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MCA Notification – Voluntary Exit Of Companies

The MCA notification amended the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016, to the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2023, effective from 01 May 2023.

As per the amendment, the Centre for Processing Accelerated Corporate Exit (C- PACE), which is a newly established body, shall be the Registrar of Companies to exercise functional jurisdiction of processing and disposal of applications and all matters related to it under section 248 and will have jurisdiction all over India.

Accordingly, Form No. STK-2, STK-6, and STK-7 have been amended.

PROCEDURE: The applicant shall make an application to C-PACE in Form STK-2 along with a fee of Ten Thousand Rupees (Rs. 10,000/-)

NOTE

There would be no need to attach the resolution or consent in form STK-2 mandatorily.

However, it should be noted here that Section 248(2), which provides for passing a special resolution or obtaining the consent of 75% of the members to apply for cancellation of company’s name, has not been amended or omitted, and the requirement to do so still exists.

Only the requirement of mandatory attachment to the form STK -2 has been deleted.

CONCLUSION

By bringing up this centralized system for closure in the form of C-PACE, the government intends to make things more centralized, fast-paced, and efficient without compromising the quality of the governance. This decision to shift the voluntary closure of companies to a centralized agency is part of a revamp of the approval process for various corporate filings aimed at uniform and quick decision-making processes.