Removal of Names of Companies Amendment Rules 2023 is applicable from 10th May 2023. Removal of Names of Companies Rules 2016 as amended by the Companies (Removal of Names of Companies from the Register of Companies) Second Amendment Rules, 2023.
Chapter XVIII (Sections 248 to 252 ) of the Companies Act, 2013 deals with the provisions related to removal of names of companies from the register of companies. Read with section 248 “Power of Registrar to remove name of company from register of companies”.
The Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016
[Published vide G.S.R. 1174(E), dated 26-12-2016 and subsequently amended by G.S.R. 355(E), dated 12-04-2017, G.S.R. 350(E), dated 08-05-2019 and G.S.R. 420(E), dated 29-06-2020, G.S.R. 436(E), dated 09-06-2022, G.S.R. 658(E), dated 24-08-2022, G.S.R. 298(E), dated 17-04-2023 and G.S.R. 354(E), dated 10-05-2023]
In exercise of the powers conferred by sub-sections (1), (2) and (4) of section 248 read with section 469 of the Companies Act, 2013 (18 of 2013) and in supersession of the Companies (Central Government) General Rules and Forms, 1956 except as respects things done or omitted to be done before such supersession, the Central Government hereby makes the following rules, namely: –
Rule-1: Short title and commencement
Rule-1(1): These rules may be called the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016.
Rule-1(2): They shall come into force on the date of their publication in the Official Gazette.
Rule-2: Definitions
Rule-2(1): In these rules, unless the context otherwise requires, –
- (a) “Act” means the Companies Act, 2013 (18 of 2013);
- (b) “Form” or “e-Form” means a non-electronic form or an electronic form annexed to these rules.
Rule-2(2): Words and expressions used in these rules but not defined and defined in the Act or in the Companies (Specification of Definitions Details) Rules, 2014, shall have the same meanings respectively assigned to them in the Act or in the said rules.
Rule-3: Removal of name of company from the Register on suo-motu basis
Rule-3(1): The Registrar of Companies may remove the name of a company from the register of companies in terms of sub-section (1) of section 248 of the Act:
Provided that following categories of companies shall not be removed from the register of companies under this rule and rule 4, namely: –
- (i) listed companies;
- (ii) companies that have been delisted due to non-compliance of listing regulations or listing agreement or any other statutory laws;
- (iii) vanishing companies;
- (iv) companies where inspection or investigation is ordered and being carried out or actions on such order are yet to be taken up or were completed but prosecutions arising out of such inspection or investigation are pending in the Court;
- (v) companies where notices under section 234 of the Companies Act, 1956 (1 of 1956) or section 206 or section 207 of the Act have been issued by the Registrar or Inspector and reply thereto is pending or report under section 208 has not yet been submitted or follow up of instructions on report under section 208 is pending or where any prosecution arising out of such inquiry or scrutiny, if any, is pending with the Court;
- (vi) companies against which any prosecution for an offence is pending in any court;
- (vii) companies whose application for compounding is pending before the competent authority for compounding the offences committed by the company or any of its officers in default;
- (viii) companies, which have accepted public deposits which are either outstanding or the company is in default in repayment of the same;
- (ix) companies having charges which are pending for satisfaction; and
- (x) companies registered under section 25 of the Companies Act, 1956 or section 8 of the Act.
Explanation: For the purposes of clause (iii), the expression “vanishing company” means a company, registered under the Act or previous company law or any other law for the time being in force and listed with Stock Exchange which has failed to file its returns with the Registrar of Companies and Stock Exchange for a consecutive period of two years, and is not maintaining its registered office at the address notified with the Registrar of Companies or Stock Exchange and none of its directors are traceable.
Rule-3(2): For the purpose of sub-rule (1), the Registrar shall give a notice in writing in Form STK-1 which shall be sent to all the directors of the company at the addresses available on record, by registered post with acknowledgement due or by speed post.
Rule-3(3): The notice shall contain the reasons on which the name of the company is to be removed from the register of companies and shall seek representations, if any, against the proposed action from the company and its Directors along with the copies of relevant documents, if any, within a period of thirty days from the date of the notice.
