Regulatory updates

The Government of India, in its budget for FY 2022-23 had announced the establishment of the Centre for Processing Accelerated Corporate Exit (C-PACE) to facilitate and speed-up the voluntary winding up of companies from the currently required two years to less than six months. Subsequently, in March’23, the Ministry of Corporate Affairs (MCA) announced the establishment of C-PACE, at the Indian Institute of Corporate Affairs (IICA) at Manesar.

Currently, Section 248 of the Companies Act, 2013 read with Rule 4 of the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016 (removal of names of companies rules) inter alia requires companies to file an application in form STK-2 along with fees of INR10,000 to the Registrar of Companies (ROC) for removing the name of the company from the register of companies.

On 17 April 2023, the Ministry of Corporate Affairs (MCA), issued the Companies (Removal of Names of Companies from the Register of Companies) Amendment Rules, 2023 (the amendment), thereby making following key revisions to Rule 4:

• Authority for removal of name: With the establishment of the C-PACE, an application for removal of name of a company (under Section 248(2) of the Companies Act, 2013) should be made to the Registrar, C-PACE (and not to the ROC). This application will be made in Form No. STK-2 along with the prescribed fee (emphasis added to highlight the change)
• Omitted certain requirements: Earlier, the approval by way of a special resolution or by consent of 75 per cent of members in terms of paid-up share capital (special resolution or consent) was required. This requirement has now been omitted Jurisdiction of C-PACE: It has been specified that for the purpose of exercising functional jurisdiction, disposal of applications and all related matters, the Registrar of C-PACE would be the RoC
• Revised forms: Revised formats of the following forms have been issued:

• Form No. STK-2: Application by a company to the ROC for removing its name from the register of companies
• Form No. STK-6: Public notice in the matter of striking off the name of a company under Section 248(2) of the Companies Act, 2013, and
• Form No. STK-7: Notice of striking off and dissolution.

Effective Date: The amendments would come into force w.e.f. 1 May 2023.

To access the text of the notification for establishment of C-PACE, please click here

To access the text of the amendment, please click here