{"id":107300,"date":"2022-04-12T14:53:15","date_gmt":"2022-04-12T09:23:15","guid":{"rendered":"https:\/\/legalwindow.in\/?p=107300"},"modified":"2023-01-02T09:54:48","modified_gmt":"2023-01-02T04:24:48","slug":"closure-of-the-companies-under-the-companies-act-2013","status":"publish","type":"post","link":"https:\/\/www.legalwindow.in\/blog\/closure-of-the-companies-under-the-companies-act-2013\/","title":{"rendered":"Closure of the Companies under the Companies Act, 2013"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-107302 size-full\" title=\"Closure of the Companies under the Companies Act 2013\" src=\"https:\/\/legalwindow.in\/wp-content\/uploads\/Closure-of-the-Companies-under-the-Companies-Act-2013.png\" alt=\"Closure of the Companies under the Companies Act 2013\" width=\"1200\" height=\"630\" srcset=\"https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Closure-of-the-Companies-under-the-Companies-Act-2013.png 1200w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Closure-of-the-Companies-under-the-Companies-Act-2013-600x315.png 600w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Closure-of-the-Companies-under-the-Companies-Act-2013-300x158.png 300w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Closure-of-the-Companies-under-the-Companies-Act-2013-1024x538.png 1024w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Closure-of-the-Companies-under-the-Companies-Act-2013-768x403.png 768w\" sizes=\"auto, (max-width: 1200px) 100vw, 1200px\" \/><\/p>\n<p><span style=\"font-weight: 400;\">With the expansion of trade across borders, the method and protocol of company formation have indeed been uniform and streamline. However, with a rising range of rules and ensuring compliance, with fines for late compliance the numerous business owners are finding it really hard to survive. However, they are looking for ways to escape the corporation&#8217;s way of operating. Thus, the government is providing many escaping routes from the company mode, of which one is company closure. Further, in which it requires the accomplishment of certain circumstances and paperwork. However, a company is a legal entity and it must comply with the rules and regulations of Closure of the Companies under the Companies Act, 2013.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The Directors and company\u2019s executives have a variety of operations to close a company as introduced by government authorities. The simplest way to close a company is to file an application with the <a href=\"https:\/\/legalwindow.in\/roc-company-anuual-filing\/\" target=\"_blank\" rel=\"noopener\">ROC<\/a>. In case, if a company is inactive for a certain period of time.<\/span><\/p>\n<table style=\"width: 100%;\">\n<tbody>\n<tr>\n<td style=\"border: 1px solid #555;\"><b>Table of Content<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"#Company\"><span style=\"font-weight: 400;\">Company<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"#Closure\"><span style=\"font-weight: 400;\">Closure of the Companies under the Companies Act, 2013\u00a0<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"#Reasonable\"><span style=\"font-weight: 400;\">Reasonable grounds on which a company can strike off its name by ROC<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"#Procedure\"><span style=\"font-weight: 400;\">Procedure for striking off the Name of the Company<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"#Points\"><span style=\"font-weight: 400;\">Points to Ponder<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"#Endnote\"><span style=\"font-weight: 400;\">Endnote<\/span><\/a><\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2 id=\"Company\"><b>Company<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">A corporation or a company is a voluntary collection of persons formed for the purpose of doing business. A business has its own identity and limited liability; it is a juristic person having a separate legal entity from its members, capable of its own rights and duties, and endowed with a prospective or permanent succession.<\/span><\/p>\n<h2 id=\"Closure\"><b>Closure of the Companies under the Companies Act, 2013\u00a0<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Section 248 to 252 of the <\/span><span style=\"font-weight: 400;\">Companies Act, 2013<\/span> <span style=\"font-weight: 400;\">and The <\/span><span style=\"font-weight: 400;\">Companies (Removal of<\/span> <span style=\"font-weight: 400;\">Names and Companies from the ROC) Rules, 2016<\/span> <span style=\"font-weight: 400;\">govern the measures for Closure of the Companies under the Companies Act, 2013 from the Registrar of Companies.<\/span><\/p>\n<h2 id=\"Reasonable\"><b>Reasonable grounds on which a company can strike off its name by ROC<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">According to section 248(1) of the Companies Act, 2013, the reasonable grounds on which a company can strike off its name by filling an application to <a href=\"https:\/\/legalwindow.in\/roc-company-anuual-filing\/\" target=\"_blank\" rel=\"noopener\">ROC<\/a>. However, the reasonable grounds are:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A Business has failed to start its operations within one year of its formation.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A Company that has not carried out any operation from the previous 2 fiscal years and has not applied for the status of Dormant Company as per the Section 455 of the Companies Act, 2013.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The memorandum of<\/span> <a href=\"https:\/\/legalwindow.in\/shareholders-agreement\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">shareholders<\/span> <\/a><span style=\"font-weight: 400;\">have not paid the fee that they agreed to pay at the time of the company&#8217;s formation. However, if the effect to that statement is not made within the given time period i.e. 180 days from the date of commencement of a company as per the provision of Section 10A (1) of the Companies Act, 2013.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The company is not conducting any operations as brought in light by checking undertaken as per the provision of Section 12(9).<\/span><\/li>\n<\/ul>\n<h2 id=\"Procedure\"><b>Procedure for striking off the Name of the Company<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Call a board of Directors meeting to discuss the following :<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">To consider and approve the filling of the name change application.