Strike off Notice - Section 248(1) of Companies Act

In case the company has failed to commence its business within one year or company is not carrying on any business operations for the period of 2 years, then in such case, under the provisions of section 248 (1) of the Companies Act, ROC can issue the notice, to the company, to remove the name of the company from the register of companies. The notice so issued by ROC is commonly known as a strike off notice. In this article, we look at strike off notice under Section 248(1) in detail. Other related articles:

• Condonation of Delay Scheme
• Director Disqualifiation

Section 248(1)

As per powers given to ROC through provisions of section 248 (1) of the Companies Act, the ROC can suo moto issue notice intending to strike off the company (i.e. to remove the name of the company from the register of companies) under the following circumstances:

• In case when company has failed to commence its business operations within a period of one year from the date of its incorporation; or
• In case when company has not been carrying on the business operations for a period of two years and has not made application for obtaining status of a dormant company within such period.

Generally, the basis behind the intention of issuance of strike-off notice by ROC is non-filing of financial statements and annual returns for the preceding two financial years.

Replying to Strike off Notice

On receipt of the strike off notice, the respective company is required to submit a suitable reply within a period of 30 days from the date of receipt of the notice. Also, the following steps can be followed by the company, based on intent:

Continue Operations

When the company wants to continue its operations, in such case, on receipt of the notice, the company needs to file of all the pending statements and annual returns along with payment of all the penalty an additional fees. After filing all the pending returns and statements as required under the law, the company is required to file an appropriate reply to the notice received within a period of one month from the receipt of the notice. On receipt of the reply, the registrar may, on being satisfied, conclude not to remove the name of the company from the register of the companies and conclude the proceedings accordingly.

Discontinue Operations

When the company does not want to continue its operations, even then, the company is required to first file all the pending statements and annual returns as required under the law along with all the penalty and additional fees. If the company doesn’t want to continue and after filing all the pending statements and returns, the company can file an application in form STK-2 for strike off the company’s name. After filing of form STK-2, the company needs to reply to the notice received by informing the ROC that all the pending annual filing has been complied with and since the company doesn’t want to continue hence an application in form STK-2 has been filed. On receipt of the application in form STK-2 and on receipt of the reply, the registrar would remove the name of the company from the register of the companies.

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Updated on: July 30th, 2019