CS Divesh Goyal
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SHORT SUMMARY Whether Completion of Annual filing is Mandatory for Strike Off of Company through filing of STK-2? There is a difference in the views of professionals, business entities, even authorities on above mentioned question. In below mentioned editorial author will discuss the provision
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FAQ :
Yes, as per amendments made in Rule 4 in May 2019 and May 2023, overdue annual filings in Form No. AOC-4 and Form No. MGT-7 are mandatory up to the end of the financial year in which the company ceased its business operations, before applying for strike-off using Form STK-2.
The provisions for striking off companies have evolved through four phases: Section 560 of the Companies Act, 1956; the Fast Track Exit Scheme (FTE) introduced in 2011; Section 248 of the Companies Act, 2013 (effective from 2016); and the establishment of a centralised department C-Pace in May 2023.
The FTE Scheme, introduced on 7th June 2011, offered a modified route for defunct companies to get their names struck off the register. However, this scheme was omitted after the effective date of Section 248 of the Companies Act, 2013, which was 26th December 2016.
Under the FTE Scheme, filing pending statutory returns was not required before applying for strike-off. In contrast, under Section 248 of the Companies Act, 2013, it is required to file all pending statutory returns before applying for strike-off.
The requirement to file overdue returns (AOC-4 and MGT-7) before applying for strike-off became clear after the amendment in Rule 4 effective from 8th May 2019, read with the notification dated 10th May 2023.
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