In this article, we will explain everything you need to know about striking off company in India. We will cover the process, the documents required, and some important points to keep in mind.
If you are a business owner in India, you may have heard the term strike off company. It is a process that involves removing a company’s name from the Registrar of Companies (ROC) list. In other words, the company is no longer legally registered and cannot conduct any business activities.
Why would a company want to be struck off? There could be several reasons, such as the company is no longer operational, the directors or shareholders wish to dissolve the company, or the company was registered by mistake. Whatever the reason, it is important to follow the proper procedure for striking off company in India.
In this article, we will explain everything you need to know about striking off company in India. We will cover the process, the documents required, and some important points to keep in mind.
A Strike Off Company is a business that has been removed from the official register of companies by the government due to it being inactive or not meeting certain legal requirements. This means that the Strike Off Company is no longer in operation and cannot carry out business activities. The process of removing a company from the register is known as “striking off” or “deregistration.”
The Most Frequently Asked Questions on Strike Off Company:
Q1: What is a Strike Off Company? A: A Strike Off Company is a legal procedure for the discontinuation of a company’s existence. It involves removing the company from the official register of companies maintained by the relevant government authority, effectively closing down the company.
Q2: Why would a company opt for Strike Off? A: A company may opt for Strike Off if it is no longer in business, if it has been inactive for a prolonged period, or if the owners wish to formally close the company and dissolve it.
Q3: Who can initiate the Strike Off process? A: The Strike Off process can be initiated by the company itself, or by the relevant government authority if the company has not been in compliance with the applicable laws and regulations.
Q4: What are the steps involved in Strike Off process? A: The steps involved in the Strike Off process may vary depending on the jurisdiction, but generally include: Filing an application for Strike Off with the relevant government authority
Publishing a notice in a local newspaper
Waiting for a specified period to allow for objections
Finalizing the Strike Off if no objections are raised
Dissolving the company and distributing any remaining assets.
Q5: What are the consequences of a Strike Off? A: The consequences of a Strike Off include the discontinuation of the company’s legal status, loss of limited liability protection, and potential legal liabilities for the company’s directors and shareholders. The company’s assets may also be used to pay off outstanding debts.
Struck-Off Companies means removing the name of the Company from the Register of Companies maintained by the Registrar of Companies. It is more like a Closure of the Company and cannot perform any operation thereafter. It ceases to exist as a legal entity and it cannot trade, sell its assets or make payments or even it cannot get involved in any other business activities.
Disclosure requirements of Relationship with Struck off Companies in Schedule III as per the Companies Act
On March 24, 2021, the Ministry of Corporate Affairs (MCA) has introduced elaborative financial statement disclosure requirements effective from April 1, 2021, i.e., for financial statements prepared for FY 2021-22. One such requirement is a disclosure of transactions with companies struck off by the Registrar of Companies (‘RoC’) under section 248 of the Act or under section 560 of the Companies Act, 1956.
The following particulars are to be disclosed in such case:
Name of struck-off Company
Nature of transactions with struck-off Company
Balance outstanding
Relationship with the Struck off company, if any, to be disclosed
Investments in securities
Receivables
Payables
Shares held by stuck off company
Other outstanding balances (to be specified)
Now what needs to be taken care of to comply requirements of the Relationship with Struck off Companies
It is important for each corporate with a vendor/supplier group to update and monitor the “Struck off company status” of vendors/suppliers before every new financial year to protect future business interests.
The question is how to get the status of “Struck off company”?
How MICROVISTA Can Help you
Microvista Technologies can help you identify the list of such organizations. You are required to share the vendors’ GSTIN/PAN and name. Microvista Technologies will take care of the rest. We will identify the struck-off companies, and check their status on the MCA website via CIN No. and collate the required supporting documentation.
