Every company starts with a vision to run forever, but not all the companies are able to do so. Just like there are provisions for the incorporation of a company, functioning of a company there are provisions for the closing of a company. One of the way to close a company is the striking off of a company's name.

Striking off of a company simply means closing a defunct company. It is the simplest way to close a company. It means removal of the company's name from the records (Register of Companies) at the Registrar of Companies (ROC).

Section 248 to Section 252 of the Companies Act,2013 along with Companies (Removal of Names of Companies from the Registrar of Companies) Rules,2016 provides with the provisions relating to striking off of a company's name.

Companies Eligible for Striking off:

1. Private Company
2. Public Company
3. One-person Company

A section 8 company cannot apply for its strike off, however there are provisions allowing the conversion of a section 8 company into a public or a private company which are allowed to apply for strike off.

Ways of Striking Off of Companies:

1. By Registrar of Companies threw suo-moto
2. By Voluntary application by company

Strike Off by ROC
Subject to the conditions mentioned under section 248 to 252 of Companies act 2013 read with Rule 3 of Companies (Removal of Name of Companies from the Registrar of Companies) Rules, 2016, ROC can remove the name of the company from its Register by suo-moto, if the company falls under the following cases:

1. If an existing company fails to commence its business within 1 year from its date of incorporation.
2. If a company is not conducting any business operations for a period of 2 immediately preceding financial years, has not made any application with ROC to obtain the status of dormant company.
3. When the subscribers of MOA have not paid the subscription and the Declaration of Commencement of Business has not been filed within 180 days of the date of incorporation of the company.
4. After the physical verification it is found that the company is not carrying on any operations.

Procedure:

1. Service of Notice:
   The registrar is required to send a notice in Form STK 1 to the company and all its directors, regarding the intention to remove the name of the company from the register of companies. The notice shall contain the reasons for which the name of the company is being removed.
    
2. Reply to the Notice:
   On receipt of the notice, the company and all its directors shall send their representations along with the relevant documents (if any), explaining the reasons as to why the company's name shall not be removed from the register of companies, within 30 days from the date of the notice.
    
3. Consideration for representation made by the company:
   The ROC will consider the representation made by the company and its directors. If the ROC is not satisfied with the reasons given, then it may proceed to strike off the company's name.
    
4. Publication of notice:
   The notice for strike off company should be published for the information of the general public in Form STK 5A, the said notice should be:
   • Placed on MCA website
   • Published in the Official Gazette
   • Published in Form No. STK 5A in English language in a leading English newspaper of the state and in at least one leading vernacular language newspaper in the state where the registered office of the company is situated. Such publication is required to inform the general public about the strike off of the company and for them to submit their objections (if any) regarding this to the ROC within 30 days from the date of publication of notice.
      
5. Intimation to regulatory authority:
   Intimation about the strike off the company's name should be given to the Income-tax authorities, central excise authority, and service-tax authorities of the state in which the registered office of the company is situated at. Such intimation is given so that any of the authority if having any objection regarding the strike off can submit to the concerned ROC within 30 days from the date of notice of the intimation.
    
6. Strike off/Removal of the company's name:
   After the expiry of 30 days from the date of publication of notice and intimation to the regulatory authorities, if there are no objections received from the general public or the respective authority and unless cause to the contrary is shown by the company, the ROC can proceed to strike off the company's name from its Register of Companies.
    
7. Provision for realization of the amount due:
   The ROC before passing the order of striking off the company's name should make sure that sufficient provision has been made for the realization of the amount due to the company also for the payment/discharge of liabilities of the company within a reasonable time.
    
8. Notice of dissolution of the company:
   After the expiry of the time mentioned in the notice, the ROC can strike off the name of the company from its Register of Companies. The notice should be published in the Official Gazette in Form STK 7, and the same should also be published on the official website of MCA. The company shall stand dissolved after publication in the Official Gazette.

Strike Off by Company
There are many companies which are not operative but are still registered with ROC. The provisions mentioned under section 248(2) of Companies Act, 2013 read with Rule 4 of Companies (Removal of Companies Name from Register of Companies) Rules, 2016 provides such companies to apply for the removal of their name from the Register of Companies.

If the members of a company after passing a Special Resolution resolves that the name of the company should be struck off from the Register of Companies, then the company can, after extinguishing all its liabilities, submit an application for the same along with the prescribed fee to the concerned ROC.

