Company Strike-Off

Introduction

In the business world, companies may stop operating for different reasons. One legal way to officially end a company’s existence is through a process called “strike off.” This article explores what a strike off company means, the steps involved in the process, and the impact it has on business owners and stakeholders

What is Strike Off of a Company?

Company strike-off is a legal procedure where the Registrar of Companies (RoC) removes a company’s name from the official register, effectively dissolving it as a legal entity. Once struck off, the company ceases to exist, and all its legal obligations and liabilities are terminated

Strike Off Under the Companies Act, 2013

The Companies Act, 2013 provides a clear and efficient framework for striking off companies through Sections 248 to 252 and the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016. This process can be initiated either by the Registrar of Companies or voluntarily by the company itself, offering a quicker alternative to formal winding-up for defunct or inactive companies.

Methods of Striking Off a Company

By Registrar of Companies (RoC): The RoC or the Centre for Processing Accelerated Corporate Exit (C-PACE) may initiate strike off suo-moto under specific conditions.
Voluntary Application by the Company: Companies can also apply voluntarily to the RoC or C-PACE to have their names removed from the register.

What is C-PACE?

On April 17, 2023, the Ministry of Corporate Affairs (MCA) established the Centre for Processing Accelerated Corporate Exit (C-PACE), amending existing rules to centralize the strike-off process.

Key features of C-PACE include:

Jurisdiction: C-PACE holds nationwide authority to process all company strike-off applications.
Function: It handles and disposes of strike-off requests filed via E-form STK-2 under Section 248 of the Companies Act, 2013.
Sole Authority: C-PACE acts as the exclusive body managing the entire strike-off procedure, ensuring a streamlined, efficient, and uniform approach to dissolving non-operational companies

Voluntary Strike Off of a Company

A company can apply to the Registrar at the Centre for Processing Accelerated Corporate Exit (C-PACE) to have its name removed from the Register of Companies, provided it has cleared all its liabilities. To initiate this, the company must pass a special resolution or obtain consent from at least 75% of its members (by paid-up share capital). The grounds for strike off can include non-operation, non-compliance, or other valid reasons.

Procedure for Voluntary Strike Off

Recent amendments under the Companies Act, 2013 have introduced specific requirements for the strike-off process:

Filing of Overdue Documents: The company must have filed all overdue financial statements (under Section 137) and annual returns (under Section 92) up to the financial year in which it ceased operations.
Pending Proceedings: If the Registrar has already started strike-off proceedings, the company must first file any pending financial statements and annual returns before applying for strike off.

The strike-off process involves these key steps:

Step 1: Board Resolution
The Board of Directors must pass a resolution approving the strike-off application.

Step 2: Clearance of Liabilities
The company must settle all outstanding debts and liabilities. If no liabilities exist, a declaration confirming this must be submitted.

Step 3: Extraordinary General Meeting (EGM)
An EGM is held to pass a special resolution with at least 75% shareholder approval by paid-up capital.

Step 4: Filing of Form MGT-14
Within 30 days of passing the special resolution, the company must file E-form MGT-14 with the RoC, attaching a copy of the resolution.

Step 5: Filing of E-form STK-2
This is the formal application to strike off the company’s name, submitted to the Registrar along with supporting documents. The filing fee is ₹10,000.

Step 6: Public Notice and Objection Period
The RoC publishes a notice in the Official Gazette and two newspapers, inviting public objections within 30 days (Form STK-5A). If no objections arise, the process proceeds.

Step 7: Final Strike-Off Notification
If satisfied, the RoC issues the final strike-off order (Form STK-7), published in the Official Gazette and on the MCA website. The company is then officially dissolved from that date.

Documents Required for Voluntary Strike Off

The following must be attached with E-form STK-2:

Indemnity Bond (STK-3): Notarised and signed collectively by all directors.
Affidavit (STK-4): Notarised and individually signed by each director.
Statement of Accounts (STK-8): Certified by a Chartered Accountant and not older than 30 days.
No Objection Certificate (NOC): If applicable, from any relevant authority or third party.
Copy of Board Resolution: Approving the strike-off decision.
Copy of Special Resolution: Passed by shareholders at the EGM.
Other Documents: Any additional documents as required depending on the company’s situation.

