There
are many companies that are incorporated under Companies Act 2013 and
consequently it is mandatory to follow its legal compliances as well. But there
are times when business becomes inoperative or defunct during the course of running
such business due to one or the other reason or has been inoperative since its
incorporation. Non-fulfilment of legal compliances within the time prescribed
attracts numerous fines and penalties, including prohibition imposed on the
directors from starting another company.
It
is preferable to close or wind up such company to ensure both cost and time
saving by following certain set of legal procedures as prescribed by The
Ministry of Corporate Affairs. In order to ease such complex procedure of
winding up of company, Ministry has decided to modify the existing route by
launching new rules viz. Removal of Names of Companies from the Register of
Companies, Rules 2016 applicable from date of publication in the Official
Gazette for easy closure of Private Limited or One Person Company with less
legal formalities.
It
usually takes 25 to 30 days to wind up an inoperative/defunct company and get
its name struck off from Register of Companies maintained by Registrar of
Companies. Forms which shall be filed for the purpose of Winding up or Closure
of Companies shall be certified by a Chartered Accountant in whole time
practice or Company Secretary in whole time Practice or Cost Accountant in
whole time practice, as the case may be.
For
removal of names of companies from the Register of Companies, following set of
conditions must be satisfied –
1. the
company has failed to commence its business within one year of its
incorporation; or
2. the
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; or
3. the
company has filed an application under sub-section (2) of section 248 for
removing the name from the register of companies on the grounds mentioned in
sub-section (1) of section 248.
Section
248 (2) – Power of Registrar to remove name of company from register of
companies
Without
prejudice to the provisions of sub-section (1), a company may, after extinguishing
all its liabilities, by a special resolution or consent of seventy-five per
cent 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 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:
Provided
that in the case of a company regulated under a special Act, approval of the regulatory
body constituted or established under that Act shall also be obtained and
enclosed with the application.
Section
249 (1) – Restrictions on making application under section 248 in certain
situations
An
application under sub-section (2) of section 248 on behalf of a company shall
not be made if, at any time in the previous three months, the company—
(a)
has changed its name or shifted its registered office from one State to
another;
(b)
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 or otherwise carrying on of
business;
(c)
has engaged in any other activity except the one which is necessary or
expedient for the purpose of making an application under that section, or
deciding whether to do so or concluding the affairs of the company, or
complying with any statutory requirement;
(d)
has made an application to the Tribunal for the sanctioning of a compromise or
arrangement and the matter has not been finally concluded; or
(e)
is being wound up under Chapter XX, whether voluntarily or by the Tribunal.
Following
categories of companies shall not be removed from the register of Companies under
this rule –
1. listed
companies;
2. companies
that have been delisted due to non-compliance of listing regulations or listing
agreement or any other statutory laws;
3. vanishing
companies*;
4. 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;
5. companies
where notices under section 234 of the Companies Act, 1956 (1 of 1956) or
section 206 or section 207 of the Act 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;
6. companies
against which any prosecution for an offence is pending in any court;
7. 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;
8. companies,
which have accepted public deposits which are either outstanding or the company
is in default in repayment of the same;
9. companies
having charges which are pending for satisfaction; and
10. Companies
registered under section 25 of the Companies Act, 1956 or section 8 of the Act.
Any
application or pending proceeding for striking off or Form-FTE filed with the
Registrar of Companies prior to the commencement of these rules but not
disposed of by such authority for want of any information or document shall, on
its submission, to the satisfaction of the authority, be disposed of in
accordance with the rules made under the Companies Act, 1956 (1 of 1956).
*
“Vanishing Company” means a company, registered under
the Act or previous company law or any other law for the time being in force
and listed with Stock Exchange which has failed to file its returns with the
Registrar of Companies and Stock Exchange for a consecutive period of two
years, and is not maintaining its registered office at the address notified
with the Registrar of Companies or Stock Exchange and none of its directors are
traceable.
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Some recent updates that you would not like to miss
–
1. In case of continuous supply of
services, the time of supply shall be the
due date of payment, if ascertainable from the contract. If
not ascertainable, it will be earliest of date of receipt of payment or
the date of issue of invoice or completion of event where payment is
linked to completion of event.
2.
Input Tax
Credit can be taken up to the month of September of the following Financial Year
to which invoice pertains or date of filing of annual return, whichever is
earlier.
3.
GST council is likely to retain a
clause in the law that will require service providers to register in every
state where they operate, despite recent representations.
4.
If payments are made after three
months of the date of the invoice of the supplier then the proposed GST
Legislation appears to deny tax credit in relation to input services for such
payments.
5. The government has asked all
banks to provide mobile banking facility to all customers by March
31 in a bid to push digital transactions.
6. Due Date for E-payment of
Service tax for the month of February by
Companies: 06.03.2017 and Payment of
TDS/TCS deducted/collected in February: 07.03.2017.
7.
100% penalty shall be imposed on
person accepting cash for more than Rs.3,00,000/- for accepting it. No such
penalty shall be imposed on cash payer.
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