There is lot of instances when companies did not file their financial statements and Annual Return for many years or since incorporation. In such a cases ROC can struck off the company name from its records. Section 248(1) of Companies Act 2013 provided for suo moto power of ROC to struck off the company name If registrar has reasonable cause to believe that-
- A company has failed to commence its business within one year of its incorporation, or
- A company is not carrying on any business or operation for a period of 2 immediately preceding financial years,
Notice by ROC
ROC shall send the notice to the company and its directors for striking off the name of the company from register of companies and asked for representation along within a period of 30 days from the date of notice.
If no representation been received within 30 days of notice , ROC shall strike off the name of company from the register of companies and publish notice in the official gazette.
Restoration of Company Name
As company name can be struck off likewise it can also be revived after striking off. As per section 252 of the Companies Act, 2013, an application or appeal can be filed to the National Company Law Tribunal (NCLT) for restoring the name of the company.
Who Can File Application
As per Section 248 (5) of the Companies Act, 2013
A company, member, creditor or workmen can file application within 20 years from the date of publication in the official Gazette of notice of strike off the name of the Company.
What can be reasons for Restoration
Although it is quite difficult to say any specific reason but the company can give the grounds that company was in operation or carrying on its business or such other justified or valid reasons.
The Tribunal, may order the name of Company to be restored to the Registrar of Companies or give such other direction as it deems fit.
Any Person can file appeal to Tribunal within 3 years from the date of order of ROC.
If the Tribunal find that that the removal of the name of the company from the register of companies is not justified, it may order restoration of the name of the company in the register of companies.
An opportunity of making representation shall always be given to the ROC, the Company and all other person concerned.
Registrar can itself file the application before the Tribunal seeking restoration of name of such company within 3 years from the date of passing of the order, if it 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,
Application and Procedure for Restoration
- Any person aggrieved by an order of the Registrar, may file an appeal to the Tribunal within a period of three years from the date of the order of the Registrar.
- If the tribunal is of the opinion that the removal of the name of the company from the register of companies is not justified in view of the absence of any ground. it may order restoration of the name of the company in the register of companies.
- The Tribunal shall give a reasonable opportunity for making representation to both the parties and all the persons concerned.
- If Registrar is satisfied that the name of the company has been struck off from the register either inadvertently or in the basis of incorrect information, he may within a period of three years may file an application before seeking restoration of such company.
Filing order to ROC
Copy of the order passed by the Tribunal shall be filed by with the Registrar within thirty days from the date of the order.
On receipt of the order, the Registrar shall cause the name of the company to be restored in the register of companies and shall issue a fresh certificate of incorporation.
There is lot of clarity and strictness in the new procedures for removal and restoration of the name of companies from Register of Companies.This will lead to more transparency, accountability and governance in implementing the entire process of removal of names of companies.
Disclaimer – Please note that the above articles is based on the interpretation of related laws and judicial pronouncement which may differ from person to person. The reader are expected to take the expert opinion on the matter.