How to close a company as per the provisions of Companies Act, 2013 - Part 1

In this article, the author will tell about the provisions which a company will meet to follow if they want to close off their company.

So, A Company can either be strike off or wind up. The process of striking off is an alternative mechanism to the winding up of a company. 

Further, The Companies Act facilitates two modes of strike-off –  

1. Strike off by the RoC (Registrar of Companies) under Section 248(1) of the Companies Act 2013, 

2. Strike off by a company on its own accord under Section 248(2) of the Companies Act, 2013. 

Today's article discuss the concept of strike off of Company with respect to both of these provisions.

1. Strike off initiated by the RoC :-

On the happening of certain events, the RoC will initiate the process of strike off the name of the company. It simply means that the name of the company will be striked off i.e. removed from the register of companies maintained by the RoC.

The events are specified in Section 248(1) (a) to (e) :-

a). A Company has failed to commence it's business within one year of it's incorporation; or

b). Omitted

c). A company is not carrying on any business or operation for a period of two immediately preceding financial years and has not made any application within such period for obtaining the status of a dormant company under section 455; or

d). The subscribers to the memorandum have not paid the subscription which they had undertaken to pay at the time of incorporation of a company and a declaration to this effect has not been filed within one hundred and eighty days of its incorporation under sub­section (1) of section 10A; or

e). The company is not carrying on any business or operations, as revealed after the physical verification carried out under sub-section (9) of section 12


Then the RoC shall send a notice to the company and all the directors of the company,

The notice will be in the form STK-1.

In this notice the RoC shall provide about his intention to remove the name of the company from the register of companies and shall request them to send their representations along with copies of the relevant documents, if any, within a period of thirty days from the date of the notice.


To be continued in Part 2



This blog is authored by Company Secretary Ronak Gupta. He is author of many blogs and runs many websites and youtube channels. His work is dedicated to corporate laws, legal, secretarial, professional services and also in strategy formulations for corporates. Mail him at: csronakgupta23@gmail.com or call at :9910226715

Comments

  1. VigneshJuly 25, 2022 at 5:22 PM

    The winding up of a company is a procedure that a company may choose to go through when it can no longer continue trading as a going concern. When a company's management decides that they have no option but to close the business down, they will apply to the relevant courts for an order to wind up the company

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