The power of registrar to remove the name of the company from the register of Companies. He can do so on his own or he can do after receiving an application from the company. So let us see the requirements under both cases which are as follows:
1) Removal of name of the company from the register of companies by the registrar by its own decision
- The registrar is empowered to send a notice to the company and all its directors, of his intention to remove the name of the company from the register of companies, if the registrar has a reasonable reason or cause to believe that-
- A company who has failed to commence its business within 1 year of its incorporation; or
- A company is not carrying on any business or operation for a period of 2 immediately preceding financial years and has not made any application within such period for obtaining the status of the dormant company; or
- The subscriber to the memorandum has not paid the subscription which they had undertaken to pay at the time of incorporation of a company and a declaration to this effect has not been filed within 180 days of its incorporation; or
- The company is not carrying on any business operations, as revealed after the physical verification carried out by the registrar.
- The notice sent by the registrar shall require the company and its directors to send their representations along with the copies of the relevant documents, if any, within a span or period of 30 days from the date of such notice.
2) Removal of name of the company from the register of companies by the Registrar on an application by the company
- A company may file an application to the registrar for removing its name from the register of companies on any of the grounds which are as follows:
- It has not commenced its business within one year of its incorporation.
- It is not carrying on any business or operation for a period of 2 immediately preceding financial years as it has not made any application within such a period for getting or obtaining the status of a dormant company.
- Such an application may be filed only if before making such an application, the company has extinguished its liabilities.
- Such an application may be filed only if the company is authorized by a special resolution or consent of members holding 75% paid-up share capital.
- In case the company is regulated under a special Act, e approval of the regulatory body established under the Act shall also be obtained and enclosed with the application.
- In the case of the company registered under Section 8, the provisions relating to the removal of the name of the company on an application made to the registrar shall not apply.
Consequences of removal of the name of the company from the register of companies:
Even where the name of a company is removed from the register of companies and the company stand dissolved
- The Assets of the company shall be made available for payment or discharge of all its liabilities and obligations;
- The liability, if any, of every director, manager or other officers who were exercising in any power of management, shall continue and may be enforced against him;
- The liability of every member of the company shall continue and may be enforced against him;
- The Tribunal shall be empowered to wind up such a company.