Annual Compliance Compliances

Can a struck off company get restored?

The Ministry of Corporate Affairs is taking stringent actions against shell companies and non-compliant companies not filing their annual returns and financial statements regularly. The Ministry of Corporate Affairs struck off more than 2 lakh companies and also disqualified around 3 lakh Directors under section 248(1) and section 164(2)(a) of the Companies Act, 2013 for not filing financial statements and annual return for a continuous period of two years or more. The struck off company gets reactivated by filing an appeal to the National Company Law Tribunal (NCLT). NCLT restores the struck off company in the register of companies (ROC) if the removal of the name is not justified.

What are the reasons to strike off a company?

As per Section 248(1) following are the reasons to strike off a company:

• A company has failed to commence its business within one year of its incorporation.
• A company is not carrying any business or operation for a period of two immediately preceding financial years
• The Subscribers to the memorandum have not paid the subscription which they had undertaken to pay at the time of incorporation of the company and a declaration to this effect has not been filed within one hundred and eighty days of its incorporation.
• A company by extinguishing all its liabilities, by a Special Resolution.

What is the process to restore struck off company?

Below are the processes of restoring a stricken off company:

1. Who can file an application to restore struck off company?

According to the provisions of section 252(1), an appeal can be made by anyone, within three years of strike off.

2. Filing letter of appeal in the National Company Law Tribunal

Under the provisions of Section 252(3), a letter of appeal can be written by a company or creditors or members or workman to the Tribunal within 20 years.

3. Preparation of Petition

The petition is to be filed With NCLT in form No.NCLT-9. All the relevant documents are to be submitted along with the required fee.

4. Submission of petition

A copy of petition is to be presented at the Registrar of Companies and to such other companies as directed by the Tribunal, not less than 14 days from the date fixed for hearing of the application.

5. Hearing by the Tribunal

The tribunal will hear the appeal of the petitioner and arguments of the Registrar of Companies. And if satisfied the restoration of the company will be done.

6. Ruling or order of the Tribunal

The Tribunal will make the following Order in case it agrees on the revival of struck off companies:

• Within 30 days, the petitioner shall deliver the certified true copy of the petitioner’s Order to the Registrar of Companies.
• The order copy to be published in the Official Gazette in the official seal of Registrar of Companies,
• The petitioner to pay the cost incurred by the Registrar of Companies. All pending annual returns and financial statements to be cleared by the Company as per the Companies Act, 2013.

7. Submitting the Ruling to the Registrar of Companies

Using form INC-28 an exact certified copy of the Order to be filed.

8. Publication in the Official Gazette

Upon receipt of the Order, the Registrar of Companies will get it published in its official name and seal.

9. Filing of the Pending Documents at the Registrar of the Companies

All pending annual returns and financial statements shall be filed at the Registrar of Companies.

What is the timeline for filing an application for restoration of struck off company?

The company that has been delisted by ROC can apply for reactivation within the below-discussed timelines:

• The company to apply for revival has 20 years from the date of strike-off where the order of delisting was passed by National Company Law Tribunal (NCLT).
• The company has 3 years from the date of order passed by Registrar of Companies to apply for restoration.

What are the documents to be submitted to restore a company?

Authorized Signatory or Director of the Company signs all the documents affixed by the company seal.

The following documents must be submitted:

Documents submission

The documents mentioned above must be submitted to the National Company Law Tribunal and the Registrar of Companies Office. The entire process takes about 1 to 2 months on average. The practicing professional will present all the necessary documents to the Tribunal and will file for a hearing. If the NCLT is satisfied the status of the Company will be changed.

Penalty Actions against Companies appealing for Restoration

Just filing of an appeal does not guarantee Restoration. Some of the rare orders where penal action was taken against applicants:

DIN reactivation of struck off companies

The process of DIN Reactivation can be initiated; once the strike-off is cleared.

Is the Company Automatically restored if the Order is passed by NCLT?

The answer is no. The petitioner will have to submit a certified copy of the Order with the Registrar of Companies within 30 days from the Order. After the publication of Order of Restoration in the official Gazette, it will be considered the Company is restored. All the orders regarding filing of annual returns and financial statements are to be followed as directed by NCLT.

We at Enterslice are eager to help you!

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• We have professionally skilled persons who will help you in the end to end process of restoring the Company. 
• Our recruited professional can be contacted at any time for consultation and assistance of any kind needed to reactivate your Company. 
• We have dedicated professionals who will collect all the required documents and file the appeal and application in the Tribunal for the revival of your Company.

Conclusion

The struck off companies need to seek the best advice on a priority basis. The companies need to stick on all the prescribed rules to keep it safe and progressive. The mere filing of an application does not guarantee that the company status will change. All the procedures are to be followed and it is in the best advice to the petitioner to hire an expert. It is a time taking process with complex formalities a true professional with all the experience can be of great help.

Read, More: Revival Struck Off Companies and Its Impact Analysis