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Strike Off of Public Limited Company

Process for Striking Off a Public Company

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    Voluntary Strike-Off for Public Companies

    A public company wishing to voluntarily strike off its name from the register must follow a prescribed process:

    1. Board Resolution: The board of directors must pass a special resolution agreeing to the company’s dissolution. The resolution should state that the company has no liabilities, is no longer in operation, and is not required for any business activity.
    2. Declaration by Directors: The directors must provide a declaration that the company has ceased operations and has no outstanding liabilities or obligations. Additionally, the company should have no ongoing legal matters or pending claims against it.
    3. Application in Form STK-2: The company must file an application in Form STK-2 with the Ministry of Corporate Affairs (MCA). This form should be accompanied by the following documents:
      • Special resolution (or board resolution in the case of smaller public companies).
      • A statement of accounts indicating that the company has no liabilities.
      • A declaration by the directors stating that the company has no outstanding liabilities and no legal proceedings.
      • No objection certificates (NOCs) from creditors, if applicable.
      • A copy of the last Income Tax return filed by the company (if applicable).
    4. MCA Review and Public Notice: Once the application is submitted, the MCA will review the documents. If everything is in order, the RoC will publish a notice on its website and in the Official Gazette, informing the public of the intention to strike off the company. The notice will provide an opportunity for creditors or other stakeholders to raise any objections within 30 days.
    5. Objection Period: If no objections are received within 30 days from the date of the notice, the RoC will proceed with striking off the company. If objections are raised, they will be reviewed, and the company may have to resolve them before proceeding with the strike-off.
    6. Final Order: If there are no objections or if any objections raised are resolved, the RoC will issue a strike-off order and remove the company’s name from the register.
    7. Public Notice of Dissolution: Once the company is struck off, the RoC will issue a final public notice in the Official Gazette and on the MCA website, confirming the company’s dissolution.

    Strike-Off by RoC for Non-Compliance

    The RoC can also initiate the strike-off process if a public company fails to comply with statutory requirements such as:

    1. Non-filing of Returns: If a company has failed to file its annual returns or financial statements for two or more years, the RoC can issue a notice to the company regarding its non-compliance.
    2. Notice by RoC: The RoC sends a show-cause notice to the company and its directors, asking why the company should not be struck off. This notice is usually sent after the company has failed to comply with statutory requirements for a prolonged period.
    3. Rectification Period: The company is given a certain period (usually 30 days) to rectify the defaults, such as filing the overdue returns and financial statements.
    4. Strike-Off: If the company does not respond or fails to comply with the notice within the given time frame, the RoC may proceed with striking off the company from the register.

    Conclusion

    The strike-off process for a public company under the Companies Act, 2013 can be initiated either voluntarily by the company or by the Registrar of Companies (RoC) for non-compliance with statutory requirements. The process involves multiple steps such as passing a special resolution, filing documents with the RoC, and publishing public notices. Public companies must ensure compliance with all legal requirements and clear all dues before applying for strike-off. Failure to do so may result in the company being struck off by the RoC for non-compliance, potentially exposing the directors to legal and financial consequences.