Introduction A Section 8 Company is established for the promotion of trade, art, science, sports, research, education, religion, environmental protection, charity, or other objectives. It utilizes its income and profits to promote these objectives and prohibits the payment of dividends to its members.

The process of striking off a Section 8 Company involves legally dissolving it by the Ministry of Corporate Affairs (MCA).

Eligibility to Strike off Section 8 Companies

A Section 8 Company may be struck off if it meets any of the following conditions:

1. The company has not commenced operations within a year of its incorporation.
2. The company has remained inactive for two consecutive financial years and has not applied for dormant company status under Section 455 of the Companies Act.
3. The objectives of the company have changed, making it difficult to achieve the new objectives.

Advantages of Striking off Section 8 Companies

1. If the company is inactive and has no creditors, striking off is a quick and cost-effective closure method.
2. The application fee for striking off is minimal.
3. Once a company is dissolved, there is no requirement to file annual returns and accounts with the Registrar of Companies (ROC).
4. Directors are not subjected to formal investigations unless the company is revived and enters liquidation.

Types of Strike-Off for Section 8 Companies

There are two primary ways a Section 8 Company can be struck off:

1. Strike Off by ROC:

The Registrar of Companies (ROC) may issue notices in Form STK-1 to companies and their directors, informing them of the intention to strike off the company's name. The company must submit the necessary documents within 30 days.

2. Strike Off by the Company:

A company can voluntarily apply for strike-off by submitting an STK-2 electronic application. This requires a special resolution approved by 75% of the members.

Documents Required for Striking Off a Section 8 Company

1. A certified true copy of the special resolution and the notice of the meeting with the explanatory statement.
2. Memorandum of Association (MoA).
3. Articles of Association (AoA).
4. A copy of the board resolution.
5. A certified copy of the special resolution for conversion, along with the notice convening the general meeting and explanatory statement.
6. Certificate from a Chartered Accountant (CA), Company Secretary (CS), or Cost and Works Accountant (CWA) confirming compliance with legal requirements.
7. A statement of assets and liabilities, verified by an auditor within 30 days of submission.
8. A registered valuer’s report on the market value of the company’s assets.
9. Financial statements, directors’ reports, annual returns, and auditor’s reports for the last two financial years.
10. A power of attorney from creditors, if applicable.
11. A declaration by the directors confirming compliance with any conditions imposed by the Regional Director.

Procedure for Striking Off a Section 8 Company

The step-by-step process for striking off a Section 8 Company is as follows:

1. Board Meetings & Resolutions: Convene a board meeting to approve the surrender of the company’s license.
2. General Meeting: Hold a general meeting to pass a special resolution with shareholder approval to initiate the closure process.
3. Filing MGT-14: Within 30 days of passing the special resolution at the general meeting, file Form MGT-14 with supporting documents and fees.
4. Filing INC-18: Submit Form INC-18 to the Regional Director along with the necessary documentation and conversion fees.

By following the above procedures, a Section 8 Company can be legally and efficiently struck off from the records of the Ministry of Corporate Affairs.