RoC Strikes Off Private Limited for Non-Compliance with Section 10A

The Ministry of Corporate Affairs (MCA), through the Office of the Registrar of Companies (RoC), Pune, has recently taken stringent action against a Private Limited by striking off its name from the Register of Companies. The action was taken under Section 248(1)(a) of the Companies Act, 2013, owing to the company's failure to comply with Section 10A, which mandates the filing of a declaration of commencement of business.

This development is a strong reminder for new companies and professionals to follow all legal requirements on time, especially right after incorporation.

Legal Framework: Section 10A of the Companies Act, 2013

Section 10A was inserted into the Companies Act, 2013, through the Companies (Amendment) Act, 2019 and became effective from 2nd November 2018. It applies to all companies incorporated on or after the date of its enforcement.

As per Section 10A:

A company incorporated after 2nd November 2018 and having a share capital shall not commence any business or exercise any borrowing powers unless—

(a) A declaration is filed by a director within 180 days of the date of incorporation in Form INC-20A, confirming that every subscriber to the memorandum has paid the value of the shares agreed to be taken by him;

(b) The company has filed with the Registrar a verification of its registered office in Form INC-22, if not already done at the time of incorporation.

Failure to comply with Section 10A leads to penalties and, more critically, enables the RoC to initiate strike-off proceedings under Section 248(1)(a).

What Happened: RoC’s Observation and Action

According to the RoC order, Vasuki Infrastructure Private Limited was incorporated on November 26, 2020, and was issued a Corporate Identity Number (CIN) along with its certificate of incorporation by the RoC, Pune. However, the company failed to file Form INC-20A, the mandatory declaration of commencement of business, within the 180-day deadline.

Even after incorporation, the company did not complete any further legal formalities. It did not show proof of receiving share subscription money from its shareholders or starting any business operations. Due to this non-compliance, the company was marked as inactive.

Non-Response to Notice

In accordance with the legal provisions, the RoC issued a notice in Form STK-1, inviting the company to furnish any objection or representation regarding the proposed strike-off. However, no response or documentation was received from Vasuki Infrastructure Pvt. Ltd.

This non-compliance and lack of communication led the RoC to proceed with the strike-off action, effectively removing the company’s name from the official register and rendering it dissolved.

Consequences of Strike-Off Under Section 248(1)(a)

Section 248(1)(a) empowers the Registrar to strike off the name of a company from the Register of Companies if:

"A company has failed to commence its business within one year of its incorporation."

Although Vasuki Infrastructure Pvt. Ltd. had a 180-day deadline under Section 10A, the RoC proceeded under the broader timeline of one year under Section 248(1)(a), indicating no commencement of business took place at all during this period.

The consequences of strike-off include:

Dissolution of the company, effectively ceasing its legal existence
Freezing of bank accounts and assets, if any
Inability to enter into or enforce contracts, as the company ceases to exist in the eyes of the law
Ongoing liabilities of directors/officers remain enforceable, as specifically highlighted in the RoC order

Impact on Directors and Promoters

One of the most important aspects emphasised by the RoC in this case was that the liabilities of directors, officers, and others in charge are not extinguished upon strike-off. This is in accordance with Section 248(7) of the Companies Act, 2013, which states:

"The removal of the name of the company from the register of companies shall not affect the liability of the company and its directors and other officers who were responsible for the company."

In essence, even though the company is dissolved, the directors can still be held accountable for any violations, penalties, or liabilities incurred before the strike-off.

Option for Revival: Section 252 Appeal to NCLT

A company that has been struck off under Section 248 may seek relief by approaching the National Company Law Tribunal (NCLT) under Section 252 of the Act. The application for revival can be filed:

By the company itself, any member, creditor, or workman
Within three years from the date of strike-off
To succeed, the applicant must demonstrate that:
The company was carrying on business or operation at the time of strike-off
Or that it is just and equitable to restore the name of the company

In the case of Vasuki Infrastructure Pvt. Ltd., revival would require providing conclusive evidence of intent to do business, proof of share subscription received, and justification for the original non-compliance.

Compliance Lessons for Start-Ups and New Companies

This case serves as an important compliance alert for promoters, directors, and compliance professionals. While incorporation of a company has been made easier through digital initiatives, post-incorporation compliance is critical to sustain legal existence.

Key compliance requirements after incorporation include:

Filing of Form INC-20A within 180 days
Verification of Registered Office in Form INC-22
Appointment of Auditor within 30 days (Form ADT-1)
Opening a bank account, receiving subscription money, and maintaining statutory registers
Holding first Board Meeting within 30 days

Failure to comply with these requirements may result not only in penalties but also in cancellation of corporate status by the Registrar.

Conclusion

The strike-off of Vasuki Infrastructure Pvt. Ltd. highlights the seriousness with which the RoC enforces Section 10A and underscores the importance of compliance with initial statutory requirements. For company promoters and stakeholders, this case acts as a reminder that incorporation is just the beginning of corporate legal responsibilities.

In a compliance-driven regime, corporate negligence, even in the early stages, can have irreversible consequences, including dissolution. It is therefore imperative that new companies, along with their advisors and consultants, prioritise and monitor post-

Stay Compliant from Day One

Maintaining a compliance checklist is essential for every newly incorporated company.

Timely actions like filing Form INC-20A, verifying your registered office, and appointing an auditor are not just formalities—they’re critical for protecting your company’s legal status. At IndiaFilings, our experts help you stay on track by guiding you through each compliance step and automating reminders for key deadlines.

If your company has already been struck off for non-compliance under Section 10A, don’t worry—we can assist with revival petitions under Section 252 and restore your business.

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