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">However, to make any application with the ROC for the removal of the director&#8217;s name. Further, to seek the approval of at least 75% of the Company\u2019s members.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">For setting of the essentials like time, date and place to hold a general meeting to pass a special resolution.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">To accept the draft notice of the meeting and the explanatory statement. Further, requisite to give any official the authority to call a general meeting.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">To pass the Special resolution for removal of name from<\/span> <span style=\"font-weight: 400;\">ROC<\/span><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Within the 30 days time period of passing the resolution file the copy of the special resolution as MGT-14.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Application must be filled to ROC in Form STK-2 along with the desired credentials:\u00a0<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Bound duly signed by the directors in Form STK-3.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">All the assets and the liabilities of the company not more than 30 days before the application form. However, which is certified by CA in Form STK-8<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">All the directors are requisite to put forward the affidavit in Form STK-4.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">In case of any pending litigation, a statement is requisite to fill up.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">ROC shall place a receipt on the official website of<\/span> <span style=\"font-weight: 400;\">MCA<\/span> <span style=\"font-weight: 400;\">in Form STK-6. However, it is necessary to publicize it in the English language in a vernacular press. Mainly, at the site of the company&#8217;s office.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">At the same time, the ROC has proposed measures to close the company. However, to require the relevant rules that regulate the company, i.e. income tax, <a href=\"https:\/\/legalwindow.in\/gst-registration\/\" target=\"_blank\" rel=\"noopener\">GST<\/a> etc., to file an objection within 30 days of insurance.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">In case, no objection is received then it is presumed that you are proposing the dissolution of the company.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">After the completion of the procedure, ROC will cancel the name and dissolve the company by sending a notice to the Official Gazette using Form STK-7.<\/span><\/li>\n<\/ul>\n<h2 id=\"Points\"><b>Points to Ponder<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">The following are the important points to keep in mind before filing of the application:<\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">To close the company, the company must pay all the debts.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A company&#8217;s omission request may not be put forward by a company which has not set forth an overdue statement. However, in AOC4\\ AOC4X BRL &amp; Form <a href=\"https:\/\/www.mca.gov.in\/MinistryV2\/companyformsdownload.html\" target=\"_blank\" rel=\"noopener\">MGT7<\/a> by the end of the fiscal year in which the company came to an end.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">If you change your company&#8217;s name\\ registration office from one state to another at any point in the last 3 months. So, you will not be able to request the removal of your company.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Immediately before a Cesar transaction or other business sells the value of any property or right owned by Cesar for the purpose of disposing of it for profit in the course of its normal or other business.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Engaged in activities other than those necessary or appropriate to determine or determine whether the requirements under this section apply, to complete the business of the company, or to comply with legal requirements.<\/span><\/li>\n<\/ul>\n<h2><a href=\"https:\/\/legalwindow.in\/contact\/\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-111721 size-full\" title=\" Strike off a company starting from \u20b9 18,000\/-\" src=\"https:\/\/legalwindow.in\/wp-content\/uploads\/strike-off-a-company-starting-from-18000.png\" alt=\"\" width=\"1000\" height=\"200\" srcset=\"https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/strike-off-a-company-starting-from-18000.png 1000w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/strike-off-a-company-starting-from-18000-600x120.png 600w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/strike-off-a-company-starting-from-18000-300x60.png 300w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/strike-off-a-company-starting-from-18000-768x154.png 768w\" sizes=\"auto, (max-width: 1000px) 100vw, 1000px\" \/><\/a><\/h2>\n<h2 id=\"Endnote\"><b>Endnote<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">If the <\/span><span style=\"font-weight: 400;\">company<\/span><span style=\"font-weight: 400;\"> wants to strike off the name and close the company. The company needs to strictly comply with all the rules and regulations applicable to it. <\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">However, before doing so the company must keep in mind the pros and cons of the action. Further, if the company desires to do so then the company can go with the above mentioned procedure.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Furthermore, Legal Window will help in <\/span><span style=\"font-weight: 400;\">Closure of the Companies<\/span><span style=\"font-weight: 400;\"> under the Companies Act, 2013. So, feel free to connect to our <\/span><span style=\"font-weight: 400;\">experts<\/span><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>With the expansion of trade across borders, the method and protocol of company formation have indeed been uniform and streamline. However, with a rising range of rules and&hellip;<\/p>\n","protected":false},"author":3,"featured_media":107301,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[],"class_list":["post-107300","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-change-in-business"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Closure of the Companies under the Companies Act 2013 &#187; Legal Window<\/title>\n<meta name=\"description\" content=\"Step by Step Guide on Closure of the Companies under the Companies Act 2013. 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