FORM STK – 2 For Winding Up Of Companies

The Ministry of Corporate Affairs (MCA) recently released Form STK-2 for removing a company’s name from the register of businesses, often known as winding up. The MCA will make Form STK-2 available for filing on the MCA portal beginning April 5, 2017. In this essay, we’ll take a closer look at Form STK-2.

Removal Of Company Name From Register Of Companies By Registrar

Sections 248 to 252 of the Companies Act, 2013 were brought into force by the MCA in December 2016, laying the groundwork for the removal of a company’s name from the Register of Companies. 

The Registrar of Companies has the authority under Sections 248 to 252 of the Companies Act to remove a company’s name from the register of companies if the Registrar has reasonable reasons to think that: 

  • The company did not begin operations within one year of its incorporation; 
  • For the two most recent financial years, the firm has not carried on any business or operation and has not applied for inactive company status.

If this is the case, the Registrar has the authority to strike the company’s name from the register of companies by sending a notice to the company and all of its directors.

The notification from the ROC would state that the ROC intends to remove the business’s name from the register of companies and would ask the company to send representations, as well as copies of any relevant documents, within thirty days of the notice’s date.

Using Form STK-2 To Remove The Company Name Voluntarily 

FORM STK - 2 For Winding Up Of Companies

The corporation can also start the process of deleting a company name from the register of companies by filing Form STK-2. To submit Form STK-2, the firm must have paid off all of its debts and pass a special resolution removing the company’s name from the register of companies with the approval of 75% of its paid-up share capital members. If the firm is governed by a particular Act, authorization from the regulatory authority founded or constituted under that Act should also be acquired and included with the application.

Form STK-2 Is Used To Close A Company 

After the business files Form STK-2, the Registrar has the authority and responsibility to ensure that sufficient provisions have been made for the firm to realize all amounts due it and to pay or discharge its liabilities and obligations within a reasonable time. If necessary, the ROC can also seek essential undertakings from the company’s managing director, director, or other management personnel. 

Following the fulfilment of the foregoing processes, the ROC would issue a public notice detailing the company’s planned closure. After the time period specified in the notice has passed, the Registrar may strike the company’s name from the register of companies and publish notice of the strike-off in the Official Gazette. The company is deemed dissolved upon publication of this notice in the Official Gazette.

Form STK-2 Submission Requirements 

FORM STK - 2 For Winding Up Of Companies

Form STK-2 can be used to apply for closure by all types of businesses, including private limited companies, one-person businesses, and limited firms. Form STK-2 must be accompanied by the following enclosures: 

  • Every director must sign an indemnity bond in Form STK 3, which must be notarized. 
  • A statement of accounts containing the company’s assets and liabilities prepared up to the day before the application date and confirmed by a Chartered Accountant; 
  • Every corporate director must sign an affidavit on Form STK 4; 
  • A copy of the special resolution duly certified by each of the company’s directors or approval of 75% of the company’s members in terms of paid-up share capital as of the application date. 
  • A statement of any pending legal proceedings concerning the company, if any exist.

The Managing Director or Director of the company must state on Form STK-2 that:

  • There has been no inspection or investigation ordered and carried out, or yet to be carried out or being carried out, against the company, and where inspection or investigation has been carried out, no prosecution deriving from such inspection or inquiry is pending in any court.
  • The corporation does not have any outstanding public deposits, nor is it in arrears on their repayment or interest payments;
  • There are no outstanding loans, secured or unsecured, for the company.
  • The company owes no income tax, VAT, excise duty, service tax, or any other tax or duty, by whatever name called, to the Central or any State Government, statutory authority, or local authority. 
  • All other liabilities of the company have been settled, discharged, or extinguished; 
  • All requirements of the Companies Act and rules made thereunder relating to removing the company’s name from the register of companies and matters incidental thereto have been satisfied.

Form STK-2 cannot be filed if any of the following conditions are met:

  • Three months after filing Form STK-2, the corporation changed its name or relocated its registered office from one state to another.
  • Before three months had passed since the firm filed Form STK-2, it had sold or transferred property or rights it owned. This clause does not apply to trade in which the sale of property for profit is made in the ordinary course of business. 
  • Before three months of submission of Form STK-2, the corporation participated in any other activity than that specified in the MOA or expedient. 
  • The firm has applied to the Tribunal for the Tribunal to authorize a compromise or arrangement, but the case has not been resolved 
  • The company is being wound up under the Companies Act, often known as the Insolvency and Bankruptcy Code, which was enacted in 2016.

Certification Of Form 

A Chartered Accountant in full-time practice, a Company Secretary in full-time practice, or a Cost Accountant in full-time practice should all certify Form Form STK 2.

Effects Of Removing A Company’s Name From The Register Of Corporations 

The company is going to be dissolved under section 248 of the businesses Act, 2013 if STK-2 is filed and recognized by the ROC. Furthermore, the business would cease to control as a corporation, and therefore the Certificate of Incorporation issued thereto would be deemed to be revoked as of that date – apart from the need of realizing the number because of the corporate and therefore the payment or discharge of the company’s liabilities or obligations. 

Furthermore, if an organization is dissolved using Form STK-2, the liability of all directors, managers, and other officers exercising management power, also as every member of the corporate, continues and may be enforced as if the corporate had not been dissolved.