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Ministry of Corporate Affairs (MCA) issued a Notification dated 26th December, 2016 notifying Section 248, 249, 250, 251 and 252 of Companies Act, 2013 (Chapter XVIII). This chapter deals with Removal of Names of Companies from Register of Companies. MCA has appointed 26.12.2016 as effective date for Section 248 to 252.

This has replaced Section 560 of erstwhile Companies Act, 2016.

Ministry of Corporate Affairs has also notified Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016 on 27th December, 2016.

Manner of removal of name of the company form the Register of Companies;

1. By Registrar of Companies on suo-moto basis.
2. By Application of Company for removal of name.

1. Events when Registrar of Companies can remove the name of the Company by suo-mot;

  • A Company has failed to commence its business within one year of its incorporation or
  • A Company is not carrying on any business or operation for a period of two immediately preceding financial years and has not made any application within such period for obtaining the status of a dormant Company under the provisions of Section 455 of the Companies Act 2013

2. By Application of Company for removal of name;

A Company may, after extinguishing all its liabilities, by a special resolution or consent of seventy five percent members in terms of paid-up share capital, file an application in the prescribed manner to the registrar for removing the name of the company from the register of companies on all or any of the grounds mentioned in point No. 1 and 2 mentioned above in Form STK - 2 prescribed under the rules made there under which is under development and would be deployment by some time as per the clarification given in notification by the MCA dated 26th December 2016.

If a Company is registered under a special Act, approval of the regulatory body constituted or established under that Act shall also be obtained and enclosed with the application.

Provided that following categories of companies shall not be removed from the register of companies under the rule 3 and 4 of Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016  namely:-

(i) listed companies;

(ii) companies that have been delisted due to non-compliance of listing regulations or listing agreement or any other statutory laws;

(iii) vanishing companies;

(iv) companies where inspection or investigation is ordered and being carried out or actions on such order are yet to be taken up or were completed but prosecutions arising out of such inspection or investigation are pending in the Court;

(v) companies where notices under section 234 of the Companies Act, 1956 (1 of 1956) or section 206 or section 207 of the Act have been issued by the Registrar or Inspector and reply thereto is pending or report under section 208 has not yet been submitted or follow up of instructions on report under section 208 is pending or where any prosecution arising out of such inquiry or scrutiny, if any, is pending with the Court;

(vi) companies against which any prosecution for an offence is pending in any court;

(vii) companies whose application for compounding is pending before the competent authority for compounding the offences committed by the company or any of its officers in default;

(viii) companies, which have accepted public deposits which are either outstanding or the company is in default in repayment of the same;

(ix) companies having charges which are pending for satisfaction; and (x) companies registered under section 25 of the Companies Act, 1956 or section 8 of the Act.

Restriction on making application under section 248 in certain cases
Ref: Sec. 249 of the Companies Act, 2013

An application by the company under section 248 shall not made if, at any time in the previous three months, the Company fall in the following condition -

1. The Company has changed its name or shifted its registered office from one state to another

2. The Company has made a disposal for value of property or rights held by it, immediately before cesser of trade or otherwise carrying on of business, for the purpose of disposal for gain in the normal course of trading otherwise carrying on of business

3. The Company has engaged in any other activity except the one which is necessary or expedient for the purpose of making an application under that section.

4. The Company has made an application to the Tribunal for the sanctioning of a compromise or arrangement and the matter has not been finally concluded.

5. The Company is being wound up under the Chapter XX, whether voluntarily or by the tribunal.


Published by

CS Bhavesh Agal
(Company Secretary)
Category Corporate Law   Report

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