Notice received from ROC under sec 248(1)

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A company director has received a notice from the Registrar of Companies (ROC) under Section 248(1) proposing to strike off the company's name due to unpaid share subscriptions and a failure to file the Section 10A declaration. The company, incorporated in October 2019, has conducted no business. The director is seeking advice on whether to directly reply to the show cause notice stating the company's wish to be struck off, or if compounding the non-compliance is necessary before proceeding. They also inquire about the ROC's process following such a reply and potential penalties.

Prakash Joshi

Prakash Joshi (Querist)
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03 August 2022 Dear my client received a notice from ROC under sec 248(1) for strike off the name of the company for he reason that the amount of subscription undertaken to be paid by the subscribers in the MOA has not been paid and the declaration for the same not filed with the RCO. The fact are
as under:

The company (Pvt td) incorporated in oct 2019 and not conducted any operations/business since incorporation and not filed the declaration under sec 10A regarding subscription.
The company wants to strike off the name. The annual return and financial statements for 2020-21 are duly filed.
Can I straight away reply the SCN stating that the company wants to strike off the name without mentioning about the reason for non filing declaration pursuant to sec 10A.. Or do I need to apply for compounding the non compliance of filing of declaration under sec 10A in this case . Please share your views. If anyone has a format of reply available on this point kindly share.

Thanks
P.C. Joshi

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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03 August 2022 Reply has to be filed with 30 days of notice. Other wise ROC will strike off the company. If at all struck off penalty can be initiated against director's u/s 166(7) among other sections as well.

Prakash Joshi

Prakash Joshi (Querist)
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03 August 2022 I will reply the CSCN within 30days saying that we want to strike off the company what happens after that. Will ROC inititiate the closure process himsf or the company has to do it and whether the company has to pay all the penalties for non compliances or get compounding done then only ROC will srike off the company or it's not necessary. In my case accounts and AR for one year and declaration under sec 10A not filed.No activity was undertaken by the company right from its incorporation.

Thanks

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