Struck Off Company in India

1. Struck Off Company in India: What You Need to Know If you are a business owner or a director of a company in India, you may have heard of the term "strike off" or "striking off" of a company. But what does it mean and how does it affect your company? In this blog post, we will explain what strike off of a company in India is, why it happens, what are the consequences, and how to revive a struck off company. What is strike off of a company in India? Simply put, company cancellation is a process of removing your company name from the company register in India, which is maintained by the Registrar of Companies (ROC) in India. Once the company is “untied”, it is effectively closed and therefore can no longer do any business, post its closure. Why does a company get struck off? A company can get struck off by the ROC for various reasons, such as: •The company has failed to file its annual returns or financial statements for two consecutive financial years. •The company has not started its activity within one year of its incorporation. •The company has not carried on any business or operation for two immediately preceding financial years and has not made any application for obtaining the status of a dormant company. •The ROC has reasonable grounds to believe that the company is not conducting any business or operation. •The company has voluntarily applied for strike off by filing Form STK-2 along with the prescribed fees and documents.

2. What are the consequences of strike off? When a company is struck off, it loses its legal identity and status as a corporate entity. Some of the consequences are: •The assets and liabilities of the company will vest with the government. •The directors and shareholders of the company will lose their rights and obligations related to the company. •The bank accounts and other registrations of the company will be frozen or cancelled. •The directors of the company will be disqualified from holding directorship in any other company for five years from the date of strike off. •The directors and shareholders of the company will be liable for any penalties or prosecutions for any offences committed by the company before or after its strike off. How to revive a struck off company? If your company has been struck off by the ROC and you want to revive it, you have two options: •File an appeal to the National Company Law Tribunal (NCLT) within three years from the date of strike off. You will have to submit Form NCLT-9 along with the prescribed fees and documents, and prove that your company was carrying on business or operation at the time of strike off, or that it was otherwise fit to be revived. You will also have to pay all the pending dues and penalties to the ROC and other authorities. If the NCLT is satisfied with your appeal, it will pass an order for restoration of your company’s name in the register of companies.

3. •File an application to the ROC within 20 years from the date of strike off. You will have to submit Form STK-3 along with the prescribed fees and documents, and obtain consent from all the creditors and shareholders of your company. You will also have to pay all the pending dues and penalties to the ROC and other authorities. If the ROC is satisfied with your application, it will issue a notice in the Official Gazette for restoration of your company’s name in the register of companies. Conclusion Strike off of a company in India is a serious matter that can affect your business and reputation. Therefore, it is advisable to comply with all the legal requirements and obligations related to your company, and avoid getting struck off by the ROC. However, if your company has been struck off by mistake or due to unavoidable circumstances, you can still revive it by following either of the above options. If you need any professional assistance or guidance regarding strike off or revival of your company, you can contact us at Microvista Technologies. We are a team of experts who can help you with all your corporate compliance and advisory needs.