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REDDY VIVEK (Querist)

11 July 2010 can any one please tell me about sec560. And what is defunct company?
what is struk off?

thank you very much

Ankur Garg

Ankur Garg (Expert)

13 July 2010 1. Defunct companies

The expression 'Defunct Companies' denotes those companies, which do not exist and are almost dead.

It is for the Registrar of Companies of the State or Union Territory where the registered office of the company is situated, to determine whether a company is presently in operation or not.

2. Powers of the Registrar of Companies to strike off names of defunct companies

Section 220 stipulates filing of copies of balance sheet, etc., with the concerned Registrar of Companies. Where it is established from the scrutiny of latest available balance sheet that the concerned company does not have adequate assets to meet the costs of liquidation, the course followed is to strike the name of the company off the Register of companies pursuant to section 560 of the Companies Act, 1956.

3. Circumstances in which the Registrar can exercise his power

The Registrar of Companies has power under section 560 to remove the names of defunct companies under the following circumstances:—

(i) where he has reasonable cause to believe that a company is not carrying on business or in operation; or

(ii) in case where a company is being wound up, he has reasonable cause to believe that no liquidator is acting; or

(iii) in case where a company is being wound up, he has reasonable cause to believe that the affairs of the company have been completely wound up, and any returns required to be made by the liquidator have not been made for a period of six consecutive months; or

(iv) where a private company, with a paid up capital of less than rupees one lakh or a public company, with a paid up capital of less than rupees five lakh, existing on 13th December, 2000 [on the commencement of the Companies (Amendment) Act, 2000] fails to enhance its paid up capital within a period of two years. [Sections 3(3), 3(4) and 3(5)]

Regards

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