Restrictions on Voluntary Strike Off Application

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

Disposed of rights or property for gain immediately before ceasing business.
Shifted its registered office across states or changed its name.
Filed a pending application with the National Company Law Tribunal (NCLT) for arrangement or compromise.
Continued business activities beyond those necessary to wind up affairs or comply with regulations.
Already been under winding-up proceedings, either voluntary or by Tribunal order

Strike Off Company by Registrar of Companies (RoC)

Striking off a company by the Registrar of Companies (RoC) is the official process of removing a company’s name from the Register of Companies. This action legally dissolves the company, ending its existence. Typically, this happens when the company is inactive, non-compliant, or defunct.

Conditions for Strike Off by RoC (C-PACE)

The RoC may strike off a company under the following conditions:

The company has not commenced business within one year of incorporation.
The company has been inactive for the last two financial years and has not applied for dormant status.
The subscribers to the memorandum have not paid their subscribed shares, and no declaration has been filed within 180 days.
Physical verification reveals the company is not conducting any business or operations.

If any condition is met, the RoC issues a notice via E-form STK-1 asking the company to submit a response and documents within 30 days. If the company fails to respond, the RoC publishes a public notice (E-form STK-5) inviting objections. If no objections arise, the RoC proceeds to strike off the company by issuing a notification in the Official Gazette (E-form STK-7).

Companies That Cannot Be Struck Off Suo Moto by RoC

The following companies are exempt from removal by RoC on its own initiative:

Listed companies or those recently delisted.
Vanishing companies.
Companies under inspection or investigation with pending actions or prosecutions.
Companies with notices under Sections 206 or 207 of the Companies Act pending response.
Companies facing ongoing prosecution.
Companies with pending compounding applications.
Companies with outstanding public deposits or defaults.
Companies with unresolved charges.
Section 8 companies (non-profit organizations).

Note: If the RoC issues a suo moto strike-off notice and the company does not respond, it will be barred from later filing a voluntary strike-off application.

Procedure for Strike Off by RoC

Notice from RoC (E-form STK-1):
RoC sends a formal notice to the company informing about the proposed strike off, allowing 30 days for response.
Public Notice (E-form STK-5):
If the company doesn’t respond or the explanation is unsatisfactory, the RoC publishes a public notice inviting objections. This is displayed on the MCA website, Official Gazette, and two newspapers.
Objections and Review:
RoC reviews any public objections. If objections are found valid, the strike off may be halted. If no objections are received within 30 days, the process moves forward.
Strike-Off Confirmation (E-form STK-7):
RoC issues a final notification in the Official Gazette confirming the company’s removal from the register. The company is officially dissolved from this date.

Effect of Strike Off on the Company

After strike off, the company ceases to exist legally and cannot conduct any business. Its name is removed from official records. However:

The company’s liabilities and obligations continue to exist.
The company’s assets remain available to settle outstanding debts.
Directors, officers, and members remain personally liable for any unresolved obligations as if the company had not been struck off

Restoration of a Company After Strike-Off

A company removed from the Register of Companies can be restored if any aggrieved party challenges the Registrar of Companies’ (RoC) dissolution order under Section 248 of the Companies Act. An appeal must be filed with the Tribunal within three years from the date of the strike-off order.

If the Tribunal finds that the company was wrongly struck off without valid grounds, it may order the company’s name to be restored to the Register of Companies. During the process, the Tribunal allows the RoC, the company, and any interested parties to present their cases.

After the Tribunal issues the restoration order, the company must submit a copy to the RoC within 30 days. The RoC will then restore the company’s name in the register and issue a new Certificate of Incorporation.

Furthermore, if the RoC discovers that the strike-off was based on incorrect or inadvertent information, it can itself apply to the Tribunal for the company’s restoration within three years from the dissolution date

About the Author

Rohan

Rohan is a skilled writer who excels at simplifying complex legal concepts into clear, practical guidance. Her articles equip entrepreneurs with the essential knowledge to confidently navigate business laws, helping them successfully start and run their ventures

May 31, 2025