Wednesday 5 April 2017

WINDING UP OF COMPANY - By Registrar or Voluntarily by Company

As per Section 248 to 252 of the Companies Act, 2013, the Registrar of Companies has the powers to remove name of company from the register of companies, if the Registrar has reasonable cause to believe that:
a)  The company is not carrying on any business or operation for a period of two immediately preceding financial years and has not made any application for obtaining the status of a dormant company under section 455.
b)    The company has failed to commence its business within one year of its incorporation;

The Registrar of Companies may send a notice to the company and all the directors of the company and requests them to send representations along with copies of the relevant documents, if any, within a period of thirty days from the date of the notice.

The company may also remove its name from register of companies by filing Form STK-2 which was announced by MCA for removing name from register of companies or winding up of a company. Form STK-2 will be made available by the MCA from the 5th of April, 2017 for filing on the MCA platform.
a)     Requirements before filing STK-2
Before filing the Form STK-2 the company should fulfill all the following requirements:
1.     The company should have pay off all its liabilities
2.     A special resolution shall be passed with the consent of 75% of members in terms of paid-up share capital for removal of company name from register of companies.
3.  In case the company is regulated under a special Act, approval of the regulatory body constituted or established under that Act should also be obtained and enclosed with the application.
b)     Requirements for Filing Form STK-2
The following are the enclosures that must be attached with Form STK-2:
1.     Indemnity bond duly notarized by every director in Form STK 3;
2.    A statement of accounts comprising assets and liabilities of the company made up to a day, not exceeding thirty days before the date of application and certified by a Chartered Accountant;
3.     An affidavit in Form STK 4 by every director of the company;
4.     A copy of the special resolution accordingly certified by each of the directors of the company or approval of 75% of the members of the company in terms of paid up share capital as on the date of application
5.     A statement with reference to pending litigations, if any, involving the company.
6.     Declaration by Director or Managing Director
7.   Digitally certified by a Chartered Accountant in full-time practice or Company Secretary in full-time Practice or Cost Accountant in full-time practice.

c)      Form STK-2 cannot filed, in the following cases:
1.    The company changed its name or shifted its registered office from one State to another before three months of filing of Form STK-2;
2.  The company disposed property or rights held by it, before three months of filing of Form STK-2. This provision is not applicable for trade wherein disposal of property for gain is in the normal course of trading or carrying on of business;
3.    The company engaged in any other activity except the one which is provided in the MOA or expedient before three months of filing of Form STK-2.
4.     The company has made an application to the Tribunal for the sanctioning of a compromise or arrangement and the matter has not been finally concluded;
5.  The company is being wound up under Companies Act or under the Insolvency and  Bankruptcy Code, 2016.

d)     Effect of Removing Name from Register of Companies
1.    If STK-2 is filed and accepted by the ROC, the company would be dissolved under section 248 of the Companies Act, 2013. Further, the business would cease to operate as a company and the Certificate of Incorporation issued to it shall be deemed to have been cancelled from such date – except for the purpose of realising the amount due to the company and for the payment or discharge of the liabilities or obligations of the company.
2.     Also, if a company is closed using Form STK-2, the liability of all director, manager or other officer who was exercising any power of management, and of every member of the company would continue and can be enforced as if the company had not been dissolved.