Strike Off of the Name of the Company

Neethi V. Kannanth | Last updated: 17 March 2022

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This article outlines the official procedure for striking a company's name off the register. It details the grounds on which the Registrar can initiate removal, such as inactivity or failure to commence business. Alternatively, a company can apply for removal after settling all liabilities and passing a special resolution or obtaining member consent. The process involves notices, publication in the Official Gazette, and potential undertakings from management, with director and member liabilities continuing even after dissolution.

In this article, I have explained the procedure for striking off the name of the companies from the register of companies.

1. The name of the company can be striked off from the register of the company on the following grounds-

- If the Registrar has reasonable cause to believe that:

A company has failed to commence its business within one year of its incorporation or,
A company is not carrying on any business or operation for a period of two immediately preceding financial years and has not made any application within such period for obtaining the status of a dormant company or,
The subscribers to the memorandum have not paid the subscription which they had undertaken to pay at the time of incorporation of a company and a declaration to this effect has not been filed within 180 days of its incorporation under section 10A(1) or,
Upon physical verification under section 12(9) it is revealed that the company is not carrying any business or operation.

Then, he shall send a notice to the company and all the Directors of the company, about his intention to remove the name of the company from the register of companies and requesting them to send their representations along with copies of the relevant documents, if any, within a period of thirty days from the date of the notice.

Strike Off Company Name: The Official Procedure

The notice shall also be published in the Official Gazette.

- A company may, after extinguishing all its liabilities, pass a special resolution or obtain the consent of 75 percent of members in terms of paid-up share capital, file an application to the Registrar seeking removal of the name of the company from the register of companies on all or any of the grounds specified in point 1 above. In case of a company regulated under a special Act, approval of the regulatory body constituted or established under that Act shall also be obtained and enclosed with the application.

The Registrar shall, on receipt of such application, issue a public notice and such notice shall also be published in the official gazette.

Nothing mentioned above is applicable to the Section 8 Companies

2. Upon expiry of the time mentioned in the notice, the Registrar may, unless cause to the contrary is shown by the company, strike off its name from the register of companies, and shall publish notice there of in the Official Gazette, and on the publication in the Official Gazette of this notice, the company shall stand dissolved.

3. Before passing an order for striking off the name of the company from the register of companies, the registrar shall satisfy himself that sufficient provision has been made for the realization of all amount due to the company and for the payment or discharge of its liabilities and obligations by the company within a reasonable time and, if necessary, obtain necessary undertakings from the managing director, director or other persons in charge of the management of the company.

However, the assets of the company shall be made available for the payment or discharge of all its liabilities and obligations even after the date of the order removing the name of the company from the register of companies.

4. The liability, if any, of every director, manager or other officers who was exercising any power of management, and of every member of the dissolved company, shall continue and may be enforced as if the company had not been dissolved.

5. Nothing in this section shall affect the power of the Tribunal to wind up a company the name of which has been struck off from the register of companies.

FAQ :

The Registrar can strike off a company's name if it hasn't started business within a year of incorporation, hasn't conducted business for two preceding financial years without seeking dormant status, or if subscribers haven't paid their share and a declaration wasn't filed within 180 days. Physical verification revealing no business activity is also a ground.

Yes, a company can apply to have its name struck off after extinguishing all its liabilities. This requires passing a special resolution or obtaining consent from 75 percent of members based on paid-up share capital.

After sending a notice, the Registrar publishes it in the Official Gazette. If no cause to the contrary is shown by the company within the specified time, the Registrar may strike off the name, and the company will be dissolved upon publication of this notice.

Yes, the liability of every director, manager, officer, and member of the dissolved company continues and can be enforced as if the company had not been dissolved.

No, striking off a company's name does not affect the power of the Tribunal to wind up a company.