COMPANY STRIKE OFF
There are different instances due to which the Company can be wound up. Strike Off is the procedure through which the assets of the Company are sold and liabilities are paid. However, the Strike off procedure is not that much lengthy and stringent still it may take time more than a year for approval.
Hence, the Central Government has notified the Fast Track Exit (FTE) Scheme 2017 for easy and fast way for closure of the Companies without passing through the stringent Strike Off process.
FTE is very simple and cost saving method of Strike Off of the Company without going for lengthy liquidation process and without High court intervention. Under these sections, the power has been given to Registrar of Companies to strike off the name of the Company from the Register of Companies on suo-motto basis but a Company can also file the application in the prescribed form to the ROC for removing the name of the Company after extinguishing all its liabilities and after complying with some conditions.
The Registrar of Companies may remove the name of a company from the register of companies when;
- A company has failed to commence its business within one year of its incorporation, or
- 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 of the Companies Act, 2013.
Reasons to Strike Off of a Company
1. No Compliance Burden: Once the company is closed, there does not exist the company as such hence the promoters or directors get free from compliance responsibilities and possible dangers of non-compliances.
2. Faster route of Closure: Inactive or non-functioning company can be closed swiftly in about 3 to 16 days, whereas traditional methods take longer and are more cumbersome procedures.
3. Avoid Fines: If the inactive or non-functioning company is not following legal compliances, it may incur hefty fines and penalties and punishments for the officers of the Company in certain cases including debarment of the Directors from starting another Company. Hence, it is better to officially wind up a company that is inactive and avoid potential fines or liabilities in the future.
How we help with Strike Off of a company
1. Company Review: We will review the activities of the Company and determines if it is eligible for Strike Off under the FTE Scheme under the Companies Act, 2013 thereby following easier procedure. The review process would be completed in 2 - 3 working days.
2. Document Preparation: Then we will provide timelines; documents for Strike Off of the company it will take 5 - 7 working days depending on the Company.
3. strike off Application: Application for closure of Company will be made to the ROC who will usually approve the application for Strike Off and closing of the company in about 3 months.