Introduction

Removing a company name from the Ministry of Corporate Affairs (MCA) database involves a legal process known as "striking off." This procedure is defined under the Companies Act, 2013, and allows a company to cease its existence in the eyes of the law. This article provides a comprehensive guide on how to remove a company name from the MCA database, including the procedures, documents required, and legal implications involved.

Legal Framework

The relevant provisions for striking off a company name are located in Sections 248 to 252 of the Companies Act, 2013. The MCA provides two main ways to strike off a company name: by the company itself or by the Registrar of Companies (ROC).

1. Voluntary Removal by the Company: A company can voluntarily apply for its name to be struck off if it has not commenced business within a year of incorporation or if it is not carrying on any business for two consecutive financial years.

2. ROC-Initiated Striking Off: The ROC may also remove a company’s name from the register if it has reasonable cause to believe that the company is not functioning or when the company defaults in compliance for an extended period.

Process

Step 1: Convene Board Meeting

The company must hold a board meeting to pass a resolution for striking off its name from the MCA database.

Step 2: Special Resolution

After obtaining approval from the board, a special resolution must be passed by the members at a general meeting.

Step 3: File Application with the ROC

The company must file e-Form STK-2 along with the required documents to the ROC. This form includes company information and the reasons for striking off.

Step 4: Submission of Documents

Essential documents include:

• Copy of Board resolution authorizing the filing
• Special resolution passed by shareholders
• Latest audited financial statements
• Indemnity bond and affidavit from directors

Step 5: Public Notice

The ROC will publish a public notice inviting objections, if any, from the public or stakeholders.

Step 6: Final Striking Off

If there are no objections, the ROC will strike off the company name and publish the notice in the Official Gazette.

Documents Required

• Indemnity Bond: Must be executed by the directors.
• Affidavit: Declares that the company has no liabilities.
• Board Resolution: Authorizing the directors to strike off the company.
• Special Resolution: Confirming shareholder agreement.
• Financial Statements: Latest financials of the company.

Benefits and Implications

Striking off a company from the MCA database releases it from its ongoing compliance responsibilities. It may also provide a solution for defunct companies to formally close operations without going through liquidation.

Challenges and Considerations

• Pending Liabilities: Ensure all liabilities and obligations are settled before applying.
• Accuracy of Records: Any discrepancies in submitted records can lead to rejection.
• Creditors’ Objections: Creditors may raise objections during the public notice period.

Conclusion

Removing a company name from the MCA database is a significant legal step. It requires careful compliance with statutory provisions to ensure success. Future reforms may simplify procedures, but due diligence remains crucial for a smooth process.

References

• Companies Act, 2013
• MCA Notifications

This guide simplifies the striking off process, ensuring that companies comply with mandatory requirements and legal formalities. Proper execution of each step as laid down by the MCA laws is crucial for a seamless experience.