Voluntary Strike Off

Oftentimes when we have an interesting idea in our minds or when we are already planning to start or expand a business, we often look forward to incorporate a Private Limited company. When we start a company, we start it with the vision of profit making and ever continuing. 

However, destiny not always work the way we think. Due to the two most common reasons we have an urge to put a stop to that business, to save costs on carrying on the fixed and variable expenses along with unnecessary burden and cost of compliances. 

Those Reasons are: 

1. when the business is loss making or;

2. when there is a dispute amongst subscribers / shareholders. 

For that purpose, we have the following solutions:

1. Voluntary Strike off of the Company 

2. Apply for Dormancy 

3. Winding up 

4. Selling off the company 

Voluntarily Strike off is the most popular and cost-effective method of all. It is governed by Section 248 of the Companies Act, 2013. Voluntarily Strike off means when the subscribers and management come together and pass a resolution to voluntarily close the business and apply for Strike Off with respective Registrar of Companies. 

Pre-requisites of Strike off: 

1. The Annual filing of the company must have been completed before filing the form STK-2. 

2. At least 3/4th of the shareholders must have agreed to apply for voluntarily strike off, in a General Meeting, vide special resolution. 

3. There should be no creditors in the latest financials. If there are, then the company must obtain NOC from said creditors. 

4. There must be no ongoing litigation on the company. 

5. There must be no fraudulent activities, due to which the company is being applied for strike off.

Tags: Voluntary Strike Off, Close Company, Strike Off Company