Minimum Requirements to strike-off a Private Limited Company

S.No Requirements
1.
Identify the relevant clause of section 248 of the Companies Act under which it is inactive or defunct
2.
Make sure the company has not filed its annual returns to the ROC for the duration it has been defunct or inactive
3.
At least 75% of all shareholders must give their consent or pass a special resolution approving company’s closure
4.
Make sure all government dues and other liabilities of the company are paid off
5.
The current bank account of the company must be closed and the applicant must have the bank closure statement and letter
6.
Make sure that the company does not have any assets and liabilities prior to STK-2 filing
7.
The statement of Accounts stating Nil. assets and liabilities, attested by the CA have to be filed
8.
No litigation or tax assessment must be pending in the name of the company
9.
The DIN and DSC of all directors must be active

Benefits of striking-off a Company

No Compliance

Even if a company is inactive, it has to fulfil all its compliances. The best way to get rid of this burden is to strike it off.

No Penalties

Failure to fulfil compliances invites hefty penalties which an inactive company cannot bear. So, to prevent such a situation, it is better to strike it off.

Better Utilisation of Resources

There is no use prolonging the continuity of a business that is continuously failing to perform. Instead, you can shut it off and utilise whatever little resources it has for a better purpose.

Option to restore operations

Striking-off is a temporary closure and you can restore a struck off company by appealing against the ROC’s order, within 3 years from the date on which the company was struck-off.

The list of Documents Required for Company Closure

S.No Document
1.
Indemnity Bond signed by all the director (STK-3)
2.
Affidavit signed by all the directors (STK-4)
3.
Copies of consent by at least 75% shareholders, or original copy of special resolution (MGT-14) passed by the shareholders and certified by all the directors
4.
Board Resolution authorising director/MD/Manager/ Secretary to sign STK using DSC
5.
Statement of Accounts (STK-8)
6.
Bank closure statement & bank closure letter
* Note –The Indemnity Bond and Affidavit declaration by the directors must be drafted on a non-Judicial stamp paper of appropriate value. Rs.100 stamp paper is applicable for indemnity bond and Rs.50-100 is applicable on affidavits. These must be duly stamped by a public notary. The stamp duty and notary charges shall vary from state to state.

Process of striking-off a Private Limited Company

STEP 1 – Documentation
The application for striking-off a Private Limited Company is incomplete without appropriate and up to date documents. These include certain documents that can be obtained from the concerned authority and certain others that need to be drafted. Anyway, we recommend that the applicant ensures the possession of all documents before beginning the process of application filing to avoid any hindrance in the later stages.
STEP 2 – Obtain consent of shareholders
The decision to strike-off a Private Limited Company must be approved by at least 75% of its shareholders. This can be done either by obtaining their written consent or by passing a special resolution in the general meeting. Copies of the consent or resolution needs to be submitted as a document with the application for striking-off filed to the ROC.
STEP 3 – Surrender Registrations & Licences
A Private Limited Company that is about to get struck-off must surrender the registrations and licences it has obtained. Now, some registrations and licences can be surrendered before the company is struck-off and others can be surrendered only after the company is struck-off. For instance, EPF registration, ESI registration, PAN, TAN, and IEC registrations can be surrendered only after the company is closed. But GST registration can be and must be surrendered before the company is struck-off.
STEP 4 – Bank A/c Closure & Prepare Financial Statement
If the company has an existing current account, it must be closed prior to filing the application for striking off the company. Also, the bank closure statement and bank closure letter must be obtained from the banker as these are required to be submitted with the application. Additionally, financial statements must be drafted CA showing Nil. assets and liabilities of the company, and must not be older than 3 months from the date on which application for striking off is to be filed. It must be certified by a practising CA as well.
STEP 5 – Affidavit & Indemnity Bond of All Directors
An indemnity bond must be drafted and signed by all the directors declaring their personal or collective responsibility to pay-off any liability arising after a company is struck-off. Also, all the directors must draft and sign an affidavit declaring the inactivity of the company to be struck-off, for the last two financial years, or since incorporation, whichever the case may be.
STEP 6 – Board Resolution
The next step is calling a meeting of the Board of Directors to authorise someone, preferably a director, to sign the application for striking off the company. This is done by passing an ordinary resolution in the meeting.
STEP 7 – Filing of STK-2 Form
Once all the prerequisites are fulfilled, the application to strike off the company can be filed online to the ROC in form STK-2, along with all the necessary documents and with the prescribed application fee. The prescribed government fee for STK 2 form is Rs.10,000. Remember that the form must be certified by a practising CA, CS, or CMA before its submission.
STEP 8 – Strike-off by the ROC
Upon receiving the application, the ROC examines it in detail for any possible errors. If the application and the documents attached are found to be flawless, the ROC will notify its intention to strike-off the company in the Official gazette (form STK-7). The notification will remain in the gazette for a month, and if no objection from the general public is received, the ROC will strike-off the company, and its status on the MCA website will subsequently change to “struck-off”.

