Striking Off of the Company: Notice from the Registrar of Companies

The Directors of many of the defunct or non-compliant companies recently got shocked on receipt of striking off notice by the Registrar of Companies of their respective jurisdiction.  Registrar of Companies of almost all states initiated   proceedings against the defunct and non-compliant companies for removal of the name of the company from the Register of Companies.  The registrar of Companies is empowered under section 248 of the Companies Act, if the Company had failed to commence business within a period of one year from Incorporation, or the subscribers of memorandum of Association does not  paid the subscription money within 180 days from the date if Incorporation or the Company is not carrying on any business for a period of two immediately preceding  financial year.  Whatever the reasons it is stated in the Act and the rules, the basic issue in respect of the same is non-filing of Annual Accounts and Annual Return of the Company with the Registrar of companies in the prescribed manner.

For removing the name of the Company from the Register of Companies, Registrar shall send notice to the Company and each of the directors, specifying his intention to remove the name and also give public announcement in this regard in the prescribed manner.  After following the above said process and consideration of representations received if any, the Registrar may remove the name of the Company from the Register of Companies.

If the Companies actually carrying on the business and in default  for non-filing of annual accounts and annual return of the company for the previous years  are required to  complete their annual filing immediately on receipt of notice.  Other companies which are defunct and not intending to carry on the business have the option to make an application to the Registrar for striking off  the name of the Company from the Register of Companies, if more than 75% of shareholders agrees such a resolution.

Restoration of name:  Any person aggrieved by the  order of the Registrar, striking off of the Company from the Register of Companies under section 248 may prefer an appeal to the National Company Law Tribunal (NCLT) for restoration of the name  in the Register.