Live Course on Drafting of Appeal and Reply of Penalty Notice by CA Sachin Sinha. Register Now!!

Sick industrial company

Prachita Jain (Article) (31 Points)

24 October 2016

One of my client has accumulated balance of losses more than its net worth as on 31.03.2016 and so it wants to file reference to BIFR for obtaining the title of Sick Unit.

There have been major changes in the definition of Sick Company as per Co Act 2013.

So, can anybody help me with new procedure for reference to BIFR and who is eligible for the same?

Reply
Follow
Share

3 Replies

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 28 October 2016

BIFR is replaced with NCLT

you can get more info from their site https://www.nclt.gov.in/rules&regulation.H T M L

Swapnil Chhaparwal (Article ) (21 Points)
Replied 29 October 2016

HI Prachita,

Please note that BIFR is still in existence and thereore, provisions of SICA still prevail. Provisions of NCLT in relation to sick companies have not been notified till date. Incase the company has negative networth i.e accumulated losses are more than the networth, the compnay is bound to file a reference with the BIFR, New Delhi.

As per Companies Act, 2013 sick company is defined as a company which has not been able to repay is dues to secured creditors within the notice period of 90 days given by 75% or more secured creditors. Also, please note that as per Companies Act, 2013 any company can be declared as a sick co.

However, as per SICA only manufacturing cos. can be declared as sick company. The company should also have 10 or more workers at anytime during the year and hold valid factory license as per Factories Act, 1948.

Please note that we specialise in revival of sick industiral units and matters before BIFR / AAIFR and are based in Mumbai. Our contact details are mentioned herein below. Please feel free to contact whenever needed.

B.D.Chhaparwal & Co., Chartered Accountants, Swapnil Chhaparwal, ACA, Email:bdc1958 @ gmail.com Mobile : 9920049331 / 022-67020484

Prachita Jain (Article) (31 Points)
Replied 02 November 2016

Hello Sir,

Thanks for replying to my query.

I have a query, the company should also have 10 or more workers at anytime during the year as per you reply.

But on the website of BIFR its given that company should be having 50 or more workers anytime during the year. So can you please give me your comments and any reference for this?