POWER OF REGISTRAR TO REMOVE THE NAME OF THE COMPANY FROM REGISTER OF COMPANIES UNDER SECTION 248 OF COMPANIES ACT 2013

 BY SUSHMA GOWDA

Power of registrar to remove the name of the company from register of companies (Section 248 of companies act, 2013)

1) Where the register has reasonable cause to believe that:

1. a) a company has failed to commence its business within one year of its incorporation
2. 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 section 455, he shall send notice to the company and all the directors of the company, of his intention to remove the name of the company from the register of companies and requesting them to send their representations along with copies of the relevant documents, if any, within a period of thirty days from the date of the notice.

2) Without prejudice to the provision of sub-section (1), a company may, after extinguishing all its liabilities, by a special resolution or consent of 75% members in term of paid-up share capital, file an application in the prescribed manner to the register of companies on all or any of the ground specified in sub-section(1) and the registrar shall, on receipt of such application, cause a public notice to be issued in the prescribed manner.

3) Nothing in sub-section (2) shall apply to a company registered under section 8.

4) A notice issued under sub-section (1) or Sub-section (2) shall be published in the prescribed manner and also in the official gazette for the information of the general public.

5) At the Expiry of the time mentioned in the notice, the registrar may, unless cause to the contrary is shown by the company, strike off its name from the registrar of companies and shall be publish notice thereof in the official gazette and on the publication in the official gazette of this notice, the company shall stand dissolved.

6) The Registrar, before passing an order under sub-section (5), shall satisfy himself provision has been made for the realization of all amount due to the company and for the payment or discharge of its liabilities and obligations by the company within a reasonable time and if necessary, obtain necessary undertakings from the managing director, director or other persons in charge of the management of the company.

7) 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 as if the company had not been dissolved.

8) Nothing in this section shall affect the power of the tribunal to wind up a company the name of which has been struck off from the register of companies.

According to Section 248(7), the striking-off the name of a company does not materially affect the creditors of the company because such creditors may enforce their claims against every director or other officer of the company and against every member of the company as if the name of the company had not been struck-off.