As per Section 248(1) of the Companies Act 2013 the Registrar of Companies( ROC) may strike off a company if
i. The company failed to commence it’s business within a period of one year from the date of it’s incorporation or
ii, The Company is not carrying it’s business activities for last two years.
In practical scenario if any company does not file it’s Balance Sheet and Annual Return for a period of two consecutive financial years then the ROC may proceed to strike off the name of the concerned company from the Registrar of Companies.
The Registrar of companies issue show cause notice to the concerned company before start the proceeding of strike off and if it is satisfied that there is sufficient reason to do so then it proceeds to strike off the name of the company from the Registrar.
If the name of a company is strike off under the above reason then the Directors of such company also becomes disqualified to continue as a Director in any other company in terms of Section 164(2) and such disqualification continues for a period of Five Years.
Impact of such action of ROC- If any Company is strike off under sub section 1 of section 248 then Directors of the said company have to vacate the office in all companies in which they are Directors. Further in some cases the strike off companies hold various assets like Land, building, plant and machinery, Bank deposit etc and once the concerned company does not exist then those assets becomes useless. In both the cases the stake holders find immense difficulties and suffer losses due to such action of ROC.
Remedies available against such action of ROC: A person(s) aggrieved by the decision of the ROC may make an application under section 252 of the Companies Act 2013 to the National Company Law Tribunal(NCLT) within a period of Three years from the date of such action of the ROC.
Procedure to make such application: An application shall be made to the NCLT in Form NCLT-9 after giving the full particulars and the reason for such non compliance and need to be mention the reason of revival. If the company is holding any assets then the details of such assets along with proof need to be given along with the application. The application shall be accompanied by affidavits by all the applicants and the fees . Further a copy of such application need to be served to the concerned ROC also.
Once the said application is admitted by the NCLT then it may Direct to the concerned ROC to file their reply by way of affidavit within a period of Fifty days.
After receiving the reply of the concerned ROC if the NCLT is satisfied that there is sufficient reason to revive the company then it may direct to revival the same and direct to the applicant to do the pending compliance.
Once the order is issued by the NCLT then the copy of such order need to be filedin Form INC-28 with the concerned ROC within a period of Thirty days. After receiving the order the concerned ROC revive thename of the company.
Tags :Corporate Law