According to the 2013 Companies Act, a “strike off” occurs when the Registrar, in accordance with the requirements of the Act, temporarily closes the Company or strikes the Company’s name from the Register of Companies. The revival of struck off companies may be done for a period of twenty years following the date of the strike-off as a replacement for winding up the business.
Any person who feels wronged by a Registrar’s order, the Company, a Member, a Creditor, or a Worker may file an appeal or application.
In accordance with section 252(1), a member, creditor, or employee of a company may file a petition for the revival of struck off company before the passing of 20 years after the company has been struck off. Other parties may file a petition under section 252(3) within three years of the publication of the notification in the official gazette. The petition’s filing fee should be a demand draft for Rs.1000.
The appeal must be filed within three years of the date of the Registrar of Companies order in the case of the Registrar’s forced striking off, and the statute of limitations is twenty years in the case of the Registrar’s voluntary striking off. Accordingly, it is contingent upon the application being submitted prior to the passage of twenty years following the date on which notice of the intention to remove the Company’s name from the Official Gazette.
Grounds for the revival of a struck off company
The following are the criteria that the NCLT(National Company Law Tribunal) uses for the revival of a struck off company: –
- The Company owns any immovable property.
- The Company has complied with the GST, Income tax, Provident Fund, and other relevant agencies aside from the Registrar of Companies.
- If there is proof that the company is still operating, as indicated by active transactions in the company’s bank statements.
- Depending on the situation, the Company renews any licenses or other documentation on an annual basis.
- Anything that demonstrates that the company is still operating or is currently functioning and that doing so would be in the public interest.
Documents required for the revival of struck off company
It is required to include the following documents with the application to change the company’s name, demonstrating that the business was genuinely operating at the time:
- The incorporation certificate
- an MOA.
- A copy of the financial statement that was audited as of the date it was struck off.
- Bank records.
- The Registrar of Companies’ order to strike someone off.
- A declaration that the petition is true.
- A copy of the board resolution approving the petition’s filing.
- PAN.
- Return of income taxes.
- If the Company owns the property, all of the property documentation is.
- Vakalatnama, or Memorandum of Appearance.
- Any other paperwork that may be needed.
Procedure related to the revival of struck off company
Following are the steps in the process of revival of struck off company back from the dead:
Application, petition, or appeal must be submitted in Form NCLT-9 format and be accompanied by a demand draft for Rs. 1000 paid out to the Ministry of Corporate Affairs’ Pay and Accounts Officer (MCA).
1. Copy of the petition is served: A copy of the petition must be served to the Registrar of Companies and any additional parties the Tribunal may permit at least fourteen days prior to the date set for the application’s hearing.
2. Tribunal Trials And Hearings: The Tribunal will hear from the Petitioner and the Respondent during the Tribunal’s trials and hearings (ROC- Registrar of Company). Furthermore, it will take note of any concerns raised in relation to the hearing’s suggested dates. The revival of the Company’s name in the ROC record may be ordered if it is satisfied following the hearing of both parties.
3. Order from the Tribunal: The Tribunal issues an order to reinstate the Company’s name in the Register of Companies. The following actions are mandated under the order:
- The applicant must send a certified copy of the order to the ROC by 30 days after the order is made.
- When the copy of the order is received, the Registrar will publish it under the Company’s name and seal in the official gazette.
- The applicant must give the Registrar the money for the appeal or application expenses until and unless the Tribunal orders otherwise.
- The Company must abide by the conditions of the Companies Act of 2013, and it must submit to the Registrar any outstanding annual returns and financial statements. In addition, they must adhere to all guidelines established within the time frame that the Tribunal may specify.
4. Compliance with ROC Orders for Filing: The Company shall submit to the Registrar of Companies a copy of the ROC Order in Form “INC-28” within 30 days of the ordered date.
5. Order publication: The Registrar will give the certified copy of the order the necessary attention and publish it in the Official Gazette together with the name and seal of the Company.
6. Filing of outstanding papers with ROC: The Company must submit pending annual reports and financial statements to the Registrar in accordance with the requirements of the Companies Act 2013. They need to follow all the regulations established under it as soon as the Tribunal so directs.
