INTRODUCTION TO "C-PACE" FOR VOLUNTARY STRIKING OFF OF CO.
INTRODUCTION:
If an Indian company wishes to voluntarily cease its operations, it can independently apply for the removal or striking off of its name from the Registrar of Companies ("RoC") register. This process is governed by Section 248(1) of the Companies Act, 2013, in conjunction with the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016.
When can a Co. choose to Strike Off it’s name from RoC?
According to Section 248(2) of the Act, a company may choose to strike off its name from the register of companies after settling its liabilities and passing a special resolution.
The Registrar can also strike off a company's name if:
(i) it has failed to commence operations within one year of its incorporation; or
(ii) 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 within such period for obtaining the status of a dormant company.
(iii) where the subscribers to the memorandum have not paid the subscription amount undertaken to pay at the time of incorporation and have not filed a declaration within 180 days of its incorporation; or
(iv) the company is not carrying on any business or operations, as revealed after the physical verification carried out by the Registrar of Companies.
Key Changes Introduced:
On April 17, 2023, the Ministry of Corporate Affairs (MCA) introduced the Companies (Removal of Names of Companies from the Register of Companies) Amendment Rules, 2023, effective from May 1, 2023. Subsequently, the Companies (Second Amendment Rules), 2023, were notified on May 10, 2023, bringing further changes to the Rules 2016.
1. Amendment Rules 2023:
?? - Application for removal must be made to the Registrar, Centre for Processing Accelerated Corporate Exit ("CPACE") in Form No. STK-2 with a fee of ten thousand rupees.
?? - CPACE, established under section 396, is designated as the Registrar of Companies for processing applications in Form No. STK-2, with territorial jurisdiction across India.
?? - Amendments to Form No. STK-2, Form No. STK-6 (Public Notice), and Form No. STK-7 (Notice of Striking off and Dissolution).
For?Form No. STK-2,?the following attachments are required:
领英推荐
(a) The statement of account in Form STK 8 (not earlier than 30 days from the date of making the application)
(b) Indemnity bond in STK-3 (Collectively given by directors) or indemnity bonds by an authorized representative of administrative Ministry/ Department in Form No. STK- 3A (as applicable).
(c) Copy of the order/NOC of the concerned regulatory authority.
(d) Copy of relevant order for delisting, if any, from the concerned Stock Exchange.
(f) Optional attachment, if any.
2. Second Amendment Rules:
?? The Second Amendment Rules introduced new provisions to Rule 4(1) of the Rules, which provides an application for removal of the company's name from the register of companies cannot be filed:
CONCLUSION:
In conclusion, the Amendment Rules 2023 establish C-PACE with nationwide jurisdiction, streamlining the process for companies seeking voluntary striking off. The establishment of the C-PACE will help to reduce the stress on the Registry along with keeping the registry clean besides availability of more meaningful data to the stakeholders. The C-PACE will also benefit the stakeholders by providing hassle-free filing, timely and process-bound striking off their company's names from the register. the Centre has been established as part of several measures taken to further improve the ease of doing business and ease of exit for companies.
Hope this article was able to answer all your questions. If not, you can always contact us.
You can also access Articles | SA & Co. for more such reads. Thanks!
Curated by: Yash Jain