Removal of Name from Registrar of Companies | Section 248(2)

Removal of Name from Registrar of Companies under Section 248 (2) of the Companies Act, 2013

The Companies which does not want to carry out any business operations and is just bearing the burden of annual compliances, can proceed with closure of Company through the provisions of Section 248 (2) and 249 of the Companies Act, 2013.

The Registrar of Companies after examining the application, can remove the name of Company if it is meeting the requirement of provisions of Section 248.

GROUNDS OF MAKING THE APPLICATION:

I. Company has failed to commence its business within one year of its incorporation;

II. 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

III. The subscribers to the memorandum have not paid the subscription which they had undertaken to pay at the time of incorporation of a company and has not filed Form INC 20A within 180 days of its incorporation.

NON- APPLICABILITY OF PROVISIONS TO FOLLOWING COMPANIES:

• Listed companies;
• Delisted Companies;
• Vanishing companies;
• 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;
• Companies where notices under 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;
• Companies against which any prosecution for an offence is pending in any court;
• Companies whose application for compounding is pending before the competent authority for ethe offences committed by the company or any of its officers in default;
• Companies having outstanding public deposits or is in default in repayment of the same;
• Companies whose charges are pending for satisfaction; and
• Section 8 Companies.

PROHIBITION TO MAKE APPLICATION IF THE COMPANY HAS DONE FOLLOWING ACTIVITIES DURING THE PREVIOUS 3 MONTHS OF FILLING OF APPLICATION:

• Change of name
• Shifting of its registered office from one State to another;
• 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 or otherwise carrying on of business
• has engaged in any other activity except the one which is necessary or expedient for the purpose of making an application under that section, or deciding whether to do so or concluding the affairs of the company, or complying with any statutory requirement;
• has made an application to the Tribunal for the sanctioning of a compromise or arrangement and the matter has not been finally concluded; or
• wound up as per the provisions of the Companies Act, 2013 or under the Insolvency and Bankruptcy Code, 2016.
  

PROCESS:

The steps involved in the closure of Companies are:

Step 1: Conduct Board Meeting to obtain Boards’ approval to remove Company’s name from the Register of Companies and close the bank account of the Company

Step 2: Extinguish all the liabilities from the book of accounts

Step 3: Close the bank account of the Company

Step 4: Convene General Meeting to obtain Shareholders’ approval through special resolution or obtain consent in writing from 75% of members in terms of paid up capital

Step 5: Approval from Regulatory Authority constituted or established, if registered under any special Statue

Step 6: Filling of application with Registrar of Companies through Form STK-2 with fees of Rs. 10,000/-

Step 7: The Registrar of Companies shall publish notice to seek objections if any, within 30 days of the publication

Step 8: The Registrar of Companies shall intimate the regulatory authorities and seek objections within period of 30 days from filling of application.

Step 9: Closure of the Company

Attachments of Form STK-2

The application in Form STK 2 shall be accompanied by –

I. No objection certificate from appropriate Regulatory Authority, where ever applicable

II. Indemnity bond duly notarised by every director in Form STK 3;

III. A statement of accounts in Form No. STK-8 containing assets and liabilities of the company made up to a day, not more than thirty days before the date of application and certified by a Chartered Accountant;

IV. An affidavit in Form STK 4 by every director of the company;

V. Copy of the special resolution duly certified by each of the directors of the company or consent of seventy-five per cent of the members of the company in terms of paid-up share capital as on the date of application;

VI. Statement regarding pending litigations, if any, involving the company.

VII. Filed latest Income Tax Return

VIII. Bank account closure certificate.

******

Disclaimer: The contents of this article are for information purposes only and do not constitute an advice or a legal opinion and are personal views of the author. Readers are requested to check and refer relevant provisions of statute, circulars etc. before acting on the basis of the above write up.