Procedure for Revival of Strike off Company in India

In the recent years, MCA (Ministry of Corporate Affairs) has taken stringent actions against the companies that have not filed their Annual Reports and Financial Statements with the ROC (Registrar of Companies) whom they mentioned to as “shell companies” without giving them any time to make good of the default caused. In this article, we will study that what is the procedure for Revival of Strike off Company.

Further, in the year 2019, ROC has struck off more than 2 lakh companies and has also disqualified more than 3 lakh directors under section 248(1) and 164(2)(a) of the Companies Act, 2013. In such a case, where the company has been struck off on account of Non-filing of the Annual Returns and Financial statements for a continuous period of 3 years,the said company can be restored just by filling a petition with the NCLT (National Company Law Tribunal).

Which are the governing sections of Striking off?

The following listed are the governing sections of the striking off –

1. Section 248 of the Companies Act, 2013, deals with the power of ROC to struck off the name of the concerned company from the Register of Companies.
2. Section 252 of the Companies Act, 2013, deals with the right of the company to file an appeal to the NCLT.
3. The Companies (Removal of Name of Companies from the Register of Companies) Rules, 2016 also deals with the concept of strike off.
4. NCLT Rules, 2016, together with Rule 87A of the NCLT (Amendment) Rules, 2017, also addresses the concept of struck off.
5. Lastly, in the case of striking off the defunct companies, again section 248 of the Companies Act, 2013 comes into picture.  However, restoration of the name can be done under section 252 of the Companies Act, 2013.

Who can file an appeal to the NCLT for the Revival of strike off company?

The following listed are eligible to file an appeal to the NCLT for the Revival of Strike off Company in case the ROC has struck off the company –

1. Company itself
2. Member
3. Creditor
4. Workman

Provided that the said application shall be made prior to the expiry of twenty years starting from the date of publication of the notice regarding striking off the name of the company in the Official Gazette.

What are the Documents Required for the Revival of Strike off Company?

The following listed are the documents required for the Revival of Strike off Company –

What is the Procedure for the Revival of Strike off Company?

If in case any person or a company is not satisfied with the order passes by the Registrar regarding the strike-off of a company under section 248, the same can file an appeal to the NCLT. However, it is significant to note that this appeal can be filed within a period of three years, starting from the date of order.  Further, the following listed are the steps included in the procedure for the revival of strike off company –

1. Preparation and filing of the application to the NCLT – In the first and foremost step, the applicant is required to file an application for the restoration of the company whose name has been struck off by the ROC from the register of company. Further, the said application can be filed under section 252(3) of the Companies Act, 2013, together with rule 87A of the National Company Law Tribunal (Amendment) Rules, 2017. Also, it is significant to note that the petition for restoration can be filed with the NCLT within three years, starting from the date of the strike-off.
2. Submission of the Petition with ROC – In the next step, the copy of the said application has to be served with the ROC (Registrar of Companies) and other people as per Rule 87A of the National Company Law Tribunal (Amendment) Rules, 2017 either by way of post or in hand but not less than 14 days from the date of hearing.
3. Attachment of the list of Documents along with Application in NCLT-9 – Now, the applicant is required to file a list of documents needed under Annexure B of the NCLT Rules, 2016. These documents are required to be filed with the NCLT while filing the application.
4. Hearing of the Petition by NCLT: Rule 87A (3) – After filing the Petition, the NCLT is required to hear both sides. And after hearing, if the court is satisfied, it can pass an order for the restoration of the name of the company in the records of ROC.
5. File NCLT Order with the ROC – After the Tribunal passes an order for restoration of the company after struck off, and it will direct the said appellant to deliver a certified copy of the order passed to the ROC (Registrar of Companies) within a period of 30 days from order.
6. Directions by NCLT Under Rule 87A (4) – After the delivery of the order, the ROC is required to publish the order in the official gazette. Further, the appellant is also required to pay the Registrar according to the directions of the Tribunal. Thereafter, the company is needed to file the pending annual returns and financial statements with the Registrar of Companies (ROC) and pay the fee as per the NCLT.
7. Publication of order passed in the Official Gazette – Lastly, the ROC is required to publish the order passed in the official gazette.

What is the Benefit of the Revival of Strike off Company?

The revival of strike off company shall result in a double advantage. Firstly, following the seven steps mentioned above will result in the revival of strike off company and secondly, it will help the disqualified directors to restore their DIN. Such directors can now apply to the concerned registrar of companies to get their disqualification removed with ease.

Conclusion

The Ministry of Corporate Affairs (MCA) has become strict, and has taken actions against a lot of companies for the non-compliance and the non-filing of statutory form with the Registrar of Companies. Further, in simple terms, the striking off companies have brought a ray of hope for rebuilding a corruption-free economy.  This is a good initiative taken by the government, which helps in the complete clean-up of the corporate structure and also prevent tax evasion. Lastly, this also helps not only in strengthening the corporate sector but also in the prevention of money laundering.