Once the name of the Company is registered then it cannot be removed from the Register unless it is dissolved by the process of law, either as a result of its winding up or upon its amalgamation with another Striking off Company. However, in case the Company is a Defunct Company, the Companies Act provides a short-cut to the winding up process, namely striking off company the name of the Company of the Register by the ROC. Thus it is an alternative mode of dissolution to the winding-up of a Company.

Striking off is preferred by a company which has relatively no or less outside liabilities. When a company is inoperative since its inception or in the past two years, it may apply for strike-off, often referred as fast-track exit. The primary condition is that the company has no assets or liabilities and has complied with relevant applicable provisions.

Features:

• Easy and quick process then liquidation
• Less expensive
• No need to comply further compliances
• Set off all liabilities
• Can be revive thereafter upto 20 years

Modes of Strike off:

• Strike off by ROC under Section 248(1) of the Companies Act 2013.
• Strike off by Company by its own under Section 248(2) of the Companies Act 2013.

Grounds of Strike off:

• A company has failed to commence its business within 1 year of incorporation;
• The company is not carrying out any business or Activity for preceding 2 financial years and has not sought the status of Dormant Company under Section 455 of the Act.

The winding up or liquidation of a company is the process by which a company’s assets are collected and sold in order to pay its debts. Any monies remaining after all debts, expenses and costs have been paid off are distributed amongst the shareholders of the company. When the winding up has been completed, the company is formally dissolved and it ceases to exist.

Broadly speaking, a company can be wound up in one of two ways. First, the Court can compulsorily wind up a company. Secondly, the shareholders or the creditors of the company can themselves apply to wind up the company in proceedings known as “voluntary winding up”

Modes of Voluntary Winding Up:

A Company can voluntary wound up itself or can opt for the modes

• By Tribunal
• Voluntary

VOLUNTARY WINDING UP

The voluntary winding up can be done by the members of the company by-

PASSING SPECIAL RESOLUTION

• As a result of the expiry of the period of its duration for which it has been incorporated.
• Any event in respect of which the articles of association provide that the company should be dissolved.