How to revive a Strike Off Company in India?

In recent time, MCA (Ministry of Corporate Affairs) took a lot of strict and disciplinary against those companies which have not filed their financial statements and Annual Returns on due time with the ROC (Registrar of Companies) which are considered as “shell companies” by the MCA. Due to such default, the Ministry of Corporate Affairs has struck off almost 3 lakh companies, which further helps the government to clean the corporate field of the country.
Hence, in case your company has also been struck off by the MCA, then you have landed on the right page. Here, in this blog, we will explain to you the process of revival or reactivation of your struck off company.

What is Striking off a Company?

In simple words, striking off a company means dissolving a company. When the name of the company is removed by the ROC, then such a company get struck off. As per Section 248 of the Companies Act, 2013, the Registrar has the power to strike off the company when it has been considered as defaulter due to non – fulfillment of statutory obligations, by the Registrar of Companies.

Major Reasons to Strike Off a Company

According to Section 248(1) of the Companies Act, 2013, Registrar of Companies can strike off a company due to the following reasons:

• Non – Commencement of business within one year of incorporation of the company
• Subscribers to the memorandum have not paid the subscription which they had undertaken to pay and a declaration regarding this has not been filed within 180 days from the incorporation of the company
• Company is not carrying on any operational or business activities from the last two financial years and during this time has not made any application to obtain the status of a dormant company under section 455
• Non-filing of Annual Returns and Financial Statements for a continuous period of 3 years

Filing an appeal for the revival of Strike Off Company

Where the company has been struck off due to the reasons as discussed above, then it can file an appeal with the NCLT (National Company Law Tribunal) as per Section 252 of the Companies Act, 2013 to restore the name of the company and to quash the decision of Registrar of Companies. Accordingly, Section 252 deals with the rights of the company to file an appeal to the NCLT. Some of the important sections of Companies Act, 2013 related to strike off company are as follows:

Who is eligible to file an appeal to the NCLT for the revival of strike off Company?

As per Section 252(1) of the Companies Act, 2013, an appeal for revival of the strike off Company can be made by:

• Company
• Members/Creditors of the Company
• Workmen

The said application is required to be made within twenty years from the date of publication of the notice regarding regarding striking off the name of the company in the Official Gazette.

Documents Required for the Revival of Strike Off Company

The following forms and documents needs to be submitted to NCLT and ROC respectively. Legal Window takes care of the entire process of revival of strike off company and submit all necessary documents to the authorities on your behalf.

Procedure for revival of Strike Off Company

Following is the procedure for revival of strike off Company:

• Filing letter of appeal/petition to National Company Law Tribunal (NCLT): As per Section 252(3) of the Companies Act, 2013, a letter of appeal has to be written by company or members or creditors or workman to the NCLT within 20 years from the date of striking off the company.
  The letter of appeal/petition has to be filed with NCLT in Form NCLT-9 along with the relevant documents which needs to be attached.

• Submission of Petition with the Registrar of Companies (ROC): The copy of the application or the petition which has been filed with the NCLT is also required to be submitted with the ROC and to such other companies as required by the NCLT. The said application needs to be submitted by post or in hand not less than 14 days from the date fixed for hearing.

• Hearing of the appeal by the NCLT: The NCLT will now hear the appeal of the petitioner company and the arguments of the ROC. In case the NCLT is satisfied, it will pass an order for the restoration of the name of the company in ROC records.

• Filing of order of NCLT with the ROC: As soon as the order for the restoration of the company has been passed by the NCLT, it will direct the petitioner to deliver a certified copy of the order passed to the ROC using form INC-28 within 30 days from passing of order by NCLT.

• Publication of the copy of the order in the Official Gazette: Moreover, the copy of the order needs to be published in the Official Gazette in the official seal of ROC. All costs incurred by the ROC needs to be paid by the petitioner. Further, all the pending financial statements and annual returns also needs to be cleared by the company as per the rules and regulations of Companies Act, 2013. Only after submitting copy of order to ROC and publication of order of restoration in the Official Gazette, the company will be considered as restored.

Important Note: Mere filing of an appeal to NCLT does not guarantee reactivation of your company. In few cases, penal actions has been also taken against the applicant for unnecessarily dragging ROC before the tribunal.

Takeaway

The Ministry of Corporate Affairs has taken a lot of strict actions and steps against companies for non-compliance and non-filing of statutory obligations with the ROC as per the Companies Act, 2013. Process of striking off companies have brought much required concept for rebuilding a clean and corruption free Indian economy. We think its a great initiative by the government which will further help in preventing tax evasion, money laundering and ultimately boosting the corporate sector.

For more information, contact the experts at Legal Window now.