How to Strike-off a Nidhi Company

Introduction

Closing a Nidhi Company, whether due to regulatory non-compliance, failure to meet filing requirements, or voluntary dissolution, requires a comprehensive understanding of the process. Here’s an in-depth guide to help you navigate the strike-off procedure for a Nidhi Company effectively

A) Applicable Provisions for the Strike-off of Nidhi Company:

The procedure for striking off Nidhi Companies is outlined in Section 248 of the Companies Act, 2013, along with rules specified in the Companies (Nidhi) Rules, 2014.

B) Pre-requisites for Striking-off a Nidhi Company:

Before commencing the strike-off process, ensure the following prerequisites are fulfilled:

1. Completion of Pending Filings: File all outstanding annual returns and financial statements up to the previous financial year.
2. Closure of Bank Accounts: Close all operational bank accounts associated with the Nidhi Company and obtain the Account Closure Certificate from the bank.
3. Income Tax Compliance: File Income Tax Returns up to the previous financial year and surrender the PAN of the Company.
4. Regulatory Clearances: Obtain No Objection Certificates (NOCs) from relevant regulatory authorities if the Nidhi Company falls under their oversight.
5. Deposit Repayment: Return all deposits accepted by the company to the respective depositors.
6. Liability Settlement: Settle any outstanding payments to creditors and clear all liabilities of the company.
7. Asset Disposal: Sell off company assets and use the proceeds to settle any remaining liabilities before initiating the strike-off process.

C) Process for Striking-off a Nidhi Company:

Follow these steps to initiate and complete the strike-off process:

1. Board Resolution: Convene a Board Meeting to pass a resolution approving the strike-off of the Nidhi Company.
2. General Meeting Approval: Issue a notice for a General Meeting and obtain approval for the strike-off as a special resolution from the shareholders.
3. Form MGT-14 Filing: File Form MGT-14 within 30 days of passing the special resolution, disclosing the resolution for the strike-off.
4. Strike-off Application: Submit the strike-off application in Form STK-2 along with the necessary documents to the Registrar of Companies (ROC).
5. Application Review: Upon submission, the C-PACE (Centralised Processing Centre) will review the application and proceed with the strike-off if all requirements are met.

D) List of Documents Prepared for the Strike-off Process:

Ensure all required documents are prepared and submitted accurately for the strike-off process:

1. Board Resolution: Resolution passed by the Board of Directors approving the strike-off.
2. Special Resolution: Resolution passed by the shareholders in a General Meeting approving the strike-off.
3. EGM Notice: Notice convening the Extraordinary General Meeting (EGM) along with an explanatory statement.
4. STK-3: Indemnity bond from each Director of the company.
5. STK-4: Affidavit from each Director declaring that all liabilities have been settled.
6. STK-8: Statement of Account providing details of assets and liabilities.
7. Individual Consents: Consent from every Director of the company for the strike-off process.

By adhering to these steps and ensuring all necessary documentation is in order, you can smoothly navigate the process of striking off your Nidhi Company. It’s essential to comply with all regulatory requirements to avoid delays or complications in the strike-off process.