Strike Off Company Notice STK 2 Procedure and Documentation: A Complete CMA Expert Guide

Statutory Applicability and Grounds for Strike-Off under Section 248

Section 248 of the Companies Act, 2013, read with the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016, empowers the ROC to remove the name of a company from the register under specific operational default conditions. As a CMA and corporate compliance practice, we advise finance teams to verify that the target entity strictly meets at least one of the statutory triggers before initiating any exit proceedings.

The primary grounds for applying for a strike-off include: (a) The company has failed to commence its business within one year of its incorporation; (b) 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 under Section 455; (c) The subscribers to the memorandum have not paid the subscription which they had undertaken to pay at the time of incorporation, and the mandatory declaration under Section 10A(1) has not been filed within 180 days; or (d) Physical verification conducted under Section 12(9) reveals that the company is not engaged in any business or operation.

Crucially, Section 249 outlines statutory restrictions where an application under Form STK-2 cannot be filed. A strike-off application is barred if, in the previous three months, the company has changed its name or shifted its registered office from one State to another, disposed of any property or rights for value gain, engaged in any other activity except what is necessary or expedient for making the application, made an application to the Tribunal for a compromise or arrangement, or is currently under winding up.

Procedural Roadmap: Board Approvals, Shareholder Consent, and Extinguishment of Liabilities

Executing a company strike-off requires a structured procedural timeline. Before filing Form STK-2, the company must settle all its outstanding liabilities, discharge statutory dues, and clear all trade creditors and tax obligations. Leaving residual liabilities or ongoing litigation will invite direct objections from regulatory authorities, creditors, or tax departments during the public notice phase.

The operational sequence begins with convening a Board Meeting to approve the cessation of business and resolve to apply for the removal of the company's name. Following board approval, the company must obtain the consent of at least 75% of its members in terms of paid-up share capital, either by convening an Extraordinary General Meeting (EGM) to pass a Special Resolution or by securing written consent from the requisite majority of shareholders.

Once internal approvals are secured, all pending statutory returns—including financial statements (Form AOC-4) and annual returns (Form MGT-7) up to the date of cessation of business—must be filed with the ROC. Failure to update statutory filings prior to submitting Form STK-2 will result in immediate rejection of the application by the MCA portal.

Form STK-2 Filing Mechanics and Mandatory Supporting Documentation

Form STK-2 serves as the core application form for the removal of a company’s name under Section 248(2). The application must be filed electronically on the MCA portal, backed by extensive statutory documentation, certified digital signatures (DSC) of directors, and professional certification by a Cost Accountant in practice, Chartered Accountant, or Company Secretary.

The mandatory documentation accompanying Form STK-2 includes: (1) Indemnity Bond duly notarized by every director in Form STK-3, ensuring that any hidden liabilities, claims, or losses arising post-strike-off will be personally borne by the directors; (2) An Affidavit in Form STK-4 sworn by every director, confirming the veracity of facts and stating that the company has no assets, liabilities, or ongoing legal proceedings; (3) A Statement of Accounts (balance sheet and profit & loss statement) certified by a practicing accountant, drawn up to a date not earlier than 30 days preceding the date of application.

Additionally, the application must include a copy of the special resolution passed by the members or consent of 75% of members, along with a statement concerning pending litigations, if any, involving the company. For Section 8 companies (non-profits), a no-objection certificate (NOC) from sectoral regulators is also mandatory.

Post-Filing ROC Scrutiny, Form STK-6 Public Notice, and Final Dissolution

Upon successful submission of Form STK-2 along with requisite fees, the ROC scrutinizes the application and accompanying documents. If found compliant, the Registrar publishes a public notice in Form STK-6, inviting objections from stakeholders, creditors, or the general public. This notice is published on the official MCA website, in a leading national daily newspaper, and in a local vernacular newspaper circulating in the district where the registered office is situated.

A statutory window of 30 days from the date of publication of the notice is provided for any stakeholder to raise legitimate objections. If no adverse representations or objections are received within this 30-day window, the ROC proceeds to strike off the name of the company from the Register of Companies.

Finally, the ROC publishes a notice in the Official Gazette in Form STK-7, stating that the name of the company has been struck off from the register. On and from the date of publication in the Official Gazette, the company stands dissolved, effectively concluding its legal existence and terminating ongoing statutory compliance obligations.

Risk Mitigation and Strategic Advisory for Corporate CFOs

While striking off a company via Form STK-2 provides a cost-effective alternative to formal NCLT winding-up, CFOs must exercise extreme caution. Directors signing the Form STK-4 affidavit and STK-3 indemnity bond remain personally liable for any undisclosed liabilities, tax claims from the Income Tax Department or GST authorities, or employee dues that surface after the company is dissolved.

In the event that a creditor, member, or workman feels aggrieved by the strike-off, they retain the statutory right under Section 252 to file an appeal before the National Company Law Tribunal (NCLT) within a period of 20 years from the publication of the notice under Section 248(5). If the NCLT is satisfied that the company was operational or that the removal was unjust, it can order the restoration of the company's name to the register.

To mitigate these post-dissolution risks, CMA Expert recommends conducting a comprehensive forensic and tax audit prior to filing STK-2. Ensuring absolute clearance of all contingent liabilities, obtaining formal NOCs from key trade partners, and archiving statutory books for the mandatory statutory retention period safeguards the board against future regulatory liabilities.

Frequently Asked Questions (FAQs)

Statutory References & Regulatory Citations

• Ministry of Corporate Affairs - Companies Act, 2013 and Rules
• Institute of Cost Accountants of India - Professional Guidance

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