Closure of Company

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Close A Company

Removal of names of companies from the Registrar of Companies

MCA has notified sections 248-252 w.e.f 26.12.2016 and also issued new rules for striking off names of companies referred as Companies (Removal of Names of Companies from the Registrar Of Companies) Rules, 2016 w.e.f 27.12.2016.

Striking off name of the company:

  1. ROC can suo-motto issue notices to companies for strike off –reason [Section 248(1) and Rule 3]
  2. Companies can also file application for striking off [Section 248(2) and Rule 4]

Grounds for Strike off of Company, if Company:

  1. Has failed to commence its business within one year of its incorporation or;
  2. 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.

Exceptions [Rule 3(1) & Section 249]:

Following companies can not apply:

  1. listed companies;
  2. delisted companies;
  3. vanishing companies;*
  4. Companies where investigation, inspection and prosecution is pending or carried out;
  5. companies to whom notices are issued under section 206 or 207 or 208.
  6. companies whose application for compounding is pending
  7. companies having public deposits either outstanding or in default
  8. companies having charges pending for satisfaction;
  9. Section 8 or 25 companies.
  10. Companies which has made application for strike off at any time and has not applied for following in the previous three months-[Section 249]
    1. Change of name or shifting of registered office from one State to another;
    2. Disposal for value of property or rights held by it, immediately before cesser of trade or otherwise carrying on of business, for the purpose of disposal for gain in the normal course of trading or otherwise carrying on of business
    3. has engaged in any other activity except the one which is necessary or expedient for the purpose of making an application under that section, or deciding whether to do so or concluding the affairs of the company, or complying with any statutory requirement
    4. Application in process for compromise or arrangement to the Tribunal
    5. in the process of winding up

* “Vanishing company” means

  • Companies registered under law or listed companies and
  • failed to file returns with ROC and Stock Exchange for a consecutive period of two years, and
  • not maintaining its registered office at the address notified with ROC and Stock Exchange and
  • all directors are not traceable.


  • ROC can Issue notice suo-motto to companies and its directors for their representations within a period of thirty days from the date of notice.

Application is made by company in Form STK-2 to ROC.

  • ROC issues public notice in Form STK-5/Form STK-6 and publish it in Official Gazette, English/vernacular language newspaper of the state where registered office of the company is situated and on MCA‘s website. Companies to place the same on website of the company till the disposal of the application.
  • ROC seeks objections from regulatory authorities within 30 days of letter of intimation. If no objection is received, it is presumed that there is no objection for the proposed strike off.
  • After the expiry of time mentioned in notice, ROC issue notice about the dissolution in the official gazette and placed on official website of the MCA.[Form STK-7]

Documents required for application for removal of company [Rule 4(3)]:

  • NOC from appropriate Regulatory Authority concerned
  • Indemnity bond *duly notarised (ROC may ask) by every director in form STK-3
  • Statement of Accounts certified by Chartered Accountant
  • Affidavit by Director in Form STK-4 by every director
  • Copy of Special resolution
  • Statement regarding pending litigations, if any.
  • Fees of Rs. 10,000/-
  • e-Form STK-2 shall be digitally signed by the Director and Certified by CA/CS/CWA in practice. [Rule 5 & 6]
  • In case of Foreign nationals or non-resident Indians, indemnity bond and declaration needs to be notarised, appostilised or consularised. [Rule 8]

Application or Forms pending for Strike off under Companies Act, 1956 [Rule 10 ]

Any application or proceeding pending for striking off or Form-FTE filed not disposed of by such authority for want of any information or document shall, on its submission, to the satisfaction of the authority, be disposed of in accordance with the rules made under the Companies Act, 1956.

Effects of a company notified as dissolved (Section 250).

This section implies that where a company is dissolved under section 248, it shall cease to operate as a Company and the Certificate of Incorporation (COI) shall be deemed to have been cancelled from such date except for the purpose of realizing the amount due to the company and for the payment or discharge of the liabilities of the company.

Penalties for Fraudulent Application for removal of name. (Section 251)

The person in charge of the management of the company shall-

  • Be jointly and severally liable to any person or persons who had incurred loss or damage or result of the company being notified as dissolved; and
  • Be punishable for fraud as provided in section 447. The registrar may also recommend prosecution against the persons responsible for the filing of such applications.

Appeal to Tribunal (Section 252)

Restoration of Name:

Parties can apply for Restoration of Name by making an application to the Tribunal within the following time frame:

A company can be closed by adopting the following ways:-

(A) Strike off a company under Section 560 :

Section 560, of the Companies Act, 1956, deals with strike off provisions of a defunct company. Any defunct company desirous to strike off its name from the register of Registrar of company can apply in Form FTE for strike off its name from the register maintained by ROC as per Guidelines for ‘FAST TRACK EXIT MODE’ issued vide General Circular No. 36/2011 dated 7.6.2011. Similarly, ROC has also power to strike off any defunct company after satisfying himself of the need to strike off a defunct company and has reasonable cause. But before passing any order in this regard, an opportunity of being heard must be provided to the defunct company by following the due procedure u/s 560.

(B) Winding up

Section 425, of Companies Act, 1956, deals with modes of winding up. The winding up of a company may be either -

  1. By the Tribunal (also known as compulsory winding up.
  2. Voluntary winding up
  3. subject to the supervision of the Court

Voluntary Winding up : You can get a general picture from the following steps of winding up which are summarized below (except Voluntary winding up)

  1. Issuing a written demand for debt payments to the target company.
  2. Present a winding up petition to the court and the company
  3. Court hearing for the petition
  4. Granting of winding up order by the court
  5. Meeting of creditors and other relevant parties
  6. Appointment of liquidator.
  7. Realization and distribution of company’s assets to the creditors
  8. Realize of duties for liquidator
  9. Dissolution of the company.

For more details please visit Company Liquidators website ( Overview of Winding up :

Voluntary winding up which may be:

  1. Member’s Voluntary winding up.
  2. Creditor’s Voluntary winding up.

In case of voluntary winding up, the entire process is done without court supervision. When the winding up is complete, relevant documents are filed before the court for obtaining the order of dissolution. A Voluntary winding up can be done by members or creditors. The circumstances in which company may be wound up voluntarily are:

  1. When the period fixed for the duration of the company in its articles has expired
  2. When an event on the happening of which the company is to be dissolved as per its articles happen.
  3. The company resolves by special resolution at any general meeting to be voluntary winding up.