STRIKE OFF OF COMPANY UNDER SECTION 248 OF THE COMPANIES ACT, 2013

Applicable Scenarios for Strike Off

A company can apply for strike-off under the following conditions:

1. Failure to Commence Business:

   • The company has failed to commence its business within one year of incorporation.

2. Inactivity for Two Consecutive Financial Years:

   • The company has not carried on any business for two immediately preceding financial years and has not applied for the status of a dormant company.

3. Non-Payment of Subscription Money:

   • Subscribers to the memorandum have not paid the subscription money within 180 days of incorporation, and no declaration has been filed for commencement of business.

4. Non-Operation Revealed by Physical Verification:

   • The company is not carrying on any business operations as revealed after physical verification by the Registrar of Companies (ROC).

Companies Ineligible for Strike Off

The following companies cannot apply for strike-off:

1. Listed companies.

2. Section 8 companies (Non-profit organizations).

3. Companies with pending charges.

4. Companies with pending compounding cases.

5. Companies with pending prosecutions in court.

6. Vanishing companies.

7. Companies delisted due to non-compliance.

8. Companies under inspection or investigation with orders pending or with prosecution arising from such actions.

9. Companies that have accepted public deposits or defaulted in repayment.

10. Companies against which notices under Section 206 are pending or for which the inspector’s report has been submitted and is awaiting court proceedings.

Restrictions on Application for Strike Off

A company cannot apply for strike-off if, in the preceding three months, it has:

1. Changed its name.

2. Shifted its registered office from one state to another.

3. Engaged in activities other than those necessary for making the strike-off application.

4. Made an application to the Tribunal for a merger or amalgamation that is not yet finalized.

5. Entered into the process of being wound up under the Companies Act, 2013, or the Insolvency and Bankruptcy Code, 2016.

6. Disposed of property or rights held before ceasing trade or business, except for normal course transactions.

Required Documents for Strike-Off Application

1. Statement of Accounts:

   • Prepared on the auditor’s letterhead, not older than 30 days from the date of filing the application.

2. Bank Account Closure Letter:

   • Obtained from the company’s bank.

3. Acknowledgement of Income Tax Return:

   • For the latest financial year.

4. Identity Proofs:

   • Copy of PAN card of the company/LLP.

   • Copy of PAN and Aadhaar card of all directors.

5. Indemnity Bond (Form STK-3):

   • On non-judicial stamp paper.

6. Affidavit (Form STK-4):

   • Signed by all directors.

7. Statement of Account (Form STK-8):

   • Verified and certified.

8. Board Resolution:

   • Approving the application for strike-off.

9. EGM Notice with Explanatory Statement:

   • Calling for an Extraordinary General Meeting (EGM).

10. EGM Resolution:

    • Approving the strike-off application.

This comprehensive guide ensures clarity and compliance for companies considering strike-off under Section 248 of the Companies Act, 2013.

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Article Compiled by:-

~Neel Lakhtariya

(LegalMantra.net Team)