Board Resolution for Striking Off the Company: Format, Sample & Drafting Guide

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Compliance with Companies Act, 2013

Introduction

When a company decides to voluntarily close its operations and remove its name from the Register of Companies, the board of directors must pass a formal resolution authorizing this action. The Board Resolution for Striking Off the Company is a critical legal document that initiates the company closure process under Section 248 of the Companies Act, 2013.

This resolution serves as the formal record of the board's decision and authorizes designated directors to file the necessary application (Form STK-2) with the Registrar of Companies. Without a properly drafted and executed board resolution, the strike-off application will be rejected, causing delays and additional compliance burden. This guide provides a comprehensive understanding of the resolution format, essential clauses, drafting considerations, and the complete procedure.

What is a Board Resolution for Striking Off?

A board resolution for striking off is a formal written record of the decision taken by the Board of Directors at a duly convened meeting to voluntarily remove the company's name from the ROC register. It is passed when a company has either never commenced business after incorporation or has ceased operations for two or more consecutive financial years, and the promoters wish to formally dissolve the company.

The resolution must be passed witha proper quorum at a board meeting where the agenda specifically includes the strike-off proposal. It authorizes the filing of Form STK-2, execution of affidavits and indemnity bonds, and all related compliance activities. The certified true copy of this resolution becomes a mandatory attachment to the strike-off application filed with the ROC.

Legal Framework: Section 248 of the Companies Act, 2013

Section 248 of the Companies Act, 2013, governs the voluntary strike-off procedure. Under this provision, a company may apply for removal of its name from the register if it has failed to commence business within one year of incorporation, or has not been carrying on any business or operation for a period of two immediately preceding financial years, and has not made any application within such period for obtaining dormant company status.

The application must be made by the company itself through Form STK-2, accompanied bya board resolution, special resolution of shareholders, statement of accounts, affidavit from directors, and indemnity bond. The ROC publishes a notice in the Official Gazette and on the MCA website, inviting objections for 30 days before processing the application.

Eligibility for Voluntary Strike Off

Before drafting the board resolution, ensure your company meets all eligibility criteria:

Essential Elements of Board Resolution

A valid board resolution for striking off must contain the following essential elements to ensure acceptance by ROC:

1. Company Identification

The resolution must clearly state the full legal name of the company, Corporate Identification Number (CIN), and complete registered office address. These details establish the identity of the company seeking to be struck off.

2. Meeting Details

Include the date, time, and venue of the board meeting where the resolution is passed. The meeting must be held at the registered office or another location with proper notice to all directors.

3. Primary Resolution Clause

The main resolution should state that the Board of Directors accords consent to make an application to the Registrar of Companies under Section 248 of the Companies Act, 2013, for striking off the company's name from the Register of Companies.

4. Authorization for Form STK-2

A specific clause authorizing a named director (with DIN) to file Form STK-2 and furnish necessary affidavits and indemnity bond as required under Section 248. This director becomes responsible for the application process.

5. General Authorization Clause

A clause authorizing a director to sign, execute, and submit all necessary documents, provide clarifications to ROC, and do all acts necessary to give effect to the resolution. This provides flexibility for handling queries.

6. Certification

The resolution must be certified as a true copy by an authorized signatory with their name, designation, DIN, signature, date, and place. This certification authenticates the document for ROC submission.

Sample Board Resolution Format

Below is the standard format for Board Resolution for Striking Off the Company. You can generate a customized resolution using the online tool:

https://www.patronaccounting.com/tools/download-format/board-resolution-for-striking-off-the-company

CERTIFIED TRUE COPY OF THE BOARD RESOLUTION

Passed at the Meeting of the Board of Directors

Company Name: [Full Legal Name of Company]

CIN: [Corporate Identification Number]

Registered Office: [Complete Address]

Meeting held on [Date] at [Time] at the Registered Office of the Company.

RESOLVED THAT the consent of the Board of Directors be and is hereby accorded to make an application to the Registrar of Companies, under Section 248 of the Companies Act, 2013, for striking off the name of the Company from the Register of Companies.

RESOLVED FURTHER THAT Mr./Ms. [Director Name], Director (DIN: [Number]), is hereby authorized to file Form STK-2 and furnish necessary affidavits and indemnity bond as required under Section 248.

RESOLVED FURTHER THAT Mr./Ms. [Director Name] is authorized to sign, execute, and submit all documents, provide clarifications to ROC, and do all acts necessary to give effect to these resolutions.

Certified to be True

For [Company Name]

Signature: ________________

Name: [Authorized Signatory]

Designation: [Director/Chairperson]

DIN: [Number]

Date: [DD/MM/YYYY]

Place: [City]

Step-by-Step Procedure

Step 1: Verify Eligibility

Confirm the company meets all eligibility criteria under Section 248. Ensure no pending liabilities, legal proceedings, or uncleared statutory dues exist. File any pending annual returns before proceeding.

