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Life always started to death. Company can be created and wind up. Sometimes, Idea of a company conceives, but fail to take life.
POWER OF REGISTRAR TO REMOVE NAME (SECTION 248):
Notice for Removal of Name by the Registrar:
The Registrar may send a notice to the company and all its director of his intention to remove the name of the company from the register of companies, when the Registrar has reasonable cause to believe –
(a) a company has failed to commence its business within one year of its incorporation; or
(b) the subscribers to the memorandum have not paid the subscription within one hundred and eighty days from the incorporation of the company and a declaration to that effect has not been filed; or
(c) a company is not carrying on any business or operation for a period of two year immediately preceding financial years and has not made any application within such period for obtaining the status of a dormant company.
In the notice, the Registrar shall request the company and its directors to send their representations along with copies of relevant documents.
Application for Removal of Name by Company:
A company, by special resolution or consent of seventy – five percent members in term of paid – up share capital, may file an application to the Registrar for removing the name of the company from the register of companies. The grounds for such application shall be same –
(a) a company has failed to commence its business within one year of its incorporation; or
(b) the subscribers to the memorandum have not paid the subscription within one hundred and eighty days from the incorporation of the company and a declaration to that effect has not been filed; or
(c) a company is not carrying on any business or operation for a period of two year immediately preceding financial years and has not made any application within such period for obtaining the status of a dormant company.
On receipt of application, the Registrar shall cause a public notice to be issued. In case a company is regulated under a special Act, approval of the regulatory body under the Act shall also be obtained and enclosed with the application.
A company registered under Section 8 of this Act may not apply for removal of name in this manner.
Removal and Strike Off of Name:
The public notice shall be published in prescribed manner and also in the Official Gazette for the information of the general public. A cause may shown by the company to the Registrar that name of the company should not be removed.
At expiry of the time mentioned in the notice, the Registrar may strike off its name from the register of companies and shall publish notice in Official Gazette. On publication in the Official Gazette of this notice, the company shall stand dissolved.
Before passing an order, the Registrar shall satisfy himself the sufficient provision has been made for the realisation of all amount due to the company and for payment or discharge of its liabilities and obligations by the company within a reasonable time. If necessary, the Registrar shall obtain necessary undertaking from the managing director, directors or other person in charge of the management of the company.
The assets of the company shall be made available for the payment or discharge of all its liabilities and obligations even after the date of the order removing the name of the company from the register of companies.
The liability of every director, manager or other officer who was exercising any power of management or of every member of the company dissolved shall continue and may be enforced as if the company had not been dissolved.
The Tribunal shall still have power to wind up a company, the name of which has been struck off from the register of companies.
RESTRICTION ON MAKING APPLICATION (SECTION 249):
An application for removal of name on behalf of a company shall not be made if at any time in previous three month, the company –
(a) has changed its name or shifted its registered office from one State to another;
(b) has made a disposal for value for the property or right held by it for the purpose of disposal for gain in the normal course of trading or otherwise carrying on of business;
(c) has engaged in any other activity except the one which is necessary or expedient for the purpose of
- making an application, or
- deciding whether to make application, or
- concluding the affairs of the company, or
- complying with any statutory requirement;
(d) has made an application to the Tribunal for the sanctioning of a compromise or arrangement and the matter has not be finally concluded; or
(e) is being wound up under Chapter XX, whether voluntarily or by the Tribunal.
If company file an application for removal of name in violation, it shall be punishable with fine which may extend to one lakh rupees.
An application shall be withdrawn by the company or rejected by the Registrar as soon as any violation of any of above condition brought to his notice.
EFFECT OF COMPANY NOTIFIED AS DISSOLVED (SECTION 250):
Where a company stand dissolved under Section 248, it shall on and from the date mentioned in the notice of dissolution cease to operate as a company and the Certificate of Incorporation issued to it shall be deemed to have been cancelled. The company shall be exist only for the purpose of realisation of the amount due to the company and for the payment or discharge of the liabilities or obligation of the company.
FRAUDULENT APPLICATION FOR REMOVAL OF NAME (SECTION 251):
Where it is found that an application by a company has been made with the object of evading the liabilities of the company or with the intention to deceive the creditors or to defraud any other persons, the persons in charge of management of the company shall –
(a) be jointly and severally liable to any person or persons who had incurred loss or damage as a result of the company being notified as dissolved; and
(b) be punishable for fraud under section 447.
The Registrar may also recommend prosecution of the persons responsible for the filing of an application under section 248.
APPEAL TO TRIBUNAL (SECTION 252):
Any person aggrieved by an order of the Registrar, notifying a company as dissolved, may file an appeal to the Tribunal within a period of three years from the date of the order of the Registrar. If the tribunal is of the opinion that the removal of the name of the company from the register of companies is not justified in view of the absence of any ground of that order, it may order restoration of the name of the company in the register of companies.
The Tribunal shall give a reasonable opportunity of making representation and of being heard to the Registrar, the company and all the persons concerned.
If Registrar is satisfied that the name of the company has been struck off from the register either inadvertently or in the basis of incorrect information, he may within a period of three years may file an application before seeking restoration of such company.
A copy of the order passed by the Tribunal shall be filed by with the Registrar within thirty days from the date of the order. On receipt of the order, the Registrar shall cause the name of the company to be restored in the register of companies and shall issue a fresh certificate of incorporation.
A company or any member or creditor or workman thereof aggrieved by the company having its name struck off form the register of companies may file application before the Tribunal before the expiry of twenty years from the date of publication in the Official Gazette of the notice of strike off.
The Tribunal may order the name of the company to be restored to the register of companies on satisfaction that –
(a) at the time of name being struck off, the company was carrying on business or in operation, or
(b) other it is just.
The Tribunal may give such other directions and make such provisions as deemed just for placing the company and all other persons in the same position as nearly as may be as if the name of the company had not been struck off from the register of companies.
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