Revival of Struck Off Company by Companies Fresh Start Scheme, 2020 (CFSS-2020)
The Registrar of Companies struck off a large number of Companies in 2017, 2018, and 2019 as a result of the ability under Section 248(1)(c) to stop the operations of shells and improve company transparency. There have been three tranches of striking-off performed by the Registrar of Companies; as a result, having jurisdictions to date (ROC).
Due to the severe fines that were developed and included in the filing of the Company’s annual returns, everyone needed help reviving their companies prior to this date.
However, the government has discounted additional filing costs due to the prevalent Novel CoronaVirus since the Companies Fresh Start Scheme, 2020, was introduced (CFSS-2020).
As a result, many people have once more begun to consider how to restart their companies. (According to Rule 87A of the National Company Law Tribunal (Amendment) Rules, 2017 and Section 252 of the Companies Act of 2013, as amended.)
Company Fresh Start Scheme (CFSS-2020) offers a fantastic opportunity to reinvigorate your business without incurring any excessive fines or costs.
Benefits of the Companies Fresh Start Scheme- 2020
The rebirth of a bankrupt company would have a lot of advantages, such as: –
1. Creditors of such companies may file a lawsuit in order to reclaim their past-due amount plus interest.
2. Each director and officer will still be held accountable for the Company’s debts and obligations even after the law has discharged it.
3. A company has the right to disqualify its directors if they have yet to file their annual reports or financial statements for three consecutive fiscal years in a row.
4. The Registrar may also suggest that the people in charge of failing to file the documents and returns be put on trial.
5. Additionally, this disqualification will result in the inability to be appointed to another company or re-appointed for five years following the day on which the Company, as mentioned earlier, fails to do so.
6. Regardless of whether he now holds the director’s post, the director’s position will or must become vacant in all the companies that result in the disqualification described above.
7. Before being re-appointed or appointed, such a director must notify the Company in the question of his disqualification, even if it is later lifted (under section 164’s subsection (2)).
8. If the promoter shareholder decides to revive the company’s name by acting right away under the terms of this plan, the following benefits may be obtained: –
- Such a corporation, which has not filed returns for prior years, may now choose to complete late returns and papers merely with a small cost of Rs. 300, 400, 500, or 600. The fees will vary depending on the circumstances and may be waived; if further business fees are anticipated, they may also start.
- If overdue paperwork must be filed within the overall occupancy of the plan, no procedures against the “Company and its Officers” shall be brought for the purpose of imposing fines on accounts of delays related to specific forms and returns.
- If the requirements of the plan are met on time, any processes or prosecution that have been started will be dropped.
Conclusion
When a company’s name has been struck off by the Registrar, an order of name restoration issued under this section will have the same effect as if the company’s name had never been struck off during the interregnum. If a judge with appropriate authority orders that the company’s name be restored, it will be assumed to have remained the same throughout.
Frequently Asked Questions
Ques: Why would a company want to be struck off?
A company strike off also referred to as dissolving a business, is a non-formal procedure for winding down a limited company that is no longer needed. For example, this might be the case because the company has stopped doing business, a director is getting ready to retire, or the directors don’t want to operate the company any longer.
Ques: What happens to company assets when struck off?
Strike Off means removing the business’s name from the Register of Companies maintained by them. It is more like a Closure of the Company, and the Company will not be in existence after being Struck Off and cannot perform any operation after that.
Ques: Who can object to a company being struck off?
An objection to a company’s request to be struck off the register and dissolved may be made by any interested person. However, once a notice of the registrar’s intention to strike off the company registers at the end of two months has been published in the Gazette, the registrar may only take an objection into consideration.
Ques: What happens when a company is restored?
In general, restoring a business means that it is assumed to have continued operating as if it had not been dissolved or removed from the register. The members or directors may be placed in the same position as they were before the company or LLP was dissolved and struck off, per the court’s directive.
Ques: What happens to bank accounts when a company is struck off?
Yes, the bank account is stopped, and the money transfers to the Crown at the time the firm is struck off. The Crown wants to sell as many assets as possible in order to maximize its profit. Therefore, whether it’s intellectual property, real estate, or a printer, the authorities will endeavor to sell assets at the going rate.
