Removal of Names Of Companies From The Register of Companies under The Companies Act,2013!!

Removal of Names Of Companies From The Register of Companies under The Companies Act,2013!!


Jan 03


Posted by: CS Shilpi Thapar


Ministry of Corporate Affairs (MCA) issued a Notification dated 26th December, 2016 notifying Section 248, 249, 250, 251 and 252 of Companies Act, 2013 (Chapter XVIII). This chapter deals with the powers of Registrar of Companies to remove name of company from Register of Companies. MCA has appointed 26.12.2016 as effective date for enforcing Section 248 to 252.

This has replaced Section 560 of erstwhile Companies Act, 2016.

Ministry of Corporate Affairs(MCA) has also notified Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016 on 27th December, 2016.

Manner of removal of name of the company from the Register of Companies;

  1. By Registrar of Companies on suo-moto basis.
  2. By Application of Company for removal of name.
  1. Events when Registrar of Companies can remove the name of the Company on suo-moto basis;

   a. A Company has failed to commence its business within one year of its incorporation          or;

 b. A Company is not carrying on any business or operation for a period of two immediately preceding financial years and has not made any application within such period for obtaining the status of a dormant Company under the provisions of section 455 of the Companies Act 2013,

      2. By Application of Company for removal of name: a.

a. A Company may, after extinguishing all its liabilities, by a special resolution or consent of seventy-five percent members in terms of paid-up share capital, file an application in the prescribed manner to the Registrar for removing the name of the company from the Register of Companies on all or any of the grounds mentioned in point No. 1 and 2 mentioned above in Form STK – 2 prescribed under the rules made there under which is under development and would be available by some time as per the clarification given in notification by the MCA dated 26th December 2016. The Registrar shall on receipt of such application , cause a public notice to be issued in the prescribed manner.

 b. If a Company is registered under a special Act, approval of the regulatory body constituted or established under that Act shall also be obtained and enclosed with the application.

 The above 2 conditions shall not apply to a company registered under section 8.

Provided that following categories of companies shall not be removed from the Register of Companies under the rule 3 and 4 of Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016  namely:-

(i) Listed companies;

(ii) Companies that have been delisted due to non-compliance of listing regulations or listing agreement or any other statutory laws;

(iii) Vanishing companies;

(iv) Companies where inspection or investigation is ordered and being carried out or actions on such order are yet to be taken up or were completed but prosecutions arising out of such inspection or investigation are pending in the Court;

(v) Companies where notices under section 234 of the Companies Act, 1956 (1 of 1956) or section 206 or section 207 of the Companies Act,2013  have been issued by the Registrar or Inspector and reply thereto is pending or report under section 208 has not yet been submitted or follow up of instructions on report under section 208 is pending or where any prosecution arising out of such inquiry or scrutiny, if any, is pending with the Court;

(vi) Companies against which any prosecution for an offence is pending in any court;

(vii) Companies whose application for compounding is pending before the competent authority for compounding the offences committed by the company or any of its officers in default;

(viii) Companies, which have accepted public deposits which are either outstanding or the company is in default in repayment of the same;

 (ix) Companies having charges which are pending for satisfaction; and

(x) Companies registered under section 25 of the Companies Act, 1956 or section 8 of the Act.

Restriction on making application under section 248 in certain cases

Ref: Sec. 249 of the Companies Act, 2013

An application by the company under section 248(2) shall not made if, at any time in the previous three months, the Company –

  1. has changed its name or shifted its registered office from one state to another
  2. has made a disposal for value of property or rights held by it, immediately before cesser of trade or otherwise carrying on of business, for the purpose of disposal for gain in the normal course of trading otherwise carrying on of business
  3. has engaged in any other activity except the one which is necessary or expedient for the purpose of making an application under that section.
  4. has made an application to the Tribunal for the sanctioning of a compromise or arrangement and the matter has not been finally concluded.
  5. is being wound up under the Chapter XX, whether voluntarily or by the Tribunal.

 Effect of company notified as dissolved (Section 250):

 Where a company stands dissolved under section 248 of The Companies Act, 2013, it shall on and from the date mentioned in the notice under section 248(5) cease to operate as company and the certificate of incorporation issued to it shall be deemed to have been cancelled from such date except for the purpose of realizing the amount due to the company and for the payment or discharge of the liabilities or obligations of the company.

Fraudulent application for removal of name (Section 251):

Where it is found that an application by a company under section 248 (2) has been made with object of evading the liabilities of the company or deceiving the creditors or to defraud any other persons, the person in charge of the management of the company notwithstanding that the company has been notified as dissolved be jointly and severally liable to any person or persons who had incurred loss or damage as result of the company being notified as dissolved and be punishable for fraud in the manner as provided in section 447.

Further, the Registrar may also recommend prosecution of the person responsible for the filing of an application under section 248(2).

Appeal to the National Company Law Tribunal (Section 252):

  1. Any person aggrieved by an order of the Registrar notifying a company as dissolved under section 248 may file an appeal to the Tribunal within a period of three years from the date of the order of the Registrar;
  2. If a company, or any member or creditor or workman thereof feels aggrieved by the company having its name struck off from the register of companies, can make an application to the Tribunal before the expiry of twenty years from the publication in the official gazette of the notice under section 248(5)

for restoration of the  name of the company in the Register of Companies.

The Tribunal shall give a reasonable opportunity of making representations and of being heard to the Registrar, the company and all the company concerned and by the order give such other directions as deemed fit including restoration of the name in the Register of Companies.

Hence, there is lot of clarity and strictness in the new procedures for removal of the name of companies from Register of Companies maintained by Registrar of Companies. This will lead to  more transparency, accountability and governance in implementing the entire process of removal of names of companies.


Contributed by CS Shilpi Thapar & CS Bhavesh Agal

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