Rule-4: Application for removal of name of company
Rule-4(1): [An application for removal of name of a company under sub-section (2) of section 248 shall be made to the Registrar, Centre for Processing Accelerated Corporate Exit in Form No. STK-2 along with fee of ten thousand rupees.]1
[1Sub-rule(1) in Rules 4 has been substituted w.e.f. 1st May 2023 by the Companies (Removal of Names of Companies from the Register of Companies) Amendment Rules, 2023 vide Notification No. G.S.R. 289(E), dated 17.04.2023.]
[Provided that the company shall not file an application unless it has filed overdue financial statements under section 137 and overdue annual returns under section 92, up to the end of the financial year in which the company ceased to carry its business operations:
Provided further that in case a company intends to file the application after the action under subsection (1) of section 248 has been initiated by the Registrar, it shall file all pending financial statements under section 137 and all pending annual returns under section 92, before filing the application:
Provided also that once notice under sub-section (5) of section 248 has been issued by the Registrar for publication pursuant to the action initiated under sub-section (1) of section 248, a company shall not be allowed to file the application under this sub-rule.][1]
[1] Provisos in sub-rule(1) in Rules 4 has been inserted w.e.f. 10th May 2023 by the Companies (Removal of Names of Companies from the Register of Companies) Second Amendment Rules, 2023 vide Notification No. G.S.R. 354(E), dated 10.05.2023.
Rule-4(2): Every application under sub-rule (1) shall accompany a no objection certificate from appropriate Regulatory Authority concerned in respect of following companies, namely: –
(i) companies which have conducted or conducting non-banking financial and investment activities as referred to in the Reserve Bank of India Act, 1934 (2 of 1934) or rules and regulations thereunder;
(ii) housing finance companies as referred to in the Housing Finance Companies (National Housing Bank) Directions, 2010 issued under the National Housing Bank Act, 1987 (53 of 1987);
(iii) insurance companies as referred to in the Insurance Act, 1938 (4 of 1938) or rules and regulations thereunder;
(iv) companies in the business of capital market intermediaries as referred to in the Securities and Exchange Board of India Act, 1992 (15 of 1992) or rules and regulations thereunder;
(v) companies engaged in collective investment schemes as referred to in the Securities and Exchange Board of India Act, 1992 (15 of 1992) or rules and regulations thereunder;
(vi) asset management companies as referred to in the Securities and Exchange Board of India Act, 1992 (15 of 1992) or rules and regulations thereunder;
(vii) any other company which is regulated under any other law for the time being in force.
Rule-4(3): The application in Form STK-2 shall be accompanied by –
(i) indemnity bond duly notarised by every director in Form STK-3;
[Provided that in case of a ─
(a) Government company in which the entire paid up share capital is held by the Central Government, or by any State Government or Governments or by the Central Government and one or more State Governments; or
(b) subsidiary of a Government company, referred to in clause (a), in which the entire paid up share capital is held by that Government company,
a duly notarised indemnity bond in Form STK-3A shall be given by an authorised representative, not below the rank of Under Secretary or its equivalent, in the administrative Ministry or Department of the Government of India or the State Government, as the case may be, on behalf of the company;]2
[2The above proviso was inserted w.e.f. 29th June 2020 by the Companies (Removal of Names of Companies from the Register of Companies) Amendment Rules, 2020 vide G.S.R. 420(E), dated 29-06-2020.]
(ii) a statement of accounts in Form No. STK-8 containing assets and liabilities of the company made up to a day, not more than thirty days before the date of application and certified by a Chartered Accountant;
(iii) An affidavit in Form STK-4 by every director of the company;
[(iv) Omitted w.e.f. 1st May 2023 by the Companies (Removal of Names of Companies from the Register of Companies) Amendment Rules, 2023 vide Notification No. G.S.R. 289(E), dated 17.04.2023.]
(v) a statement regarding pending litigations, if any, involving the company.
