Ministry of Corporate Affairs (MCA) issued a Notification dated 26th December, 2016 notifying Section 248, 249, 250, 251 and 252 of Companies Act, 2013, deals with Removal of Names of Companies from Register of Companies.
With the advent of new Companies Act, 2013, Corporate Governance has become the essence of all Business Houses. Under the Companies Act, 2013, removal of name under Sections 248-252 is a privilege given to the Corporate to close their dormant entities legally without any hassles. We all are aware of the situation of Dormant Companies to whom the Registrar of Companies has issued notice in form STK-1 and ask them to reply within 30 days from the date of receiving notice from the ROCs unless contrary provide the companies name will be struck off from the Registrar maintained at MCA portal official site.
In relation with the removal of name of the companies, following questionnaire is given for kind references.
When Company can make an application for removal of name with register of companies?
As per Section 248 of Companies Act, 2013, a Company may after extinguishing all its liabilities, by passing a special resolution or consent of 75% members in terms of Paid up share capital file an application in Form STK 2 with the Registrar for removing the name of the company based on the grounds mentioned in Section 248(1) i.e.
- a company has failed to commence its business within one year of its incorporation
- a company is not carrying on any business or operation for a period of two immediately preceding financial years.
Restrictions for Company to make an application for removal of name with register of companies?
In the following circumstances the company cannot make an application for removal of company under STK ROUTE:
An application under sub-section (2) of section 248 on behalf of a company shall not be made if, at any time in the previous three months, the company -
- has changed its name or shifted its registered office from one State to another;
- has made a disposal for value of property or rights held by it, immediately before cesser of trade or otherwise carrying on of business, for the purpose of disposal for gain in the normal course of trading or otherwise carrying on of business;
- has engaged in any other activity except the one which is necessary or expedient for the purpose of making an application under that section, or deciding whether to do so or concluding the affairs of the company, or complying with any statutory requirement;
- has made an application to the Tribunal for the sanctioning of a compromise or arrangement and the matter has not been finally concluded; or
- is being wound up under Chapter XX of this Act or under the Insolvency and Bankruptcy Code, 2016."
Additionally, any Company falling under the below categories cannot apply for removal of the name on suo-moto basis:-
- Listed companies;
- Companies that have been delisted due to non-compliance of listing regulations or listing agreement or any other statutory laws;
- Vanishing companies
- Companies where inspection or investigation is ordered and being carried out or actions on such order are yet to be taken up or were completed but prosecutions arising out of such inspection or investigation are pending in the Court;
- Companies where notices under section 234 of the Companies Act, 1956 (1 of 1956) or section 206 or section 207 of the Act have been issued by the Registrar or Inspector and reply thereto is pending or report under section 208 has not yet been submitted or follow up of instructions on report under section 208 is pending or where any prosecution arising out of such inquiry or scrutiny, if any, is pending with the Court;
- Companies against which any prosecution for an offence is pending in any court;
- Companies whose application for compounding is pending before the competent authority for compounding the offences committed by the company or any of its officers in default;
- Companies, which have accepted public deposits which are either outstanding or the company is in default in repayment of the same;
- Companies having charges which are pending for satisfaction; and
- Companies registered under section 8 of the Companies Act, 2013 or section 25 of the Companies Act, 1956.
When Registrar of Companies can reject the application of application for removal of name filed by the Company?
The Registrar has an authority to reject any application under the STK route if any of the above-mentioned conditions are not met.
What is the procedure to file the Application of STK 2 and required documents?
- A company may, after extinguishing all its liabilities, by a special resolution or consent of seventy-five per cent members in terms of paid-up share capital, file an application in STK-2 to the Registrar for removing the name of the company from the register of companies along with the fee.
- A statement of accounts showing the assets and liabilities of the Company made up to a day, not more than thirty days before the date of application and certified by a Chartered Accountant;
- Copy of Board resolution authorizing the filing of this application;
- Copy of special resolution passed or copies of consent obtained under sub-section (2) of section 248, as applicable;
- Indemnity bonds [to be given individually or collectively by the director(s)] in Form No. STK-3;
- Affidavit in Form No STK-4;
- Copy of order of the concerned regulatory authority, if any, approving the filing of this application;
- Copy of relevant order for delisting, if any, from the concerned Stock Exchange;
- Other attachments as per applicable Rule.
Cost involved for filing Form STK-2?
The Cost involved are as follow:
- E-Form STK-2 Filing fees: Rs 5000/-;
- Affidavits and Indemnity: Value as per respective state Stamp Act;
- Professional Fees: Vary from Professional to Professional.
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Tags Corporate Law