FAQ’s – ROC NOTICE U/S 248 - Series - 355
FAQ’s – ROC NOTICE U/S 248
SHORT SUMMARY:
As PIB Report, during F.Y. 2017-18 ROCs identified and
removed from the ROC the names of 2,26,166 companies; 3,09,619 directors
disqualified.
2nd drive to be launched during the current
financial year 2018-19; a total 2, 25,910 companies identified for being
struck-off.
Many ROC’s has issued notices in form STK-5 in the month of
May and June, 2018 u/s 248(4) of Companies Act, 2013. Notice has been sent to
those Companies, which according to ROC have not been carrying on any business
or operation for a period of two immediately preceding financial years.
The main thrust of this editorial is “TO DISCUSS THE FAQ’S, FOOD FOR
THOUGHT FOR THE SAME”
FAQ’S
A.
If
Company doesn’t reply ROC Notice what are the consequences of same?
I.
Whether ROC can strike off the status of Company?
As per Notice of ROC u/s 248(1),
this notice is first step toward struck off of Company. If Company fails to
reply such notice within 30 days of publication of notice (i.e. 17th
July, 2018 in case of publication of Delhi ROC) ROC shall struck off the name
of Company in its records.
II.
Whether Director shall be disqualified?
As per Section 164(2) if a
company fails to file its Financial Statement or Annual Return for continuous 3
financial years, in such case Directors shall be disqualified.
In this case, if Company has
fails to file financial statement and annual return for continue 3 financial
year then directors shall be disqualified, if default is only for 2 years then
directors shall not be disqualified.
III.
Personal Liability Director/ Manager/ Officer/ Members.
As per Section 248(&) “The liability, if any, of every
director, manager or other officer who was exercising any power of management,
and of every member of the company dissolved under sub-section (5), shall
continue and may be enforced diveshas if the company had not been dissolved”
In general words, liability of
Directors, manager, other officers and Members of the Company shall be continue
even after struck off of Company.
Hence, one can opine that they
shall be personally liable for all the statutory and other liabilities of the
Company. (Eg. Statutory liability like:
Payment of Roc Fees, payment of income tax liability, penalty for non filing of
financial statements and annual returns etc.)
IV.
Cessation of Bank Account of Company?
If a Company struck off in the
record of ROC. Then ROC simultaneously send letter to Banks for cessation of
Bank account of Company in the entire Bank. “Earlier when roc struck off approx
2.5 lakh companies has taken the same action’
V.
Companies shall not be able to carry on business, sale/
purchase any assets, bank transactions.
If a Company once struck off in
the record of ROC, then such Company:
·
Can’t conduct any business activity in the
Company. Company can’t carry on business. (i) Because due to cessation of Bank
account they can’t do any transactions. (ii) As Company struck off promoters
can’t sign any diveshinvoice or other documents on behalf of the Company.
·
If Company having any assets then Company
can’t sell / lease such property. Because Company can’t accept any amount from
such transaction due to cessation of Bank Account.
B.
What
shall be impact of disqualification of Director on other companies in which
they are continuing as Directors?
Detailed
answer of this question has been already covered in the below mentioned
article. (In simple word disqualified director automatically vacant office from
all other companies)
C.
Everything
about provision of Disqualification of Director?
Detailed
answer about disqualification of director covering section 164 and 167 can be
read on the below mentioned link:
D.
Whether
directors of the Company could be personally liable for non compliance like non
filing of financial statement or annual return after strike off of Company?
As per Section 166 Director have
to adhere the duties mentioned in such section. He has to work in best interest
of Company, employee, shareholders, community etc. If directors fail to file
Annual forms as an officer in default they shall be liable for the penalties/
prosecution. In case company got struck off they shall be personally liable for
such statutory liabilities.
E.
Whether
Company can be strike off without completion of annual filing.
As
per section 560 of the Companies Act, 1956, Registrar of Companies may strike
off the name of companies on satisfying the conditions therein. As per Section
560, a company desirous of getting its name struck off has to apply to
Registrar of companies in e-form 61. All pending statutory returns are
required to be filed along with e-form 61.
In
order to give an opportunity for fast track exit by a defunct company, for
getting its name struck off from the register of companies the Ministry has
decided to modify the existing route through e-form – 61 and has diveshprescribed the
new Guidelines. The Guidelines for “Fast Track Exit mode” for defunct
companies.
Therefore,
from the above provisions it is clear that before 7th June, 2011 (FTE
Scheme) if company desired to go for strike off it was mandatory to file all
pending statutory returns (Annual Filing Form). But then w.e.f. 7th June,
2011 by FTE scheme a company can go for Fast Track Exit without completion
of diveshpending statutory returns, even a dormant company could apply for FTE as
discussed in above question.
Latest
Provisions: In the latest provisions of Section 248 and in respective rules
language are same as was in section 560 of Companies Act, 1956. Section 248
states the provisions of strike off of the Company not for Fast Track Exit of
the Company.
One can interpret
that if a Company wants to apply for Strike off u/s 248 first it has to file
all the pending statutory returns.
Difference between FTE Scheme, 2011 and Companies Strike Off
u/s 248
S. No.
|
Particulars
|
Provisions under FTE Scheme
|
Provisions under Section 248 of
Companies Act, 2013 along with rules.
|
1.
|
Link for Circular/ Rules
|
||
2.
|
Not Carrying Business & Activity
|
Is not carrying over any business
activity or operation for last one year before making application under FTE.
|
not carrying on any business or
operation for a period of two immediately preceding financial years
|
3.
|
Dormant Company
|
Any defunct company identified as
dormant by the MCA, may apply for
getting its name strike off
|
There are no such Provisions in
Section 248.
|
4.
|
Completion of Pending Statutory
Return
|
Not- required to file pending
statutory returns before apply for Strike Off.
|
Required to file pending statutory
before apply for Strike Off.
|
(Author – CS Divesh Goyal, GOYAL DIVESH &
ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at csdiveshgoyal@gmail.com)
Disclaimer:
The
entire contents of this document have been prepared on the basis of relevant
provisions and as per the information existing at the time of the preparation.
Although care has been taken to ensure the accuracy, completeness and
reliability of the information provided, I assume no responsibility therefore.
Users of this information are expected to refer to the relevant existing
provisions of applicable Laws. The user of the information agrees that the
information is not a professional advice and is subject to change without
notice. I assume no responsibility for the consequences of use of such
information. IN NO EVENT SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT,
SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION WITH
THE USE OF THE INFORMATION.
suppose in case directors of do not want the struck off of pvt company, but directors want to withdraw funds held in the bank account. is there any legal way out?
ReplyDeletego for voluntarily winding up
DeleteIf company has not done any filing from last 8 to 10 years and we filed for strike off but ROC is asking for filing is there any way out?
ReplyDeleteROC have to ask for completion of filing as per section 248. there is no exemptions from annual filings.
Deletecompany has strike off, the company does not have any business last 10 years, company does not have bank ac and pan.. can any alternative other than nclt?
ReplyDeleteGreat share!
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