Advocate Sargun Babuta

Suggestions in response to Article “Actions To Be Taken By The Companies Who Do Not Wish To Continue After Receiving The Notice For Striking Off‘”

It is written that the partners should file all the pending forms AOC 4 and MGT 7 along with representation letter and the requisite strike off forms with the Registrar along with the fees and penalty with in one month from the date  of issue of such notice. On due satisfaction the name will be struck off.

Non Filing of pending E forms:

1. Discontinue of operations:

The filing of pending annual returns depends upon the willingness to continue the company. When directors do not wish to continue the Company then compelling them to file pending e-forms is not correct. They would have kept their company updated if wanted to continue the company. At times the case is genuine as due to financial crunch or some other unexpected circumstances the filing is not done. They should only be compelled to upload the Pending Forms if they are willing to continue the Company.

2. Awareness about importance of Annual Filing:

Many of defaulters are not aware of the importance of Annual Filing because earlier the Companies Act was not very strict with the defaulting Companies and Directors. Now with receiving of this notices have given them a jerk and made them realize the importance of Annual Filing.

Now if they wish to carry on their company they should file the pending E-forms.

3. Directorship in more than one Company:

It is observed that one director holds directorship of other companies also in these cases there should be a representation filed by that Director and other Directors with a  fee stating that they  do not want to continue that Company along with the reason for non filing of Annual Returns.

 4. Concern and Motive of the Government in filing the pending E-forms:

The main intention of the Government is to close the fake and shell companies not to bother the Directors hence the process also should be made simple not complex. Filing of Annual Returns of pending Forms shall be made compulsory only in the cases where the directors wish to continue the Company in other cases one form should be introduced to file balance sheet of pending years representation letter and other relevant documents. It should be in one form only.

The Government is making MCA procedures consumer friendly, now is the time to find out the defaulters but not only with the intention  to punish them but to correct them so that they should not repeat the same mistake. This can be achieved only if there are less procedural and time consuming activities during compliance. ( in the cases where the directors holding directorship in more than one company if they wish to close down one company and give representation that company does not have any asset, liability and bank account etc they should not be made disqualified in other companies rather should be made to pay a fee and get  the name of the company struck off at the same time saving their qualification of directorship in other companies.)

(Advocate Sargun Babuta[email protected])

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June 2021