PROCESS OF STRIKE OFF OF COMPANY– BY FILING STK-2 - QUICK BITES
STRIKE OFF OF COMPANY– BY FILING STK-2
This Editorial is updated till 25th August, 2019.
In this editorial auditor
shall discuss the few questions in relating to Strike off of Companies.
I. Whether without completion of Annual Filing
a Company can apply for Strike off in e-form STK-2?
II. Whether a company can apply for suo-moto
Strike off after action initiated by ROC u/s 248(1)?
III. Whether a Company can suo-moto apply for
strike off without filing of Active Form INC 22A?
IV. If ROC suo-moto struck off a Company, then
whether Directors shall be disqualified?
A.
Whether without completion of Annual Filing a Company can
apply for Strike off in e-form STK-2?
Provisions of Suo-moto Strike off of Company has stated
under Section 248 read with Rule 4.
As per Rule 4, Extract
of Law:- “An application for removal of name of the
company under sub-section (2) of section 248 shall be made in Form STK-2 along with the fee of ten thousand rupees. Provided
that no application in Form No. STK-2 shall be filed by a company unless it has
filed overdue returns in Form No. AOC-4 (Financial Statement) or AOC-4 XBRL, as
the case may be, and Form No. MGT-7 (Annual Return), up to the end of the
financial year in which the company ceased to carry its business operations”
Note:- One
can opine that as per rule 4 first proviso, a company can’t file application in
e-form STK-2 for suo-moto strike off of Company, until unless company has completed
filing of annual Form AOC-4 and MGT-7 till the financial year company carry its
business operations.
In other word, there is no
need to file pending annual form for strike off of Company, if company has not
carried any business operation in those years.
B.
Whether a company can apply for suo-moto Strike off after action
initiated by ROC u/s 248(1)?
Provisions of Suo-moto Strike off of Company has stated
under Section 248 read with Rule 4.
As per Rule 4, Extract
of Law:-
“Provided further that in case a company intends to file
Form No. STK-2 after the action under
sub-section (1) of section 248 has been initiated by the Registrar, it
shall file all pending overdue returns in Form No. AOC-4 (Financial Statement)
or AOC-4 XBRL, as the case may be, and Form No. MGT-7 (Annual Return) before
filing Form No. STK-2”
Note:- One
can opine that as per rule 4 second proviso, if company has received notice u/s
248(1) from Roc in such case, company
can’t file application in e-form STK-2 for suo-moto strike off of Company, until
unless company has completed filing of annual Form AOC-4 and MGT-7 till date.
In other word, it is mandatory
to file pending annual form for strike off of Company, if company has received
notice u/s 248(1) from ROC.
C.
Whether a Company can suo-moto apply for strike off without
filing of Active Form INC 22A?
As per Rule 25A of
Companies (Incorporation) Rules, 2014 every company incorporated on or before the 31st December,
2017 shall file the particulars of the company and its registered office,
in e-Form ACTIVE. If Company fails to file Active form then shall
not allow filing following forms.
·
SH-07 (Change in Authorized Capital);
·
PAS-03 (Change in Paid-up
Capital);
·
DIR-12 (Changes in Director
except cessation);
·
INC-22 (Change in Registered
Office);
·
INC-28 (Amalgamation,
de-merger)
Note: - In
the above mentioned rule it is nowhere mentioned that if company fails to file
INC 22A it can’t file STK-2. Therefore, one can opine that a Company even not
file Active form can file e-form STK-2 with ROC for suo-moto strike off.
In other word, it is not mandatory
to file Active form for strike off of Company through e-form STK-2.
D. If ROC suo-moto struck
off a Company, then whether Directors shall be disqualified?
As per provisions of Section
248(1)
Where the Registrar has reasonable cause to believe that— (a) a company
has failed to commence its business within one year of its incorporation
or (c) a company is not carrying on any business or operation for a period of two immediately preceding financial years he
shall send a notice to the company and all the directors of the company, of his
intention to remove the name of the company from the register of companies
As per provisions of
Section 164(2) No person who is or has been a director of a company which—
a) has not
filed financial statements or annual returns for any continuous period of three financial years; or
b) has failed to repay the
deposits accepted by it or pay interest thereon or to redeem any debentures on
the due date or pay interest due thereon or pay any dividend declared and such
failure to pay or redeem continues for one year or more, shall be eligible to
be re-appointed as a director of that company or appointed in other company for
a period of five years from the date on which the said company fails to do
so.
Note: - As
per above mentioned provisions:
·
Power of ROC for strike off arise if
company fails to file Annual Forms for two financial years and
·
Disqualification arise if Company fails to
file financial statement for three financial years
Therefore, one can opine that if ROC issue notice for
strike off after failure of filing of financial statement for 2 financial years
then directors of such company shall not be disqualified.
In other words, until unless
company made default in filing of annual documents for three financial years
directors shall not be disqualified.
(Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES
Company Secretary in Practice from Delhi and can be contacted at csdiveshgoyal@gmail.com)
Disclaimer: The entire
contents of this document have been prepared on the basis of relevant
provisions and as per the information existing at the time of the preparation.
Although care has been taken to ensure the accuracy, completeness and
reliability of the information provided, I assume no responsibility therefore.
Users of this information are expected to refer to the relevant existing
provisions of applicable Laws. The user of the information agrees that the
information is not a professional advice and is subject to change without
notice. I assume no responsibility for the consequences of use of such
information. IN NO EVENT SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT,
SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION
WITH THE USE OF THE INFORMATION. This is only a knowledge sharing initiative
and author does not intend to solicit any business or profession.
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