Removal of Name of the Company from Registrar of Companies

27/12/2020 0 By indiafreenotes

Removal by the registrar

The Companies Registrar can strike-off or remove a company name if he or she has a reasonable cause to think of:

  • An organization fails to start its business within a year of its incorporation
  • The memorandum subscribers have not reimbursed the subscription within 180-days from the company’s incorporation and a declaration regarding that effect has not been filed
  • An organization has not yet been carrying on any operation or business for a time period of about two years immediately prior to the financial years without making an application for the getting the status of a dormant company

Removal Notice

The notice issued for removal would be officially published in the Gazette for the knowledge of general public. During the expiry of time given in the notice, the Company Registrar will remove the organization name from MCA database followed by publishing a notice in the Official Gazette. Once the notice gets published in the Gazette officially, the company will stand dissolved. Even though the company will be dissolved as above mentioned, the tribunal would still have power for winding up an organization whose name was removed from the companies register.

Restriction on Removal application

An application for striking-off the company’s name would not be made in the preceding three months if the company has:

  • Altered its name or even moved its registered office address from one state to another in India
  • Made a disposal of the value of property or rights being held by it for gain disposal at the time of actual course of trading or even carrying on the business
  • Make an application to tribunal for getting approval of an arrangement or compromise without the matter to be concluded
  • Organization has been wound up under the Chapter XX of Companies Act, 2013 in case voluntarily or even by the Tribunal

Removal of company’s name from MCA database on the suo-moto basis

Removal of company’s name from the register of companies on suo-moto basis is possible where the Registrar has reason to believe that:

(a) the company has failed in commencing its business within the first year of its incorporation; or

(b) the company isn’t carrying on any operation or business for a period of 2 immediately preceding FY (financial years) and has applied within that period for acquiring the dormant company status under section 455,

The registrar shall send a notice to the company and all the directors of the company, of his intention to remove the name of the company from the register of companies and requesting them to send their representations along with copies of the relevant documents, if any, within a period of thirty days from the date of the notice.”

The Registrar may remove the company’s name from the companies register in terms of the Act of Section 248:

Provided that the following categories of the organization should not be striking-off from the company’s register under the rule 4, namely:

  • Listed companies
  • Companies, which have been delisted because of non-compliance of listing agreement or listing regulations or other statutory laws
  • Companies, where investigation or inspection has been ordered and carried out or actions, which were completed yet prosecutions arising out of such investigation or inspection pending in the court
  • Vanishing companies
  • Companies whose compounding application is pending before the competent authority to compound the offenses being committed by the organization or its officers in default
  • Companies against that any prosecution of an offense is found to be pending in any court
  • Companies where notifications under Companies Act 1956, section 234 or section 207 or section 206 of the act is issued by the inspector or registrar. A Pending report under section 208 is submitted or even following the instructions regarding any prosecution emerging out of such scrutiny or inquiry if any.
  • Companies that have accepted deposits from public that are outstanding
  • Companies registered under Section 25 of the Old Companies Act, or Section 8 of the Companies Act 2013.
  • Companies having charges that are pending for the satisfaction

Voluntary application by company for striking off the name from the register of roc

Who can make application : Any company( other than Section 8 company (non-profit organization) may as per section 248(2) of the Act , may voluntarily make an application for striking off the name of the Company from the Register of companies maintained by ROC, after extinguishing all its liabilities , by obtaining approval of 75%  members in terms of paid up share capital or consent by way of special resolution on any of the ground that it has not started or commenced its business or it is not carrying on business or operation for a period of two immediately preceding financial years and not made any application for obtaining the status of the company as a dormant company.

A Company which is regulated under a special Act is required to obtain approval of the regulatory body constituted or established under that Act.

Undertakings by Directors and Discharge of Liabilities

 Before passing an order for dissolution, RoC shall satisfy himself that sufficient provision has been made for the payment or discharge of all its liabilities within a reasonable time and has obtained necessary undertakings from the Managing Director, Director or other person in charge of the management of the Company.

The Liability of every Director, manager or other officer and of every member of the Company shall continue even after the Company is dissolved and it may be enforced.

The assets of the Company shall be made available for the payment or discharge of all its liabilities and obligations even after the order removing the name of the Company from the register of Companies.

Objections or suggestions: ROC shall intimate to the authorities having jurisdiction over the Company for seeking objections within 30 days from the date of issue of the letter of intimation to:

a) Income tax authorities

b) Central exercise authority

c) Service tax authority

If no Objection is received from the aforesaid authorities within 30 days, then it shall be presumed that they have no objections to the striking off.

Dissolution of Company: If ROC has not received any objection, then after the expiry of the period specified in the notice shall strike off the name of the Company and publish a notice in form STK-7 in official Gazette, upon such publication Company shall stand dissolve and same shall also be placed on the official website of MCA.

Application or forms pending before central government: Any application for striking off or Form FTE filed with RoC prior to the commencement of these rules is pending or not disposed of, such application shall be disposed in accordance with the rules made under the Companies Act, 1956.

Publication of Notice: The Notice under sub-section (1) and (2) of section 248 shall be published in Form STK-5 or 5A (Notification dated 12th April, 2017) (in case notice for strike off received from ROC) and Form STK-6 (Voluntary strike off) which shall be:

a) Placed on official website of MCA.

b) Published in official Gazette.

c) Published in English language in a leading English Newspaper and in vernacular language in a leading vernacular language newspaper, having wide circulation in the State where the Registered Office of the Company is situated.

 In case of voluntary winding up an application for striking off shall also be placed on the website of the Company till the Disposal of such application.