Step 2: Issue Board Meeting Notice

Send proper notice to all directors as per the Companies Act requirements, clearly mentioning the strike off agenda. Maintain a minimum 7-day notice period unless sa horter notice is agreed by all directors.

Step 3: Convene Board Meeting

Hold the board meeting with the requisite quorum. Present the strike-off proposal with supporting details, including company status, reasons for closure, confirmation of cleared liabilities, and draft resolution.

Step 4: Pass Board Resolution

After deliberation, pass the resolution with the requisite majority. Ensure the resolution covers all necessary authorizations, including Form STK-2 filing, affidavit execution, and document submission.

Step 5: Record Minutes

Record the resolution in the minutes book within 30 days of the meeting. The minutes should capture the discussion, voting pattern, and exact resolution text passed by the board.

Step 6: Obtain Shareholders' Approval

Convene a general meeting to pass a special resolution (requiring 75% majority) approving the strike off. This is mandatory alongside the board resolution for Form STK-2 filing.

Step 7: File Form STK-2

Submit Form STK-2 on the MCA portal with certified true copies of the board resolution, special resolution, affidavit, indemnity bond, and statement of accounts not older than 30 days.

Documents Required with Board Resolution

Certified true copy of Board Resolution for striking off.

Certified true copy of the Special Resolution passed by shareholders.

Affidavit from all directors verifying eligibility criteria.

An indemnity bond from all directors indemnifying against future claims.

Statement of accounts certified by CA (not older than 30 days).

NOC from regulatory authorities (if applicable).

Copy of the latest audited financial statements.

Proof of closure of bank accounts (recommended).

Common Mistakes to Avoid

Incorrect company details or CIN in the resolution. Missing authorization clause for Form STK-2 filing. Passing a resolution without proper quorum or notice. Not mentioning the specific director's name and DIN for authorization. Using an outdated or non-compliant resolution format. Failing to obtain a special resolution from shareholders. Submitting statement of accounts older than 30 days. Not clearing pending statutory dues before filing.

Strike Off Timeline

Conclusion

The Board Resolution for Striking Off the Company is the foundational document that initiates the voluntary closure process under Section 248 of the Companies Act, 2013. A properly drafted resolution with all essential elements ensures smooth processing of your strike-off application and avoids unnecessary delays or rejections from the ROC.

Using a standardized format that complies with statutory requirements reduces the risk of errors and ensures all necessary authorizations are in place. Remember that the board resolution must be accompanied by a special resolution from shareholders, affidavits, an indemnity bond, and a statement of accounts to complete the Form STK-2 filing. With proper planning and documentation, the entire strike-off process can be completed within 3-6 months.

Frequently Asked Questions

1. Is board resolution mandatory for the company's strike off?

Yes, board resolution is a mandatory requirement for filing Form STK-2. It must be passed at a duly convened board meeting with a proper quorum and attached to the strike off application.

2. Should the resolution be on the company letterhead?

Yes, using official company letterhead adds authenticity and professionalism. The letterhead should include the company name, CIN, registered office address, and contact details.

3. Do all directors need to sign the resolution?

No, only one authorized director needs to sign the certified true copy. However, the resolution must be passed with the requisite quorum at the board meeting with majority consent.

4. What is the difference between board resolution and special resolution?

Board resolution is passed by directors at a board meeting. Special resolution is passed by shareholders at a general meeting requiring 75% majority. Both are required for strike off application.

5. Can the resolution be passed through circular resolution?

For striking off, it is recommended to pass the resolution at a physical board meeting with proper deliberation and recording in minutes, rather than through a circular resolution.

6. What if the company has only one director?

If the company has only one director (as in OPC), the single director can pass the resolution. However, ensure the company structure legally permits single-director decisions.

7. Is professional certification required?

The board resolution itself doesn't require professional certification. However, Form STK-2 may require certification by a practicing CS, CA, or CMA, depending on the company's paid-up capital.

8. Can the same director be authorized for all activities?

Yes, a single director can be authorized for filing Form STK-2, executing affidavits, and handling all related compliance. The resolution should clearly state this authorization.

9. What happens if the resolution has errors?

ROC may reject the strike off application if the resolution has material errors. You would need to pass a fresh resolution at another board meeting and re-file the application.

10. How long is the resolution valid?

The resolution remains valid until the strike-off process is completed or until superseded by another board resolution. However, the statement of accounts must not be older than 30 days at filing.

11. Can strike off application be withdrawn after filing?

Yes, the company can withdraw the application before the final order is passed by the ROC. A separate board resolution authorizing withdrawal would be required.

12. What are the consequences of not having proper resolution?

Without proper board resolution, Form STK-2 will be rejected by the ROC. This causes delays, additional compliance burden, and may attract penalties for non-compliance with procedural requirements.