After receiving the application, the ROC shall publish a notice informing the public about the receipt of such application also giving a chance to the general public and the creditors of the company to submit their objections (if any) regarding the proposed application.

In case no objections are received by the ROC after the time mentioned in the notice, the ROC may proceed to strike off the company's name and thereof shall publish a notice about the same in its Official Gazette. On publication of notice in the Official Gazette the company shall stand dissolved.

Types Of Companies Which Cannot Be Removed Under These Provisions:

1. Listed Companies
2. Section 8 Companies
3. Companies whose charges are pending for satisfaction
4. Companies whose application for compounding is pending
5. Companies against any prosecution is present for any offence under any court
6. Vanishing Companies
7. Companies that have been delisted
8. Companies on whom investigation or inspection was ordered and is pending
9. Companies whose public deposits are pending or the company is in default for the repayment of the same
10. Companies to whom notices were issued by ROC or Inspector whose reply or report is pending

A Company shall not make any application for strike off if it has conducted any of the below mentioned activities within the previous 3 months;

1. Changed its name
2. Shifted its registered office from one state to another
3. Made a disposal for value of property/rights, immediately before cesser of trade, for the purpose of gain in normal course of business.
4. Engaged in other activity other than that which is necessary for the purpose of making the application or for compliance of any other regulation.
5. Made an application with the tribunal for sanction of a compromise/agreement and the matter is still pending.

Procedure of striking off company's name by the of an application to ROC

1. Conduct a Board meeting to pass a Board Resolution in motion for striking off of the name of the company.
2. Sending of notice for Annual General Meeting/Extraordinary General Meeting as case may be.
3. Exhaust all the liabilities of the company.
4. Every director should sign and execute indemnity bond in Form STK 3 and an affidavit in Form STK 4.
5. Company should get a statement of accounts in Form STK 8, which shall be certified by a Chartered Accountant, not more than 30 days from the date of application.
6. Convene General Meeting and pass a Special Resolution.
7. Within 30 days from the date of passing of the SR, company should file MGT-14 along with required documents.
8. Application for the removal of the company's name shall be made in Form STK 2.
9. ROC after verifying all the attached documents and confirming all the conditions, finds that the company's strike off just and equitable may proceed to do so after publishing the public notice.

10. Documents to be attached in Form STK 2:

    NOC from the concerned authority, if any.
    Indemnity Bond duly notarized by every director of the company in Form STK 3.
    Affidavit by every director in Form STK 4.
    Account Statement certified by CA in Form STK 8.
    Certified true copy of Special Resolution.
    Statement regarding pending litigation, if any.
     
11. E-Form STK 2 shall be signed by an authorized director and shall be certified by Practicing Company Secretary, Practicing Chartered Accountant, Practicing Cost Accountant.
12. ROC shall publish public notice in Form STK 6 inviting objections (if any) to proposed strike off.
13. Intimation should be sent to all the concerned regulatory authorities seeking their objections (if any), the same shall be furnished within 30 days from the date of issue of the letter of intimation.
14. After the expiry of the time limit from the date of issue of intimation and unless cause to the contrary is shown by the company, if there are no objections received, the ROC may proceed to remove the company's name from its Register of Companies.
15. The ROC before passing an order for the striking off of the company's name should ensure that sufficient provision has been made for the realization of the amount due to the company as well for the discharge of all its liabilities within a reasonable time.
16. After the expiry of time mentioned in the notice of dissolution of the company, ROC can strike off the company's name from its Register of Companies. The notice shall be published in Form STK 7 in the Official Gazette.

Status of Strike Off Company
If a company stands dissolved under section 248 of the Companies Act, 2013, it shall on and from the date mentioned in the notice of dissolution of cease to operate as a company and its Certificate of Incorporation shall be deemed as cancelled except for the purpose of realisation of amount due to the company and for the discharge of its liabilities.

Fraudulent Application for Removal of Company's Name
If it is found that an application of strike off has been made by the company with an object of evading its liabilities or to defraud any other persons, then the persons incharge for the management of the company shall, notwithstanding that the company has been notified as dissolved will be liable for the following;

1. Jointly and severally liable to any person/s who has incurred loss or damage as a result of the company being dissolved
2. Punishable under section 447 of Companies Act,2013.

Conclusion
The option of strike off gives companies a way to dissolve its self easily. It also allows the ROC to check if the companies are adhering to the provision of law, along with protecting the interest of everyone involved. In this article we have come across the provisions relating to striking off of companies name as well the procedure for the same.