There are several ways by which a company can raise long-term capital, e.g. issue of equity sha...
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.
As per Section 248(1) following are the reasons to strike off a company:
Below are the processes of restoring a stricken off company:
According to the provisions of section 252(1), an appeal can be made by anyone, within three years of strike off.
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.
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.
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.
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.
The Tribunal will make the following Order in case it agrees on the revival of struck off companies:
Using form INC-28 an exact certified copy of the Order to be filed.
Upon receipt of the Order, the Registrar of Companies will get it published in its official name and seal.
All pending annual returns and financial statements shall be filed at the Registrar of Companies.
The company that has been delisted by ROC can apply for reactivation within the below-discussed timelines:
Authorized Signatory or Director of the Company signs all the documents affixed by the company seal.
The following documents must be submitted:
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.
Just filing of an appeal does not guarantee Restoration. Some of the rare orders where penal action was taken against applicants:
The petitioner was charged a fine of Rs.20,000 on the ground of vexatious cause and unnecessarily dragging ROC before the Tribunal. The case was dismissed as it turned out that the applicant had neither filed the income tax return nor any statutory filing.
Here they allowed the appeal and ordered for restoration. In this case, though the petition was not rejected, ROC was granted liberty to levy penalty on the Company.
The process of DIN Reactivation can be initiated; once the strike-off is cleared.
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 have expertise and experience in helping your Company be active again.
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.