REVIVAL OF STRUCK-OFF COMPANIES
♦ STRIKE OFF means temporary closure of companies or to remove or erase the name of the company from the list of companies with Registrar of companies.
♦ Strike-off can be voluntarily done by a company or compulsorily done by ROC on certain grounds as provided below.
♦ On incorporation of a company under the Companies Act, the Registrar of Companies issues a Certificate of Incorporation to the Company certifying that the company named in the Certificate has come into existence from the date of issue of the Certificate and its name has been entered in the Register of Companies maintained by the ROC.
♦ Once registered, the name of the company cannot be removed from the Register unless it is dissolved by the process of law, either as a result of its winding up or upon its amalgamation with another company. However, in case the company is a defunct company, the Companies Act provides a short-cut to the winding up process, namely striking the name of the Company off the Register of Companies by the ROC under Section 560 of Companies Act, 1956.
♦ The registrar is not bound to remove a company from the register even though an application has been made for the purpose, and it has come to his notice that the company is not functioning or that its members have been reduced to less than seven. Where the object of the application to the Registrar is to avoid liability on a suit pending against the company, the application must be rejected.
Below are the topics we have covered in this article:
1. Grounds of strike-off of company by ROC
2. Who can file application of Revival of Company ?
3. Grounds of revival of company
4. Procedure For revival of Company
5. Conclusion
GROUNDS OF STRIKE -OFF OF COMPANY BY ROC
Section 560 of Companies Act 2013 empowers Registrar of Companies to strike off names of company on following grounds:-
1. The Companies which have failed to carry on the operations within one year of its incorporation.
2. The Companies which are not carrying on any operations or business for two financial years i.e. non filing of e-Forms AOC-4 and MGT-7 during preceding two financial years.
3. In case the subscribers to the memorandum has not paid the subscription money and a declaration to this effect has not been filed (e-Form 20A ) within 180 days.
4. The Company is not carrying on any business as revealed from the physical verification of its registered office. Advertisement
However, practically, the ROC struck off the names of the Companies only on account of non-filing of e-Forms AOC-4 and MGT-7 during preceding two financial years only.
A company dissolved under section 560 can be restored on the Register of Companies by a Court order and while restoring, the Court may, by the order, give such directions and make such provisions as seen just for placing the company and all other persons in the same position as nearly as may be as if the name of the company had not been struck off.
WHO CAN FILE APPLICATION FOR REVIVAL OF COMPANY:
1. Any person aggrieved by the order of Registrar can file appeal within 3 years from date of order of Registrar.
2. Registrar on being satisfied that the name of the Company has been struck off from the Register of Companies either inadvertently or on the basis of incorrect information furnished by the Company or its Directors can file appeal within 3 years.
3. Company, or any member or creditor or workman aggrieved by Company having its name struck off from the register of companies can appeal file within 20 years from date the date of publication of notice of strike off in the Official Gazette
Here, in case of voluntary striking off, the limitation period is of twenty years and in case of compulsory striking off by ROC, the appeal has to be filed within three years of date of order of the ROC for the purpose of Revival.
GROUNDS FOR REVIVAL
The NCLT usually looks into the following grounds while considering an application for the revival of a struck-off company. These are as follows:
1. Whether Company is having any immovable property.
2. Whether Company had complied with Income tax, GST, Provident Fund and the like authorities apart from ROC.
3. Whether there is an active transactions in the bank statements of the Company evidencing the Company to be an ongoing one.
4. Whether Company has renewed any license on an annual basis, which is required to be taken like FSSAI license, Excise, etc.
5. Any other documents depending upon the circumstances and case to case basis.
PROCEDURE FOR REVIVAL OF COMPANY:
1. An application shall be made in Format of NCLT 9 along with a demand draft of Rs. 1000/- payable to Ministry of Corporate Affairs and following documents shall be attached with the said application:
- An Affidavit verifying the petition in the form NCLT 9
- Order passed by the ROC for striking off
- Certificate of Incorporation
- Memorandum of Association
- Copy of latest audited financial statements since the financial year in which the said audited financial statements has not been filed with the ROC.
- Bank Statements
- Certified true copy of the Board Resolution authorizing the practicing professional to appear before the court.
- Memorandum of Appearance
- Any other documents depending upon the circumstances and case to case basis.
2. A copy of petition shall be submitted to Registrar of Companies not less than 14 days before the date of hearing fixed with the Tribunal.
3. The Tribunal i.e. NCLT if after hearing pass order for the revival of the name of the company then the company shall:
- File certified copy of the order in Form INC-28 within 30 days to ROC
- File pending annual financial statements and annual reports to the ROC.
- And comply with the requirements of the Companies Act, 2013 and rules made there under within such time as may be directed by the Tribunal.
CONCLUSION
The effect of an order of restoration of the name of a company under this section is to place the company whose name was struck off by the Registrar in the same position as if the name of the company had never been struck off during the interregnum. If a court of competent jurisdiction directs restoration of the name of the company, it shall be deemed to have continued throughout.
{The author i.e. Surbhi Garg is a Company Secretary in Practice at Surbhi Bansal and Associates and can be reached at (M) +91-99711584732 and (E) surbhibansalandassociates@gmail.com}
Kindly Contact us in case of any queries regarding Revival of Company we will be pleased to solve them.
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