Compliance & Governance
Company Closure
Once incorporated, a company's name stays on the ROC's Register of Companies unless dissolved by law. If a company is defunct — non-operational or non-functioning — 'striking off' offers an alternative to formal dissolution.
Manage Company Closure, Starting @ ₹5,499*A company's name can be removed from the Register either on the Registrar's own initiative (suo motu) or voluntarily by the company. The Registrar can strike off a company suo motu if it has failed to commence business within a year of incorporation, has not operated for two preceding financial years without applying for dormant status, has unpaid subscription with no declaration filed within 180 days, or physical verification reveals no operations.
Companies That Cannot Be Struck Off
- Listed companies.
- Companies registered under Section 8.
- Companies with charges pending satisfaction.
- Companies with a pending compounding application.
- Companies with a pending prosecution in any court.
- Companies delisted for non-compliance with listing regulations.
- Companies under inspection, investigation, or related pending prosecution.
- Companies with outstanding or defaulted public deposits.
- Companies with pending statutory notices or inquiries under the Companies Act.
Conditions for Voluntary Strike Off
A company can apply to be struck off through its Board of Directors if it has failed to commence business within a year of incorporation, or has not carried on business for two preceding financial years without applying for dormant status. The Board must clear all liabilities, and shareholder approval is required before filing.
Procedure for Striking Off
- 1
Convene Board Meeting
Pass a board resolution to authorize a director to apply to the ROC. Clear all liabilities, and have every director sign a notarized indemnity bond (STK-3) and affidavit (STK-4). Prepare a statement of accounts, signed by a chartered accountant and the directors, dated within 30 days of application.
- 2
Convene General Meeting
Pass a special resolution for striking off, with consent from at least 75% of members by paid-up share capital, or an NOC from 70% of shareholders.
- 3
File MGT-14
File MGT-14 within 30 days of the special resolution, followed by the strike-off application in Form STK-2 with the fee.
Documents Required (Form STK-2)
- NOC from the concerned authority, if required (RBI, IRDA, Housing Finance, SEBI, etc.).
- Indemnity Bond from every director (Form STK-3).
- Statement of Accounts (Form STK-8).
- Affidavit from every director (Form STK-4).
- Certified true copy of the special resolution / shareholder consent.
Effect of Strike Off
Once struck off, the company stops existing as a company from the date on the notice, and its Certificate of Incorporation is treated as cancelled — except for realising amounts due to the company and settling its liabilities.
Penalties
Filing a strike-off application in violation of the rules can attract a fine of up to ₹1 lakh. If the application is made to evade liabilities or defraud creditors, those managing the company remain jointly and severally liable for resulting losses, and are punishable for fraud under Section 447 — the Registrar may also recommend prosecution.
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