Removal of Name of the Company from Registrar of Companies (Step-By-Step Guide)

Are you a person running a business or company for some time? Do you feel like quitting your company for any reason? Are you not aware of the process to stop the functioning of your company? If you answered yes to these questions, don’t worry, you have come to the right place. This article guides you through the removal of name of the company from Registrar of Companies. You may also face a situation where the ROC removes your company name from the Registrar of Companies. You may have no clue why this happens. 

Read further to gain a better understanding of the removal of the name of your company, from the Registrar of Companies.

First, let us understand the procedure for removing your company name from ROC.

What Is the Procedure for Removal of Name of the Company from Registrar of Companies?

Eventually, running your company at some point, you may feel like quitting the company. This situation may arise if your business doesn’t move well or if you incur more loss. In such cases, you may wish to remove your company name from the Registrar of Companies. 

Section 248 of the Companies Act of 2013 addresses the removal of your company name. The procedure for this removal includes:

• You can remove your company name by using Form STK-2 of the ROC.
• You should conduct a board meeting in your company and get approval from the directors for your company name removal.
• You have to pass a special resolution to get approval from the shareholders at the general meeting.
• Suppose, any other person is involved in taking your company’s decision, you have to get approval from the concerned person.  
• After the approval, you should submit Form STK-2 along with relevant documents to ROC.
• The registrar verifies your application and asks you for further information in case of incomplete details.
• You should modify the corrections and re-submit within 15 days of intimation. If you fail to do so, your application becomes invalid, and the registrar informs you as such.
• Once the registrar receives your re-application, he verifies the same, and in case of discrepancies again, you will receive a time frame of 15 days.
• If your application passes without defects, the registrar publishes a public notice regarding the removal of your company. It comes under form STK-6. The registrar accepts any objection to the removal of your company within 30 days of the public notice.
• Consequently, if there has been no objection in the past 30 days, the registrar will remove your company name from the register of companies under MCA. He will send a notice of such removal to the official gazette. It comes under Form STK-7.

Thus, by following this procedure, you can remove your company name from the register of companies. But, in certain situations, the registrar himself removes your company name. Why does he do so? Let’s figure it out.

When Can a Registrar Remove a Company Name?

You can opt to remove your company name in case of unavoidable situations. But, there are certain situations where the registrar removes your company name without your concern. The registrar has every right to remove your company name as per Sections 248 to 252 of the companies act. 

The main reasons for this act of registrar include:

• If you fail to commence your business within one year of your company’s incorporation
• If you fail to do any business or operation for two immediately preceding financial years, and you did not make an application for obtaining the status of a dormant company.

Under these situations, the registrar has all the powers to remove your company name from the register of companies.

The registrar follows the below steps to remove your company name:

• The notice by the registrar for the removal of your company name comes under Form STK-1.
• The registrar will send notice to all directors of your company regarding the removal of your company name. It is sent to the registered address of your directors through registered post/speed post.
• The registrar will mention the reason for removal in the notice. The directors of your company should reply to the notice by representing before the registrar with relevant documents within 30 days of the notice.
• If the registrar gets satisfied with your representation, he terminates the process of removal of your company name. You can carry on your business with no further delays.
• Suppose the registrar is not satisfied with your representation, he continues the removal process.
• The registrar publishes the notice to the public under forms STK-5 and STK-5A regarding your company name removal.
• After the stipulated time given in the notice, the registrar removes your company’s name.
•  The registrar publishes it in the official gazette, and on the publication date, your company dissolves.
• Before passing the order, the registrar questions any liabilities and obligations of your company. It comes under Section 248(5).
• After the inquiry, the registrar removes your company’s name. The registrar publishes the notice in the official gazette under Form STK-7 and on the website of the Ministry Of Corporate Affairs.

By following these procedures, the registrar can remove your company’s name from the register of companies. But, what does the removal of your company name mean? Are you aware of the consequences of the removal of your company’s name? Read more.

What Does It Mean When a Company Is Removed from the Register?

The term removal of your company name from the register may sound scary to you. But, there is nothing much to worry about. Your company is removed from the register, which means your company gets dissolved. You cannot carry out any further operations or business in your company. This sounds good if you voluntarily opt for removal.

However, in the other case, you can still recover your company by applying online to MCA to reinstate your company. So, you have hope yet.

FAQs: Removal of Name of the Company from Registrar of Companies

What is Section 248 of companies?

Section 248 of the Companies Act gives the registrar the power to remove your company’s name from the register of companies. The registrar can perform this operation if he believes,

• You have not started your business within one year of incorporation of your company.
• You didn’t do any business in the previous two financial years, and you didn’t get the dormant certificate.

For the above reasons, the registrar can remove your company’s name under Section 248.

What is the notice for the strike-off of companies?

Suppose you didn’t commence business for your company within one year of its incorporation or you didn’t perform any business for two years, the registrar has the power to remove your company name. Under such a situation, the registrar issues a strike-off notice to you and all the directors of your company. 

The strike-off notice explains the reasons for your company’s removal and asks the directors to reply by representing themselves before the registrar. This strike-off notice comes under Section 248(1) of the Companies Act.

What happens when the registrar strikes off the name of the company?

In case the registrar strikes off your company’s name, your company gets dissolved, and you cannot perform any operations in your company. The shareholders of your company may suffer due to this. 

The consequences also include loss of recognition, seizure of assets, personal liability for your company’s directors, reputation damage, and difficulty restoring your company.

Bottomline

As you see from the above article, you can remove your company name from the register of companies for any personal reasons. Also, the registrar may strike your company’s name from the register of companies. Both of these cases come under Section 248 of the Companies Act. The process of removing your company name due to unavoidable circumstances may look tedious, but we are here to help you. 
The great team of experts at Instafiling guides you through the whole process of removing your company name. We also help you to reinstate your company if the registrar issues you a strike-off notice. Contact us for expert guidance. We are just a call away.

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