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Revival of Company

What is the Meaning of Revival of Strike off Companies?

In layman’s language, “strike off means” temporary closure of Companies or to remove or erase the name of the Company from the list of Companies with the Registrar of Companies. This is filing an application/appeal for such strike off companies for the revival of active status can be understood as revival of strike off Companies.

As per Section 252 of the Companies Act, 2013 read with Rule 87A of the National Company Law Tribunal (Amendment) Rules, 2017, the companies which are liable to be strike off from the register of companies if:-

  1. A company fails to carry on the operations within one year of its incorporation.
  2. The Company does not carry on any operations or business for two financial year’s i.e. non filing of e-Forms AOC-4 and MGT-7 during preceding two financial years.
  3. The subscribers to the memorandum has not paid the subscription money and a declaration to this effect has not been filed (eForm 20A) within 180 days.
  4. The Company is not carrying on any business as revealed from the physical verification of its registered office.

 

Whether striking off company is appealable?

Yes, if the promoter of the company is of the view that their company has been strike off from the register for any of the reason as stated supra and there is genuine justification that the default was unintentional and they are willing revival of the company, in that case they can file appeal to the concerned authority.

The appeal can be filed by any person aggrieved by the order of Registrar within 3 years from date of order of Registrar.

The appeal can be filed by Registrar on being satisfied that the name of the Company has been struck off from the Register of Companies either inadvertently or on the basis of incorrect information furnished by the Company or its Directors within 3 years.

The appeal can be filed by a Company, or any member or creditor or workman aggrieved by Company having its name struck off from the register of companies within 20 years from date the date of publication of notice of strike off in the Official Gazette

It is pertinent to mention that there must be valid grounds for the revival of company otherwise the authority may deny the revival of the company. The following are the possible grounds on which the revival of Companies can be done by National Company Law Tribunal (NCLT):

  1. If there are active transactions in the bank statements of the Company evidencing the Company is a going concern.
  2. The Company is renewing any license on an annual basis, which is required to be taken by the Company like FSSAI license, Excise, etc.
  3. The Company’s financial show the existence of any immovable property or other assets of substantial amount.
  4. In case the Company has all done other compliances with Income tax, GST, Provident Fund and the like authorities apart from ROC.
  5. Any other documents depending upon the circumstances and case to case basis.

What is the procedure for the revival of the company?

A person aggrieved by the order striking off the company, an appeal or application shall be made in format of NCLT 9 along with a demand draft of Rs. 1000/- in favor of “Pay and Accounts Officer, Ministry of Corporate Affairs” and following documents should form an indispensable part of the application or appeal:

  1. An affidavit verifying the petition in the form NCLT 6;
  2. Original order passed by the ROC for striking off
  3. Certificate of Incorporation of the Company
  4. Memorandum of Association of the Company
  5. Copy of audited financial statements since the financial year it has not been filed with the ROC
  6. Bank Statements of the company showing transactions are going on;
  7. Certified true copy of the Board Resolution authorizing the practicing professional to appear before the Appellate Authority;
  8. Memorandum of Appearance
  9. Any other documents as may be required in the case.

A copy of petition shall be submitted to Registrar of Companies not less than 14 days before the date of hearing fixed with the Tribunal.

The Tribunal i.e. NCLT after hearing, shall pass an order striking off the name or restoring the name of the Company as it deems fit.

The Company shall deliver a certified copy of the order to the ROC within 30 days in eForm INC-28, and File pending financial statements and annual returns with the Registrar and comply with the requirements of the Companies Act, 2013 and rules made there under within such time as may be directed by the Tribunal.

The Company shall file the copy of order in form INC-28 with the ROC within 30 days from the date of the order and file all pending annual returns and financial statements in accordance with the order of NCLT

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