The process of striking off is an alternative mechanism to the winding up of a company.  The Companies Act facilitates two modes of strike-off – namely, strike off by the ROC (Registrar of Companies) under Section 248(1) of the Companies Act 2013, and strike off by a company on its own accord under Section 248(2) of the Companies Act, 2013.

1. Strike Off a Company-
MCA Procedure

2. Strike Off of Company
• The process of striking off is an alternative mechanism to the winding up of a company.
• The Companies Act facilitates two modes of strike-off – namely, strike off by the ROC (Registrar
of Companies) under Section 248(1) of the Companies Act 2013, and strike off by a company on
its own accord under Section 248(2) of the Companies Act, 2013.

3. Grounds for Strike off
The provision of
strike-off could be
enacted on the basis
of the following
grounds:
The company
hasn’t commenced its
business within one
year of its
incorporation.
The company hasn’t been
pursuing any business or
activity for the preceding
two financial years, for
which it hasn’t sought the
status of Dormant
Company under Section
455 of the Act.

4. Dormant Company
• The word dormant, in general terms, means inactive or
inoperative.
• Similarly, a company is classified as dormant if it has been
registered under the Companies Act for a future project or
to hold an asset or intellectual property but isn’t pursuing
any significant accounting transactions.
• To gain the classification though (which has its own
benefits), the Company must file an application to the
Registrar. The concept of dormancy was introduced to the
corporate provisions in the Companies Act of 2013.

5. Strike Off by ROC
The Registrar of Companies may issue a notice to the Companies and
its Directors in Form STK-1 (Removal of Names of Companies from the
Registrar of Companies) if he/she holds a reasonable cause as
specified above.
Such a notice would inform the respective companies of the removal
of its name from the record and request it to send its representatives
with the requisite documents within thirty days of the issue of such
notice.
This process is also referred to as Compulsory removal of name
from the Registrar of Companies.

6. Strike off on the Company’s Accord
A company may file an
application to the Registrar
of Companies in E-Form
STK-2 after closing off its
liabilities.
This could be performed by
passing a special
resolution, which must be
consented by seventy-five
per cent of its members.

7. Checklist for Strike Off
• Companies may pursue a strike off by following each of the following specified
procedures:
The Holding of Board Meeting
• The passing of Board Resolutions has been mandated for major enactments in the
corporate sphere.
• A resolution for the purpose of this provision could be passed by a company through a
Board Meeting, after which any of its directors would be designated to make an
application to the Registrar of Companies (ROC) for strike off.
Closing off Liabilities
• A company desirous of a strike off must have closed off all its liabilities.

8. Holding of General Meeting
• A general meeting of shareholders should be held by the company by passing a resolution for
striking off the name of the Company.
• This resolution must be backed by 75% of its members as per the paid-up share capital of the
Company.
• After this stage, the Company would be necessitated to file E-form MGT-14 within a time-frame
of thirty days.

9. Restrictions on Making Applications for
Strike Off
• Companies are restricted on filing applications for strike-off, if at
any time during the last three months, it has:
• Changed its name or relocated its registered office to another
state.
• Made a disposal for the value of property or rights held by it
(subject to conditions).
• Engaged in any other activity other than what is necessary or
expedient for making an application under the concerned
provision, and so and so forth.
• Filed an application to the Tribunal for the granting of
Compromise or Arrangement, and a consensus for the same
hasn’t yet been arrived at.

10. Non-Qualifying Companies
The following companies do not qualify for the provision of strike off:
• Listed companies.
• Companies delisted on account of non-compliance of listing regulations, listing agreement or
any other statutory laws.
• Vanishing companies.
• Companies which has been listed for inspection or investigation – if such directive is being
carried out/pending/completed but the prosecutions concerning such inspection or investigation
are pending in the Court of law.
• Companies which hasn’t yet responded to notices of select provisions.
• If the prosecutions related to the above two provisions are pending in a Court of law.
• Companies against which any case for prosecution is pending in a Court of law.

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