Rule-4(3A): [The Registrar, Centre for Processing Accelerated Corporate Exit established under sub-section (1) of section 396, shall be the Registrar of Companies for the purposes of exercising functional jurisdiction of processing and disposal of applications made in Form No. STK-2 and all matters related thereto under section 248 having territorial jurisdiction all over India.][1]
[2][Rule-4(4): (a) Where the Registrar, on examining the application made in Form STK-2, finds that it is necessary to call for further information or finds such application or any document annexed therewith is defective or incomplete in any respect, he shall inform to the applicant to remove the defects and re-submit the complete Form within fifteen days from the date of such information, failing which the Registrar shall treat the Form as invalid in the electronic record, and shall inform the applicant, accordingly.
(b) After the re-submission of the Form or document, if the Registrar finds that the Form or document is defective or incomplete in any respect, he shall give further time of fifteen days to remove such defects or complete the Form, failing which the Registrar shall treat the Form as invalid in the electronic record and shall inform the applicant, accordingly.
(c) Any re-submission of the application in Form STK-2 made prior to the commencement of the Companies (Removal of Names of Companies from the Register of Companies) Amendment Rules, 2022 shall not be counted for the purposes of reckoning the maximum number of re-submissions of such Form.]
[1] Sub-rule(3A) in Rule 4 has been inserted w.e.f. 1st May 2023 by the Companies (Removal of Names of Companies from the Register of Companies) Amendment Rules, 2023 vide Notification No. G.S.R. 289(E), dated 17.04.2023.
[2] Sub-rule(4) in Rule 4 newly inserted w.e.f. 9th June, 2022 by the Companies (Removal of Names of Companies from the Register of Companies) Amendment Rules, 2022 vide G.S.R. 436(E), dated 09.06.2022.
Rule-5: Manner of filing of application
Rule-5(1): The application in Form STK-2 shall be signed by a director duly authorised by the Board in their behalf.
Rule-5(2): Where the director concerned does not have a registered digital signature certificate, a physical copy of the form duly filled in shall be signed manually by the director duly authorised in that behalf and shall be attached with the Form STK-2 while uploading the form.
Rule-6: Form to be certified
The Form STK-2 shall be certified by a Chartered Accountant in whole time practice or Company Secretary in whole time Practice or Cost Accountant in whole time practice, as the case may be.
Rule-7: Manner of publication of notice
Rule-7(1): The notice under sub-section (1) or sub-section (2) of section 248 shall be in Form STK-5 or STK-6, as the case may be, and be-
- (i) placed on the official website of the Ministry of Corporate Affairs on a separate link established on such website in this regard;
- (ii) published in the Official Gazette;
- (iii) published in English language in a leading English newspaper and at least once in vernacular language in a leading vernacular language newspaper, both having wide circulation in the State in which the registered office of the company is situated.
Provided that in case of any application made under sub-section (2) of section 248 of the Act, the company shall also place the application on its website, if any, till the disposal of the application.
Provided further that the publication of notice under clause (iii) of this sub-rule, in respect of cases falling under subsection (1) of section 248 shall be in Form No. STK-5A.
Rule-7(2): The Registrar of Companies shall, simultaneously intimate the concerned regulatory authorities regulating the company, viz, the Income-tax authorities, central excise authorities and service-tax authorities having jurisdiction over the company, about the proposed action of removal or striking off the names of such companies and seek objections, if any, to be furnished within a period of thirty days from the date of issue of the letter of intimation and if no objections are received within thirty days from the respective authority, it shall be presumed that they have no objections to the proposed action of striking off or removal of name.
Rule-8: Manner of notarisation, appostilisation or consularisation of indemnity bond and declaration in case of foreign nationals or non-resident Indians
For the purposes of these rules, if the person is a foreign national or non-resident Indian, the indemnity bond, and declaration shall be notarised or appostilised or consularised.
Rule-9: Notice of striking off and dissolution of company
The Registrar shall cause a notice under subsection (5) of section 248 of striking off the name of the company from the register of companies and its dissolution to be published in the Official Gazette in Form STK-7 and the same shall also be placed on the official website of the Ministry of Corporate Affairs.
Rule-10: Applications or forms pending before Central Government
Any application or pending proceeding for striking off or Form-FTE filed with the Registrar of Companies prior to the commencement of these rules but not disposed of by such authority for want of any information or document shall, on its submission, to the satisfaction of the authority, be disposed of in accordance with the rules made under the Companies Act, 1956 (1 of 1956).