How To Close A Company In India
Voluntary shutdown or strike-off
The Companies (Removal of names of companies from the register of companies) Rules, 2016 read with Section 248-252 of the Companies Act, 2013 deals with the removal of names of companies from the Register of Companies.
When can a company apply for winding up?
1. When the company has not commenced its business within 1 year of incorporation; or
2. When the company is not carrying on any business or activity for the last 2 financial years and has not sought the status of a dormant company under section 455 of the Act.
3. Subscribers to the Memorandum have not paid the subscription amount and a declaration to this effect has not been filed within 180 days of its incorporation; Section 248(2) - Statutory Provisions
4. A company after liquidating all its liabilities and passing a special resolution can apply to the registrar to strike in e-Form STK-2 for deletion of the name of the company. STK-2 Form is required to be signed by the Director and should also be attested by CS/CA/CWA Practice.
5. The fee for filling STK-2 form is Rs.10,000/-. (Increased from Rs.5,000/- vide amendment dated 08th May 2019)
Voluntary strike-off procedure (dissolution of the company)
- To hold a meeting of the Board to discuss and decide on a voluntary strike under section 248(2);
- Pay off all liabilities before conducting the EGM;
- To convene the EGM to pass a special resolution;
- File a special resolution in MGT-14 within 30 days;
- File STK-2 Form with the following documents:
- Indemnity bond duly notarized in Form STK 3 by each director;
- Statement of accounts in Form STK-8 including assets and liabilities of the company, maintained for one day, not earlier than 30 days from the date of application and certified by a Chartered Accountant;
- An affidavit in Form STK 4 by each of the directors of the company;
- CTC of a special resolution duly signed by each director
- In the case of a company regulated by any other authority, the approval of such authority shall also be required;
- A statement regarding any pending litigation involving the Company;
- After receipt of an application, the ROC shall publish a public notice STK-6 to take objection from the public on the proposed strike;
- The notice shall be published on the website of the Ministry of Corporate Affairs, in the Official Gazette and one leading English newspaper, and at least one local language newspaper where the registered office of the company is situated.
- The ROC shall simultaneously inform the relevant regulatory authorities regulating the company, i.e. CBDT and CBEC, about the proposed action to remove or remove the names of such companies under the jurisdiction of the company and seek objections, if any.
- After following all the procedures, the ROC will disconnect the name and dissolve the company by sending a notice in STK-7 in the Official Gazette.