Brief of Revival of Struck Off Companies
If the company fails to start its business within a year of incorporation or if the company has not carried on any business or activity for a period of two financial years or fails to send annual returns, the registrar may place the company's name in Strike Off on its own. Strike Off means deleting from the Registry of Companies held by the Registrar of Companies the name of the company. It is more of a business termination and after being Struck Off, the company won't be in existence and can't do any activity afterwards. There is, however, a distinction between Striking Off and Winding Off Company, while Striking Off means temporary closure that allows a company to revive itself in the future, winding off means a company's permanent closure. Struck Off Company's rebirth is a method to make your business active again.
To begin with, let's explain exactly what the word 'strike off' means. In the language of the layman, "strike off means" the temporary termination of enterprises or the withdrawal or deletion of the name of the company from the list of enterprises with the registrar of enterprises.
Who can Apply for Revival?
Following are the persons who can make an appeal in NCLT to restore the company:
- Any member/ Creditor
Company Strike Off Under the Companies Act, 2013
- Section 248 addresses the power of the ROC to delete from the Registry of Companies the name of a corporation.
- Under section 252, the firm will appeal to the NCLT.
- The Companies (Removal of Companies Name from the Companies Register) Rules, 2016 also deal with strike off.
- Furthermore, Rule 87A of the NCLT (Amendment) Rules, 2017 and NCLT Rules, 2016 deal with struck off.
- Section 248 of the Companies Act 2013 falls into the picture in the case of striking out extinct companies. However, under section 252 of the Companies Act 2013, restoration may be accomplished.
What are the reasons for the revival?
The reasons for the revival of companies by NCLT are as follows:-
- If the company has any land that is immovable.
- Other than ROC, if the organization has all complied with GST, Income Tax, Provident Fund, and other bodies.
- In the event that the Company is proven to be a continuing one of the successful transactions in the account of the Company's bank statements.
- In the event that the Organization decides to renew, on an annual basis, any license such as FSSAI license, Excise, etc. that is compulsory to be taken. Any other records that are based on the conditions. It varies on a case by case basis.
- The primary reasoning watchword that needs to be developed is that there should be some document screening that the business is an ongoing one, and reviving the company is in the 'public interest.'
Documents to be sent along with attachments indicating that the company was actually in service
- Up-to-date announcements from banks
- Signed balance sheets Easily Obtainable.
- AGM Minutes/CTC of Minutes of the Board
- Copy of the company's acknowledgments paid in relation to ITR/ TDS/ Gratuity/ PF.
- Copy of recent bills/invoices for sales
- Any other government document can be issued by the Organization as proof that it would materialize as of the date.
- An Affidavit is necessary in the Form NCLT 6 to verify the petition
- The command passed by the ROC in order to strike off
- Incorporation Certificate
- Association Memorandum and AOA
- A copy of the audited financial statements would be needed if the ROC has not been filed in the fiscal year.
- Memorandum of Appearance
- Any other records subject to the circumstances and case to
What is the procedure to be followed for revival?
The applicant must, via the Registrar of Companies (ROC), file a petition for revival with NCLT in the specified form NCLT-9 for the restoration of the company's name, along with the following supporting documents:
- Register and/or other facts, as fairly open to the petitioner(s), in support of a statement made in the application or appeal or petition.
- Where the petition is lodged on behalf of the members (shareholders), the letter of consent, where appropriate, shall be issued by them.
- Affidavit for verification of the petition;
- Proof of the fee payment of Rs. 1,000/-;
- Memorandum of appearance with a copy, as the case may be, of the Board resolution or the vakalatnama;
- Power Of Attorney Certified True copy;
- Affidavit Not Claiming Company Dormant Status;
- Demonetization Affidavit;
- Audited financial statements, accounts of benefit and loss, auditors' report;
- Report by Directors, AGM Notice, Register of Attendance and Minutes;
- Certified True Copy of the company's Memorandum of Association;
- Certified True Copy of the company's Articles of Association;
- Three copies of the petition; and three copies of the petition
- In support of the case, any other documents.
The Company shall file a copy of the order with the ROC on Form INC-28 within 30 days of the date of the order, and all pending annual returns and financial statements shall be filed with the ROC in accordance with the NCLTT order.
In addition, it is important to note that the jurisdiction bench of the National Company Law Tribunal practically levies a penalty on behalf of the National Relief Fund of the Prime Minister as costs in accordance with sub-rule 4(c) of Rule 87A of the National Company Law Tribunal (Amendment) Rules, 2017 starting from a minimum amount of Rs. 25,000/- according to the Hon'ble Judge's discretion.
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Frequently Asked Questions
Where it is claimed that the name of the Company has been deleted from the Registry of Companies, it relies on inaccurate or inadvertent details given by the Company. In addition, its directors will be entitled to file an appeal within three years.
NCLT is doing the Revival of Businesses for a number of reasons. For a better understanding, please refer to the above-given context.