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Nowadays, the incorporation and emergence of new companies have become common. But there are certain existing companies who want to close due to different reasons. The closure of Companies can be by fulfilling some specific documentation and conditions as per law. Section 248 of the companies Act 2013, talks about the Power of Registrar for Removal of Name of Company from ROC. In the blog, we will discuss the Process of Removal of Companies Name from Registrar of Companies (ROC).
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Conditions before the Removal of Companies Name from Registrar of Companies (ROC)
Following are the conditions before the Removal of Name of Company from Register of Companies by Registrar of Companies (ROC):
- The registrar has to send a notice to all the Directors declaring the purpose for the Removal of the name of the Company from ROC
- The Directors have to send the reply to the notice along with a copy of important documents
- All assets and liabilities of the Company must extinguish before the Removal of the Name of Company from ROC.
- There shall be no pending litigations against the Company.
- A Special Resolution shall be passed in the Extraordinary General Meeting; or consent of 75% of the shareholders in terms of the paid-up capital shall be given for the Removal of Name of Company from ROC.
- The annual returns and financial statements should be filed up till the end of that financial year, in the year when the Company ceased to carry on business or operations,
Modes for the Removal of Name of Company from ROC
The followings are the various modes for the Removal of Name of Company from ROC:
Removal by Registrar
According to Section 248(1) the Registrar of Company, can Suo moto on the following grounds and can go for Removal of Name of Company from Register of Companies:
- I f the Company fails to commence its business within 1 year of Incorporation,
- Or, within 180 days of the Incorporation subscribers to the Memorandum of Association (MoA) of Company have not paid the subscription. Also, no declaration to this effect as per Section 11(1) of the Companies Act, 2013, has been filed by the Company within 180 days of Incorporation.
- Or, for a period of two preceding financial years, the Company has been not carrying any operation or business. Also, no application for obtaining the dormant status as per Section 455 of the Companies Act, 2013, has been made in such two financial years.
Removal by Company on its own accord
As per Section 248(2), a Company on its own accord can go for the Removal of Name of Company from ROC. It can make an application to the Registrar of Companies for the Removal of Name of Company on all or any of the grounds under Section 248(1) of the Act.
Before making application for removal of name the Company must extinguish all its assets and liabilities. The shareholders assent is important to go further for filing the application for Removal of Name of Company from ROC.
Registrar of Company, on receipt of the application from the Company, can give a public notice for the same. Further, if a company comes under any Special Act, an approval in the form of No Objection Certificate (NOC) is necessary from the regulatory body established under the such Act.
Process of Removal of Companies Name from Registrar of Companies (ROC)
Following are the Process of Removal of Companies Name from Registrar of Companies (ROC):
By Registrar
The process of Removal of Name of Company from ROC by Registrar are as follows:
- The registrar has to send a notice to all the Directors declaring the purpose for the Removal the name of Company from the Register of Companies in writing in Form SKT-1 at the addresses available in records by registered post or by speed post.
- The notice shall comprise the reasons for the Removal of Name of the Company. It shall also try to find representations against the action proposed by the Registrar. The Directors should give the representations within 30 days from the date of the notice with the important documents.
- The notice issued shall be available in Form STK-5, Form SKT-6, and also in the Official Gazette to inform the general public.
- The registrar can remove the name of Company from Register of Companies after the expiration of time limit given in notice. They shall also publish the same in the Official Gazette, and on publication in Official Gazette, the Company must stand dissolve.
- The Registrar shall satisfy himself/herself that adequate provisions have been made for discharging all the liabilities and responsibilities and realizing all amounts due to Company within a reasonable time by the Company before passing an order under Section 248(5) of the Companies Act, 2013. However, if it is essential, the Registrar can take some undertaking from the persons in charge of the management of Company, or Directors, or Managing Directors
By Company on its Own Accord
The following are the process of Removal of Name of Company from ROC by Company:
Convene Board Meeting
The passing of the Board Resolution for Removal of Name of Company from ROC will be in a board meeting. The Resolution will be subject to the approval of the members of the Company.
Call for Extraordinary General Meeting
To Call for Extraordinary General Meeting:
- A notice has to be sent to all the Shareholders with a copy of the notice passed in the Board Meeting
- The notice of Extraordinary General Meeting must be sent at least 21 days prior to the date of the Extraordinary General Meeting
Hold Extraordinary General Meeting
An Extraordinary General Meeting must be held for attaining the shareholder’s approval for the Removal of Name:
- by passing a Special Resolution or obtaining shareholder’s approval;
- or by getting the assent of 75% of members in terms of paid-up share capital of the Company.
File Application to Registrar of Companies
The filing of application for Removal of Name of Company must be by the Company in Form SKT-2. The application shall have signatures of the company’s Directors.
The following attachments is necessary with Form SKT-2:
- Indemnity Bond in Form SKT-3 which is duly certified by the Director of Company
- NOC (No Objection Certificate) from the regulatory authorities under which the company’s registration took place
- Statement of account in Form SKT-8 declaring the assets and liabilities of the Company. The statement must be within 30 days of the application. Further, an expert Chartered Accountant (CA) shall verify the statement.
- All directors must give an Affidavit in Form SKT-4.
- The Copy of Special Resolution passed in Extraordinary General Meeting; or consent of 75% members of Company in terms of paid-up share capital of Company.
- A Statement, if any, concerning the pending litigations in court comprising the Company.
Certification by CA/CS/CMA
An expert Chartered Accountant, Company Secretary, or Cost Accountant in whole-time practice shall verify the Form SKT-2.
Publication of Notice and Objections
The Registrar of Companies will publish a notice to call any objections against the offered Removal of Name of Company. The objection will be sent to the Registrar within 30 days from the date of publication of the notice.
Further, there shall be:
- a publication of notice on the official website of the Ministry of Corporate Affairs;
- the publication of the same in the Official Gazette;
- or in a leading English newspaper and at least in one vernacular language newspaper where the Company’s registered office is.
Nevertheless, the Registrar shall also inform the regulatory authorities which regulate the Company, about the offered notice for Removal of Name of Company from him/her, and try to find any objections from them.
Undertaking by Directors
The Registrar shall satisfy that adequate provisions have been made for:
- discharging all the liabilities and responsibilities and
- realizing all amounts due to Company within a reasonable time by the Company.
However, if it is essential, the Registrar can take some undertaking from the persons in charge of the management of Company, or Directors, or Managing Directors.
Further, the liability of the Director or manager, or other members of the Company shall continue even after the dissolution of the Company.
Dissolution of Company
After telling of all the consequences the registrar, shall go for Removal of Name of Company from ROC. He shall also publish a notice of Removal in the Official Gazette in Form SKT-7.
So, after publication in the Official Gazette, the Company shall stand dissolved from the date mention in there.
Necessary Documents needed with Form STK-2
The following are the enclosures that must be with Form STK-2:
- The statement of account presenting NIL Asset and NIL Liability
- A Board resolution for closure of Company
- A Copy of the Special Resolution if any
- Bank Account Closure Letter
- Consent letters from shareholders
- An indemnity bond dully certified by all director in Form STK-3 on the Stamp paper of Rs. 100
- Address Proof of the directors dully certified by expert Chartered Accountant
- A certified affidavit of directors in Form STK-4 on the Stamp paper of Rs. 20
- Newest ITR Acknowledgement copy of the company
- The Holding Company Approval BR in case Subsidiary Company is getting Strike off;
Conclusion
Therefore, section 248 of the companies Act, 2013, gives the Power of Registrar for Removal of Name of Company from ROC. The removal can be by the registrar of the companies or by companies of their own accord.
