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How Companies Got Struck Off?

The striking off of unexpectedly high number of companies in 2017 was seen as an initiative of ‘Operation Clean Money’ launched by the govt. on 31.01.2017 against black money.

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How Companies Got Struck Off?

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  1. How Companies Got Struck Off?

  2. SERIES OF EVENTS: 1#:The striking off of unexpectedly high number of companies in 2017 was seen as an initiative of ‘Operation Clean Money’ launched by the govt. on 31.01.2017 against black money. 2#: The ROCs started issuing notices to companies from April, 2017. These Notices were put up on MCA (Ministry of Corporate Affairs) site on different dates for different places. 3#:Govt. announced that the Registrar of Companies had struck off the names of 2.9 lakh companies from the register of companies on 5th September, 2017. 4#:MCA conducted a Press Release on 6th September and stated that in addition to 2.4 lakh companies, 3 lakh Directors got disqualified. How Companies Got Struck Off?

  3. IMPACT 1#:The companies will stop working from the date of the publication of the general notice • IMPACT 2#:All the Bank Accounts will be frozen. • IMPACT 3#:Under the terms mentioned in sections 164(2) and 167(1)A of the Companies Act, if a company fails to file the Financial Statements and/or Annual Returns 3 years in a row, the Directors will have to vacate their offices. • IMPACT 4#:Simultaneously they will be removed from the other companies too even if they were active and compliant. • IMPACT 5#:They will not be permitted to operate the bank accounts of the company. • IMPACT 6#:The dues and liabilities will continue to be on the Company and its Directors. Implications of Strike Off:-

  4. MUMBAI - 64,000 AHMEDABAD - 11,265 BANGALORE - 7,399 CHENNAI - 8822 DELHI - 4,338 If the statistics of 2016 and 2017 are compared, the number of struck off companies in 2017 has seen such a drastic jump that it has sent a shock-wave in the industry. Divya Gupta (Market Analyst, MUDS Management Pvt. Ltd) Shocking Numbers:-

  5. Thus, we can see that there was a lot of similarity between the provisions of two countries. Even the appeal and revival clauses bear almost similar provisions. STEP1#: Rule 3(2) specifies that the RoC (Registrar of Companies) will send a Notice of proposed action of strike-off of companies stating the reason in it(if a company was non-operative for long time). The Notice will be sent to the Company and all its Directors by Registered post. The company will have 30 days’ time to represent their stand. STEP 2#: Under section 248(1), Rule 7, the RoC will send a pre-strike off Notice, form STK-5. It will be sent to the Company and all its Directors. As per section 248(4) it shall also be put on official gazette. Shall be put on the MCA website as well. Shall be published in Newspaper- once in English daily and second time in a vernacular daily. The Roc also required to inform the concerned regulatory and tax authorities. A 30-day period was granted for objections, if any. STEP 3#: After expiry of thirty days, Roc shall once again put the Notice in official gazette, under section 248(5), Rule 9, Form STK-7. This strike-off notice shall be on the MCA website as well. STEP 4#: After this, the company can be officially dissolved. The Process of Strike Off:-

  6. After the dissolution, the company concerned can avail options mentioned in the Companies Act, for revival/restoration. The specific sections explain the process in detail. The other option was going for legal recourse specially if they feel that the RoC has not followed the required procedure at any given time The strike-off is a complicated procedure and the RoC must make sure that it follows ALL the required procedures under the Companies Act, to a T. Shweta Gupta (Founder and CEO, MUDS) For any query or doubts, please contact us: call at 9599653306 or mudsmanagement@gmail.com OR Visit : https://www.muds.co.in CONCLUSION:-

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