How can Setindiabiz Help?

Voluntarily striking off your company is the best way to go when your company has been inactive or defunct for a very long period of time. This way you can save your company from hefty operational costs when it is not generating any revenue, and restore it whenever you are optimistic about its financial health. Sounds quite convenient, right?
Well, no doubt, the idea does sound convenient, but when it comes to executing it, the process has several legal intricacies that make it unbelievably complicated for a layman. So, if you are willing to voluntarily strike-off your company, we recommend that you seek professional help, and who better for the purpose than Setindiabiz!
At Setindiabiz, we provide complete services of striking-off a Private Limited Company including,
  1. Checking its eligibility for being struck-off u/s 248 of the Companies Act
  2. Obtaining & drafting all the necessary documents
  3. Filing application form STK 2 to the ROC
  4. Tracking status of the application, till the company is finally struck-off by the ROC
We have a robust team of extremely qualified, skilled, and experienced legal experts who offer their expert guidance and assistance to you at every step of the procedure. So what are you waiting for? Contact our Startup advisors immediately, and get your company struck off in no time, and at minimal costs!

FAQs on striking-off a Private Limited Company

The Government fee for STK-2 application is Rs.10,000.
A Private Limited Company can be closed in 3 different ways.
  1. Striking off the Company by ROC by declaring it as Defunct under section 248 of the Companies Act
  2. Voluntary winding-up of company by the NCLT with the consent of at least 75% of shareholders
  3. Forceful winding-up of company by the NCLT on the appeal of the creditors, ROC, Central Government

Striking off a company simply implies that the Registrar of Companies has removed its name from the Register it maintains. This option is applicable only if the company has been defunct or inactive for a prescribed period and has nil. assets and liabilities throughout its duration of inactivity. If any liabilities still arise after striking off, the designated partners will be liable to pay them off. A company can still be restored after it has been struck-off.

On the other hand, winding up is the complete closure of an active company by the NCLT. Here, the assets and liabilities of the company are settled by an insolvency professional, and once the company is wound up, it cannot be further restored by any means. Moreover, no liabilities or amounts are due after the company is wound up.

A company’s Financial statements and annual returns in forms AOC-4 and MGT-7 need to be filed for the financial years during which the company was active. For example, if the company was active until 25th October 2020, then the FY 2020-21 annual return must be filed before the company Striking Off application is filed.
After a company is struck-off:
  • It’s name is removed from the Register of companies maintained by the ROC
  • It shall cease all its business operations immediately
  • Its Certificate of Incorporation shall be considered as cancelled for all purposes other than for identifying and paying-off the companies dues and liabilities arising after it has been struck-off
After filing STK-2, the registrar may take two weeks time in accepting the application and approving the application. Once approved, intimation is sent to the commissioner of income tax, for raising objections, if any. The ROC further publishes the names of companies who have applied for closure on their website for public viewing and inviting opposition against the closure of the company from the public at large. If the ROC does not receive any objections from either the Income Tax Department or the general public, he shall strike-off the company. The entire process may take around 2-3 months of time.
To restore a struck-off company, an appeal against the order of ROC has to be made in the NCLT within 3 years from the date on which the notice for strike-off was published in the official gazette by the ROC.
The Government fee for STK-2 application is Rs.10,000.

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