What does Company Strike Off Mean? 

The process of closing or dissolving a company is known as Company Strike Off. A company can be closed either by voluntary or by the RoC in case of failure of rules or law by the MCA. The striking off process includes the removal of the company’s name from the list of RoC. In this blog, we will highlight the meaning of Strike Off, its types and the reasons for striking off a Company. 

Company Strike Off Meaning & Types 

Company Strike Off Meaning: In case of permanent Closing of a Company either by itself or by the Government, the company needs to follow a procedure. This procedure is known as Company Strike Off. A Company needs to follow the legal procedure to close a company and they can not shut down the company randomly. However, a company can be closed by the owner itself or by the RoC. In case of Strike Off by the Government, the company’s assets are taken over by the Government to repay the debt of the company. Let’s discuss the types of Company Strike Off in detail. 

Company Strike Off Types: A Company can be Strike Off either by Voluntary or by RoC. Let’s understand these types in detail: 

• By the Company Itself: In case if the company wants to end the Business then they can close it easily by following companies' rules and regulations. The reason can be personal, internal clashes, lack of funds, etc. 

• By the Government: In case of any non-compliance or violation of rules, the government has the authority to strike off the company. It includes no business commencement in the last year, failure in INC-20A, AoC-4, MGT-7, filing, etc.

Company Strike Off Reasons 

A Company can be shut down permanently due to personal reasons or by the RoC. In both cases the reasons to strike off a company differ from each other. Following are the reasons to strike off a company by Voluntary or by the RoC. 

• In case of Voluntary Strike Off: 

• In case of personal issues or clashes within the company can lead to Strike off a Company by itself
• In case of no Profit and continuous loss, a Company can Strike Off by itself
• Dynamic Change in the Market can cause the change in a company's segment which can lead to strike off a company 

• In case of Strike Off by the RoC: 

• In case of no business commencement within the one year from the Date of Incorporation (DOI)
• In case of failure in filing INC-20A within 180 days from the date of incorporation
• In case of no annual filing for last two years (Including AoC-4 & MGT-7)
• In case of any misinformation during the Physical Verification by the RoC. It can be an error in Office Address, or wrong address information. 

Conclusion 

Understanding the meaning of Company Strike Off is crucial for business owners and stakeholders. Whether the strike off is voluntary or enforced, it marks the formal closure of a company's legal existence. Managing the Strike Off process properly ensures compliance with regulations and helps in avoiding unnecessary penalties or complications. If you're considering striking off your company, it's essential to seek professional advice to ensure a smooth and lawful transition. 

Frequently Asked Questions

1) What does Company Status Strike Off Mean? 

The Procedure of Closing of a Company permanently either by voluntary or by the Government, the company needs to follow a procedure

2) Is there any fee to strike off a Company? 

Yes, there is a fee of ₹10,000/- to Strike Off a Company. 

3) Is MGT-14 mandatory to Strike Off the Company? 

Yes, filing of MGT-14 is mandatory to strike off any Company. In case where a Special Resolution is passed.

4) Can a Company Strike Off by Voluntary? 

Yes, a Company can be Strike Off by itself if they lack funds, or in case of any clashes. 

5) What are the reasons the Government can strike off a Company? 

Government can strike off a company if the company fails to commence the business within 1 year, did not file INC-20A within 180 days from the Date of Commencement, did not file AOC-4 & MGT-7 for the last two years, or made an error during physical verification.