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Revival of Struck Off Companies


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Revival of Struck Off Companies

Due to non-compliance of the Companies Act and its Rules, the Ministry of Corporate Affairs, with the Registrar of Companies (ROC) recently issued show-cause notices to a large number of companies. Subsequently, the companies also received a Notice regarding

Removal of the name of the company from the Register of Companies maintained by the ROC, as per Section 248 (1) of the Companies Act, 2013. Currently, there exist two methods of strike off under the provisions of the Act, i.e., removal by the ROC itself under Section 248(1) of the Act, and an application filed by the company itself under section 248(2). In this article, we shall deal with the first method, i.e. removal by the ROC itself.

Any person aggrieved by an order of the Registrar, notifying a company as Struck off under section 248, may file an appeal to the NCLT within a period of three years from the date of the order of the Registrar and if the concerned person can prove to the satisfaction of the NCLT 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 of the grounds on which the order was passed by the Registrar, it may order restoration of the name of the company in the register of companies.

Reasons

A company has failed to commence its business within one year of its incorporation.

The subscribers to the memorandum have not paid the subscription which they had undertaken to pay within a period of one hundred and eighty days from the date of incorporation;

A company is not carrying on any business or operation for a period of two immediately preceding financial years;

By extinguishing all its liabilities

Process

Filing of application

An application / appeal shall be filed in Form No. "NCLT – 9" with NCLT Bench having jurisdiction based on the Registered Office Address of the Company with Detailed reasons for such restoration along with the evidence and proofs; Affidavit verifying the petition in prescribed form duly notarized; Demand Draft for payment of fee of Rs. 1,000/- (Rupees One Thousand Only); Copy of MOA & AOA, Copy of Notice as issued by the concerned ROC for striking off of the Company; Copy of Board Resolution for restoration of Name, Authorization in favour of any director and appointment of Professional to appear on behalf of the Company, Memorandum of appearance with copy of the Board Resolution or the Vakalatnama, as the case may be, Latest audited financials; Proof of service of application on ROC; Any other documents in support of the case.

Filing with ROC

On getting the order for Restoration of the Name, Company shall file the copy of order with the concerned Registrar of Companies with in a period of 30 days from the date of the order in Form INC – 28.

As per the directions of the NCLT the company shall file all pending financial statements and annual returns with the Registrar and comply with the requirements of the Companies Act, 2013.

Service of Application

Applicant has to serve an advance copy of the application on the Registrar of Companies and on such other persons as the Tribunal may direct, not less than 14 days before the date fixed for hearing of the application.

Passing of Order

Where the Tribunal makes an order restoring the name of a company in the register of companies, the order shall direct that-

  • The appellant or applicant shall deliver a certified copy to the Registrar of Companies within thirty days from the date of the order;
  • On such delivery, the Registrar of Companies do, in his official name and seal, publish the order in the Official Gazette;
  • The appellant or applicant do pay to the Registrar of Companies his costs of, and occasioned by, the appeal or application, unless the Tribunal directs otherwise; and
  • The company shall file pending financial statements and annual returns with the Registrar 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.

Order in Gazette

The Registrar of Companies do, in his official name and seal, publish the order in the Official Gazette after restoration of the name of the Company in his records.

Role of ROC

Registrar of Companies or ROC is the one who has all the authority to strike off not only defunct companies but also even those companies which have failed to do all their statutory filings. The Registrar not only issued served notice mandated by law to all such companies but also subsequently struck off.

Who can Apply for Revival

Before jumping to the process of revival, let us look who all can make an appeal in NCLT to restore the company as per provisions of sections 252(3). It could be :

Company

Any member/ Creditor

Workmen

It is important to note that in a recent Order of NCLT i.e. M. G. Power System Private Limited V/s Registrar of Companies, NCT of Delhi & Haryana Dated 18th May, 2017 C.P. No. 47/2015 – Before NCLT, New Delhi

The Hon'ble NCLT has allowed the petition; even ROC has contended that the petitioner company has not filed its statutory returns and other documents since incorporation. Thus, it’s giving rise to the reasonable belief that the company was not operational. The Hon’ble NCLT states that it would be just and proper to order restoration of the name of Company in the register of the ROC. The petitioner company was directed to file all pending returns in 30 days of restoration and to deposit Rs. 25,000/- to Prime Minister Relief Fund.

The Companies Act, 2013 provides exhaustive measures for the revival of companies and the Hon'ble NCLT is vested with powers to take all necessary measures for the revival of companies. Petitioner has to ensure that the grounds, facts and documents are adequate and proper before filing any such application or appeal for revival of Company.

Frequently Asked Questions

The Company, Member or Creditor or even a Workman can make an application to revive the Company.

Such an application must be made before the expiry of 20 years from the publication in the Official Gazette of the notice of the striking-off.

A company that has been deregistered by the Registrar of Companies (ROC) can apply for revival within the below-stated timelines:

  • Where the order for deregistration has been passed by NCLT: The company has 20 years from the date of strike-off order to apply to Registrar of Companies (ROC) for revival; or
  • Where the order for deregistration has been passed by Registrar of Companies (ROC): The company has 3 years from the date of the order passed by Registrar of Companies (ROC) to apply to Registrar of Companies (ROC) for revival.

No. There are certain steps to be taken to restore the company. The applicant will have to submit a certified copy of the order with the Registrar of Companies (ROC) within 30 days from the date of the order. Only after the Registrar of Companies (ROC) publishes the order of restoration in the Official Gazette, will the company be considered to have been restored.

In addition, the company will also have to complete all the pending financial statements and annual returns with the Registrar of Companies (ROC) and comply with the requirements of the Companies Act, 2013 and rules made thereunder within such time as may be directed by the NCLT.

No, NCLT does not have jurisdiction to remove the disqualification of directors. Directors may seek relief for activation of DIN from High Courts only.

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