REPLY– ROC Notice – U/S 248 - Series 354


ACTION – 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.

According to the ROC, the Companies which have not filed financial statement for a period of two immediately preceding financial year are non-working/ non-operational Company.

The main thrust of this editorial is “What should be reply of ROC Notice?”, “Points to be analyze before reply to ROC Notice”, “What is the implication of non reply of ROC Notice?”

Points to be analyzed Before-
Reply to ROC Notice?
The Companies which have not filed their Financial Statement (AOC-4 / 23AC, ACA) or Annual Return (MGT-7) for a period of two immediately preceding financial year shall receive the Notice in form STK-5. Before filing of reply to ROC Notice, following points required to be analyzed by the Company.
        i.            Whether Company has filed the financial statement or Annual Return or not?
      ii.            Whether there is any business/ operations in the Company or not?
    iii.            Whether promoters want to continue the Company or want to Strike off?


How to Reply – ROC Notice?
After analyzing of above mentioned question, let’s discuss how to reply the NOC Notice.
        i.            Whether Company has filed the financial statement or Annual Return or not?
Generally, ROC has issued notice to only those companies, who have not filed their Financial Statement or Annual return for preceding two financial years. Therefore, we can opine that all such companies have not filed their forms.
  
                    ii.            Whether there is any business or operation in the Company?
First promoters have to analyze that whether Company having any business or operations or not, this is crucial point for reply to ROC Notice. Because,

          i.            If Company is having business or continue carrying on business. Promoters have to prove the same to ROC that our Company is operational Company.
{in this case, Before reply to ROC, complete the annual filing of the Company and then reply to ROC that, our Company is working Company and our company inadvertently fails to file Financial Statement and Annual Return.  Which we have filed with additional fees (copy of challan is attached).}

        ii.            If Company is not having any business then question will arise that, whether promoters want to continue the Company or strike off the Company.
Whether Promoters want to continue the Company?
{in this case, Before reply to ROC, complete the annual filing of the Company and then reply to ROC that, our Company is working company, however there are not revenue or profit in our company still we are trying for business in future and our company inadvertently fails to file Financial Statement and Annual Return.  Which we have filed with additional fees (copy of challan is attached).}

Whether Promoters Doesn’t want to continue the Company?
In this case following shall be process:
FIRST: Complete the Annual Filing of Company (by filing of AOC-4 and MGT-7 with ROC by paying additional fees).

SECOND: File e-form STK-2 for strike off of Company with the relevant attachments. Complete process of strike off of Company shall available on below mentioned link:

THIRD: Reply to ROC, that we have completed our pending annual filing with additional fees, Company don’t want to continue and e-form STK-2 has been filed for strike off of Company. (attached copy of all the challans of annual filing forms and STK-2)

What is the implication of non reply of ROC Notice?
Most important, if company doesn’t reply to ROC notice then what shall be implication of such on Company?

In short following below mentioned shall be implication on the Company:
          i.            Name of Company shall be removed from the record of ROC.
        ii.            Bank account of Company shall be ceased.
      iii.            Directors of Company shall be disqualified.
      iv.            DIN of Directors shall be ceased.
        v.            Directors shall not be allowed to continue as directors in other companies.
      vi.            Directors shall be personally liable for all the statutory and other liabilities of Company.
    vii.            Directors shall be liable for penalties, punishment or prosecution for non-compliances under the Act.
Conclusion:
Therefore, after reading above mentioned editorial it can be opine that, Best way to reply of ROC notice is depend upon one thing i.e. “Whether Company wants to continue the Business or wants to strike off the Company”.
 (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.



Comments

  1. Why will the directors be disqualified if no reply is given for the notice?

    ReplyDelete
    Replies
    1. because company is in default of filing of financial statement or annual return from last 2 financial year therefore as per section 164(2) directors shall be disqualified.

      Delete
    2. Default arises when the non compliance continues for 3 years. Before that how can ROC disqualify a director?

      Delete
  2. I guess the directors will face action under the law, can they go for compounding?

    ReplyDelete
    Replies
    1. there is no compounding provisions for the default u/s 164(2)

      Delete
  3. As per me... If business is not carried on for two years to those stk5 has been issued.... And those company who have not filed annual return or filing not done for two years will not be disqualified

    ReplyDelete
    Replies
    1. As per Section 164(2) if Any company whether working or not fails to file Annual Return or Financial statement their directors shall be disqualified. As the same actions MCA has already been taken against approx 300000 directors

      Delete
  4. Dear Sir,
    In case a Company incorporated in june,2014. We have filed all pending annual filing for FY 2014-15, 2015-16, 2016-17 on 29.03.2018 still we have received notice of STK-1 (STRIKE OFF) on May 2018.
    How to reply to Roc notice? Please Advice.
    Thanks
    Amit

    ReplyDelete

Post a Comment

Popular posts from this blog

Declaration of Commencement of Business - Series 487

Vacancy Updates (Through Google Form) | Dated: 20-August-2020

Process of Conversion of Loan into Equity