Company Closure/Strike Off - Overview
When the company is incorporated, a Certificate of Incorporation is issued by the Registrar of Companies in acknowledgment of the existence of the company. Once the name of the company is entered into the registrar of the company, it cannot be removed unless the company itself applies for it or the closure is processed by law. When the corporate fails to commence its business or fails to submit yearly returns, the registrar may suo moto remove the corporate by sending a notice to its registered office address.
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Company Closure/Strike Off Registration Package
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- Certified true copy of board resolution for authorisation given for filing this application.
- Registered Digital Signature Certificate of director for signing the form.
- Memorandum of association of the Company
- Article of Association of the Company.
- Proof of identity (PAN Card/Aadhar Card/Voter ID card).
- Residence proof (Passport/Driving License/Voter ID Card)
- Statement of account duly certified by a chartered accountant.
- Affidavit in Form STK-4 and Indemnity bond in Form STK-3 duly notarised.
- Certified true copy of special resolution
If we pass the literal meaning of the strike-off, it denotes removing the name of the company from the Register of Companies maintained by the Registrar of Company. it's more like a Closure of the company and thus the corporate won't be alive after being Struck Off and can't perform any operation thereafter.
It usually takes a minimum of three months for an organization to be officially dissolved, but the length of some time can vary considerably if the tactic is complex. However, a corporation will cease to exist in not but 3 months from the winding-up notice being advertised within the Gazette. However, some companies may apply under means exit mode for Striking Off its name.
- - As per the businesses Law, a corporation won't be eligible for cross off under the subsequent circumstances:
- - The corporate is incorporated after 2nd November 2018, but it's not filed 20A.
- - One year isn't completed since incorporation.
- - For ongoing company i.e having business transactions within the last 1-2 years.
- - DIN is deactivated.
- - Any director is disqualified.
- - Company has already received notice from ROC for closure.
- - Any ongoing litigation is pending.
What does the strike-off of a company mean?
Strike Off is a business term for removing the name of the Company from the Register of Companies maintained by the Registrar of Companies. It is more like a Closure of the Company and the Company will not be in existence after its removal and cannot perform any operation thereafter.
What is the procedure for Closing a Private Limited Company?
Shutting down a corporation can be a lengthy and complicated procedure. Private Ltd. companies are often closed down in various manners counting on the wants of the owner.
- (a) The owner can sell the company.
- (b) Can close the organization by declaring the company 'Non -operational' (Striking of the company).
- (c) Winding up or dissolving the company.
If compliance is never done during incorporation, can strike off be done? If yes, then how?
Strike can be done only after one year of incorporation even without an annual filing subject to active DIN and no business for one year.
If compliance is done only for one year or two, and not up-to-date, what to be done?
For a company having ongoing business there should be no business transactions for two fiscal years. and nil filings must be done for those 2 yrs, even if Nil filing for the past 2 fiscal years is not done, the company can strike off. A bank closure certificate must be provided if having an account in the bank.
Can a struck-off company still trade?
When a corporation is struck off, the name would be removed from the corporate register and it can't trade, sell its assets or make payments or maybe it can not get entangled in the other business activities.
What are the grounds for striking off the company? In what conditions the Company’s name can't be struck off?
The company will be struck off under the subsequent circumstances:
(a) When a corporation did not commence its business within one year of its incorporation.
(b) When an organization isn't actively doing any business or operation for a period of two immediately preceding financial years and has not made any application within such a period for obtaining the status of a Dormant Company.
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