Streamlining Company Closure: The Process of Striking Off

In the event that a business is formed, the name is added to the official register in the Registrar of Companies (ROC). Removal of the business's name from the registry involves specific procedures as laid out within the Companies Act 2013. The process of striking off can be a simple and affordable method to end the company's activities under specific circumstances. The article explains the most important elements of the strike-off process, including its terms and consequences.



Basics of striking off The idea of removing a business's identity from its ROC can be a feasible possibility if certain criteria are fulfilled. A company may begin the process on its own or the ROC could do it independently. The primary requirement to strike off is the inability of the company to begin operating within a year after incorporation or inactivity for two consecutive fiscal years. In addition, if the subscription payment has not been made and declared within the 180-day period from the date of incorporation, a strike could be considered.

Conditions to be a Voluntary Strike Off companies to file for voluntary strike-off that it has to meet these conditions:

  • You must get the approval of 75 percent of shareholders.
  • Resolve all obligations and liabilities.
  • Make the necessary documentation, such as the statement of the assets and liabilities as well as financial statements from the last two years, tax returns for income over the last three years and the specifics of any litigation pending.

Steps in the Striking Off Process:

  1. Board Resolution: In order to approve the strike-off application, the business's board of directors needs to approve an authorization resolution for the application for strike-off.
  2. Debt Settlement Debt Settlement: All outstanding debts should be paid off, making sure the creditors are properly addressed.
  3. Shareholder Consent: A specific resolution to strike off shares that is supported with 75% shareholder support is necessary.
  4. Government approval: If the business is registered under certain authorities, then their approval is needed.
  5. Filing Application: Send the application for strike-off (e-form STK-2) together with the required documents with the ROC.
  6. The implications of dissolution: Once approval is granted, the company stops operations and its Certificate of Incorporation is cancelled, with the exception of in the case of outstanding debts.

FAQs:

  1. What is the procedure for a business to be dismissed? The company may be struck off by the Office of the Registrar of Companies Suo Moto or via a strike initiative which is initiated by the business itself.
  2. Do all debts have to be paid prior to filing a strike-off application? A company should be able to pay all its obligations prior to making a strike-off request.
  3. What are the conditions that could lead to a business being dismissed? A business can be dismissed when it is unable to commence operations within one year after incorporation, fails to operate for two consecutive fiscal year, or does not submit the necessary declaration regarding the amount of subscription within a period of the 180-day period following the date of incorporation.
  4. Does a company that has been struck off keep its business going? The answer is no, struck-off companies can't conduct company, conduct business, or participate in activities that generate profit.
  5. Does the name of the company that was struck off be used again? Yes, the name is accessible to new businesses to utilize after striking off.
  6. Which businesses aren't eligible to receive ROC strike-off? Certain firms, including listed firms, ones that are under investigation, or who have ongoing prosecutions, aren't qualified to receive ROC strike-off.

Conclusion: 

removing your company's name off the Registrar of Companies' official registry is a method that provides an efficient method to dissolve a business in particular circumstances. In compliance with the Companies Act 2013 guidelines and taking the appropriate steps to do so, companies can end its operations, meet its liabilities, and open the way for a fresh stage in the corporate life.


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