Amendments to Company Strike Off Process

In its latest notification dated 8th May 2019, Ministry of Corporate Affairs (MCA) has introduced Companies Amendments Rules, 2019. The amendments are focused on the new Company strike-off framework. Contact Registrationwala to quell any confusion that you might have in this regard.

In its latest notification dated 8th May 2019, Ministry of Corporate Affairs, MCA, has introduced Companies Amendments Rules, 2019. The amendments are focused on news Company strike-off framework. As per the notifications, the amendments mentioned in the notifications are to put to action from 10th May 2019.

Highlights of Companies Amendments 2019 for Company Strike Off

Companies Amendments 2019: Changes made to Removal of Companies Name from the Registry

1. The government fees of Companies Name removal from MCA registry increased: The governmental fees to file form STK-2 (form to request removal for Company’s name from the MCA Registry) has been increased from INR 5,000 to INR 10,000.
2. Application for Company Strike-off cannot be filed before filing the Annual financial statements: Those who want to strike-off their company’s name using form STK-2 won’t be eligible to do that until they have filed their overdue returns in Form No: AOC-4 (Financial Statement) and MGT-7 (Annual Return).
3. Statement of Account has to be filled using Form No: STK-8: Statement of Accounts has to be filled in eForm STK-8. This additional form must be filed during the strike-off process.

These are the rules in the Companies Amendment 2019. By increasing the fees of company closure, and introducing STK-8 to file a statement of Accounts, it has changed the framework for Company Closure in India.

Rules for filing Annual return for Voluntary-Strike Off and Involuntary Strike-off

1. Rules for Voluntary Strike-Off: Under the new rules established Companies Amendments 2019, a company won’t be able to close the company using STK-2 before filing the overdue returns in AOC-4 and MGT-7 eForm. 
2. Rules of Voluntary Strike-Off: Under the new rules established in Companies Amendments 2019, if the strike-off is involuntary, the company director won’t be eligible to file STK-2. Involuntary Strike-off can only be initiated by the Registrar of Companies under the following circumstances:
   • The company hasn’t filed the commencement of business compliance INC-20 A. It is compliance that an incorporated company has to file within 180 days of incorporation. It establishes that all the subscribers of the company’s shares have paid the value of their shares.

The Registrar can only initiate strike-off of the company after sending the company closing notification to the company directors. Within 30 days of receiving the notifications, the directors have to send their representatives to the MCA with relevant documents.

Bottom line is, under the Companies Amendments 2019, the MCA has made it mandatory for directors who want to close their companies to complete all the compliances beforehand.

For further details about the amendments or to Strike-Off your company with ease, contact our experts of Registrationwala.