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STK-8 Company Strike Off Procedure 2019


Company Strike Off Procedure 2019

The Ministry of Corporate Affairs (MCA) on Wednesday, the 8th of May, 2019 issued the Companies (Removal of Names of Companies from the Register of Companies) Amendment Rules, 2019. The rules would come into effect from Friday, the 10th of May, 2019. In this article, we look at the major aspects of the new rules issued.

Relevant Forms

The following are the Forms mentioned in the notification issued by the Ministry of Corporate Affairs.

Form STK-2

Form STK-2 is required for the winding up of a company and to voluntarily remove its name from the Register of Companies.

Form AOC-4

Form AOC-4 is required to file the financial statements of a company for each financial year with the Registrar of Companies (RoC).

Form MGT-7

Form MGT-7 is an electronic form by the MCA to all corporates to fill their annual return details. This form is maintained by the Registrar of Companies (RoC) digitally, based on the accuracy of the statement provided by the company. Every registered company, regardless of being public or private, must file Form MGT-7 every year for its annual return.

Form STK-8

Form STK-8 contains the assets and liabilities of a company made until 30 days before the submission of the Form STK-2. This form has to be certified by a Chartered Accountant and has to be submitted with Form STK-2 to the Registrar of Companies (RoC). The Form has been attached to the official notification issued by the MCA.

Increase in Stike-off Application Fee

The first amendment talks about the increase of the fee required to be submitted Form STK-2 for the removal of the name of a company under sub-section (2) of Section 248. Earlier, the fee required to be submitted along with Form STK-2 was INR 5,000.

As per the current MCA rules with effect from 10th May 2019, the fees have been increased to INR 10,000.

Filing of Annual Return – Voluntary Strike-off

Under the new rules, a company cannot file Form STK-2 unless it has filed all overdue returns in Form AOC-4 and Form MGT-7. It should be noted that all these Forms are required to be filed up to the end of the financial year in which the company has decided to cease all its business operations.

Filing of Annual Return – Involuntary Strike-off

In case the Registar of Companies initiates a strike off under sub-section (1) of Section 248, the company would not be allowed to file Form STK-2. Under such circumstances, the Director maybe disqualified for a period of 5 years. Sub-section (1) of Section 248 is reproduced below for ready reference:

  1. Where the Registrar has reasonable cause to believe that—
    1. a. company has failed to commence its business within one year of its incorporation;
    2. b. the subscribers to the memorandum have not paid the subscription which they had undertaken to pay within a period of one hundred and eighty days from the date of incorporation of a company and a declaration under sub-section (1) of section 11 to this effect has not been filed within one hundred and eighty days of its incorporation; or
    3. c. 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,

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 and requesting 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.

Fulfilment of Compliance

In the stike-off process, the concerned person will be required to make a statement that all pending compliance for the company has been filed after initiating procedure under sub-section (1) of Section 248.

Form STK-8 – Statement of Accounts

The MCA has unveiled a new form called Form STK-8 or Statement of Account which must be filed during the strike-off process. the copy of the form and the notification is reproduced below for reference:

2019 Strike Off Notification