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Is Your Company Struck Off?

GettyImages-167072919-e1508078327618-770x433Recently, the Registrar of Companies, Delhi and Haryana (ROC) in its drive to clean the registry have initiated the action (II stage) against the non working companies for striking off of all such Companies under Section 248(1) of the Companies Act, 2013 and notices were sent to show cause to around 31,250 Companies. Consequent to this, the ROC has struck off 24,280 Companies vide its notice dated 08.08.2018 from the Register of Companies and the said Companies are said to be dissolved now.

SECTION 248(1) OF THE COMPANIES ACT, 2013

In accordance with this Section, ROC has the power to send notice of his intention to strike off the Company in the following two cases:

1. When a Company has failed to commence its business within one year of its incorporation.

2. When a Company has not been carrying on operation for a period of two years and has not made application within such period for obtaining the status of a dormant Company.

When the notice is received as aforesaid then representation along with the requisite documents has to be filed within 30 days with the ROC and in case found satisfactory, ROC shall not strike off the Company.

WHY IS YOUR COMPANY STRUCK OFF 

The Company is struck off for the following two reasons:

1. The Company must not have done the annual filing with ROC i.e. filing of e-forms MGT-7 and AOC-4 giving ROC reason to believe that the Company is not carrying on any business;

2. Upon receipt of show cause notice by ROC as aforesaid, no representation against such notice was made thereof.

REMEDY AVAILABLE WITH THE COMPANY

The remedy available to Companies which received such notices can be further discussed in two parts:

1. Intention to restore the Company

In case the Directors have intention to restore the Company, then an appeal to that effect has to be filed to National Company Law Tribunal, Delhi (“NCLT”) showing them the reasons that such restoration is in public interest. On receipt of order of restoration by NCLT, annual filing by physical forms to ROC has to be done and the ROC consequently shall restore the name of the Company and remove disqualification of the concerned Directors.

2. Intention to not restore the Company

In case the Directors doesn’t intend to restore the Company but needs to remove disqualification of the concerned Directors, then the writ petition has to be filed with High Court for removing such disqualification. In this case, the Company shall not be restored and it shall be struck off under voluntary striking off on filing of physical annual filing and striking off forms.

It is important to note that in both the cases, the Company mandatorily has to do the pending annual filings to get any relief.

Source:taxguru.in/company-law/company-struck

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