Application for removal of Name of Company


Application for removal of name of the companies from the register of companies maintained by Company registrars has legal roots in Sub – section (2) of Section 248 of the Companies Act, 2013 as discussed earlier here. Rule 4 of the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016 deals with its procedural aspects. We will discuss Rule 4 in this post.

Enabling Provision

According to sub – section (2) of Section 248 of the Companies Act, 2013, a company may file an application in the prescribed manner to the Registrar for removing the name of the company from the register of companies on all or any of the grounds specified in sub-section (1).

As discussed earlier here, Section 248 (1), companies liable or eligible for removal are –

(a) a company has failed to commence its business within one year of its incorporation; or

(b) deleted;

(c) a company 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 under section 455.

Statutory Pre – conditions

According to sub – section (2) of the Companies Act, 2013, the company may make such application only after extinguishing all its liabilities. The company make such application after passing a special resolution or consent of seventy-five per cent members in terms of paid-up share capital.

According to sub – section (3), any company registered under section 8 cannot make such application.

Application for removal

According to sub – rule (1) of Rule 4 of the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016, an application for removal of name of the company shall be made in Form STK-2 along with the fee of five thousand rupees.

Regulatory Approval

According to proviso to sub – section (2) of the Companies Act, 2013 in the case of a company regulated under a special Act, approval of the regulatory body constituted or established under that Act shall also be obtained and enclosed with the application.

Accordingly, sub – rule (2) of the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016, prescribes that every application under sub-rule (1) shall accompany a no objection certificate from appropriate Regulatory Authority concerned in respect of following companies, namely :-

(i) companies which have conducted or conducting non-banking financial and investment activities as referred to in the Reserve Bank of India Act, 1934 (2 of 1934) or rules and regulations thereunder;

(ii) housing finance companies as referred to in the Housing Finance Companies (National Housing Bank) Directions, 2010 issued under the National Housing Bank Act, 1987 (53 of 1987);

(iii) insurance companies as referred to in the Insurance Act, 1938 (4 of 1938) or rules and regulations thereunder;

(iv) companies in the business of capital market intermediaries as referred to in the Securities and Exchange Board of India Act, 1992 (15 of 1992) or rules and regulations thereunder;

(v) companies engaged in collective investment schemes as referred to in the Securities and Exchange Board of India Act, 1992 (15 of 1992) or rules and regulations thereunder;

(vi) asset management companies as referred to in the Securities and Exchange Board of India Act, 1992 (15 of 1992) or rules and regulations thereunder;

(vii) any other company which is regulated under any other law for the time being in force.

Accompanied Documents

According to sub – rule (3) of Rule 4, the application in Form STK 2 shall be accompanied by –

(i) indemnity bond duly notarised by every director in Form STK 3;

(ii) a statement of accounts containing assets and liabilities of the company made up to a day, not more than thirty days before the date of application and certified by a Chartered Accountant;

(iii) An affidavit in Form STK 4 by every director of the company;

(iv) a copy of the special resolution duly certified by each of the directors of the company or consent of seventy five per cent of the members of the company in terms of paid up share capital  as on the date of application;

(v) a statement regarding pending litigations, if any, involving the company.

Manner of filing of application

According to sub – rule (1) of rule 5, the application in Form STK 2 shall be (digitally) signed by a director duly authorised by the Board in their behalf.

According to sub – rule (2) of rule 5, where the director concerned does not have a registered digital signature certificate, a physical copy of the form duly filled in shall be signed manually by the director duly authorised in that behalf and shall be attached with the Form STK 2 while uploading the form.

In second case, form shall not ask digital signature of a director.

Certification

According to rule 6, the Form STK 2 shall be certified by a Chartered Accountant in whole time practice or Company Secretary in whole time Practice or Cost Accountant in whole time practice.

Public Notice

According to sub – section (2) of the Companies Act, 2013, the Registrar shall, on receipt of such application, cause a public notice to be issued in the prescribed manner.

According to sub – rule (1) of rule 7, the notice under sub – section (2) shall be in form STK -2. The notice shall be –

(i) placed on the official website of the Ministry of Corporate Affairs on a separate link established on such website in this regard;

(ii) published in the Official Gazette;

(iii) published in English language in a leading English newspaper and at least once in vernacular language in a leading vernacular language newspaper, both having wide circulation in the State in which the registered office of the company is situated.

According to newly inserted second proviso to rule 7(1), with effect from 12th April 2017, the publication of notice under clause (iii) of this sub-rule, in respect of cases falling under subsection (1) of section 248 shall be in Form STK 5A.

According to first proviso to rule 7(1), in case of any application made under sub-section (2) of section 248 of the Act, the company shall also place the application on its website, if any, till the disposal of the application.

Intimation to regulatory authorities

According to sub – rule (2) of rule 7, the Registrar of Companies shall, simultaneously intimate the concerned regulatory authorities regulating the company, viz, the Income-tax authorities, central excise authorities and service-tax authorities having jurisdiction over the company, about the proposed action of removal or striking off the names of such companies. The registrar of companies shall seek objections, if any, to be furnished within a period of thirty days from the date of issue of the letter of intimation. If no objections are received within thirty days from the respective authority, it shall be presumed that they have no objections to the proposed action of striking off or removal of name.

Effect of company notified as dissolved

According to Section 250, Where a company stands dissolved under section 248, it shall on and from the date mentioned in the notice under sub-section (5) of that section 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.

According to rule 9, the Registrar shall cause a notice under subsection (5) of section 248 of striking off the name of the company from the register of companies and its dissolution to be published in the Official Gazette in Form STK 7 and the same shall also be placed on the official website of the Ministry of Corporate Affairs.

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One response to “Application for removal of Name of Company

  1. Pingback: Appeal or Application for Restoration of Names of Company | AishMGhrana

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