Companies (Removal of Names of Companies from Register of Companies) Second Amendment Rules, 2023

Recent Amendments and Provisions for Removing Company Names from the Register

• Section 248 of the Companies Act of 2013 empowers the Registrar to remove the company name from the register of companies under specific circumstances listed in the provision.
• Recently, on April 17, 2023, the MCA issued the Companies (Removal of Names of Companies from the Register of Companies) Amendment Rules, 2023, which introduced significant changes to the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2023. These changes pertain to the application process for removing a company's name from the register of companies.

Companies (Removal of Names of Companies from Register of Companies) Second Amendment Rules, 2023

• Rule 4 relates to "Application for removal of the name of the company," which says that an application for removal of the name of a company under Section 248(2) will be made to the Registrar, Centre for Processing Accelerated Corporate Exit in Form No. STK-2 along with a fee of Rs. 10000. 2. New Provisions have been inserted regarding the same:
• The Company must file all overdue financial statements and annual returns by the end of the financial year when it ceased its business operations... 
• Where the Registrar's action has already been initiated against the Company, it can only apply for the removal of names after filing pending financial statements and annual returns.
• A Company will not be allowed to apply for the removal of names once the Registrar has issued notice for publication.

Requirements before submitting a Form SKT-2 - Voluntarily Removing Company Name

Submission of Overdue Financial Statements and Annual Returns:

Pending Financial Statements and Annual Returns:

• The Company did not initiate its business activities within one year of its incorporation,
• The Company did not conduct any business during the two immediately preceding financial years,
• Its subscribers failed to fulfill their subscription payments.

Prohibition after Registrar Strikes Off:

Process for removing a company's name from the register of companies

• Ensure Compliance: Make sure to submit all pending financial statements and annual returns until the conclusion of the financial year in which the Company is prohibited from carrying out its business operations.
• Application Submission: Submit a removal application to the Registrar of Companies (RoC), including necessary documents like financial statements, board resolutions, and consent letters from directors.
• Public Notice: The RoC publishes a notice on its website and in newspapers, inviting objections or representations from the public within a specified period, usually 30 days.
• Objection Period: During this time, anyone can raise objections by submitting written objections and supporting documents to the RoC.
• Registrar's Decision: The RoC evaluates the application and objections, deciding whether the Company's name should be removed from the register. Additional information may be requested from the Company if needed.
• Removal Order: If approved, the RoC issues a removal order specifying the effective date of removal, usually 30 days from the order.
• Publication of Removal: The Registrar of Companies (RoC) issues an official notice in the Official Gazette, formally declaring that the company name has been removed from the register of companies.

RENU SURESH Expert

Updated on: June 2nd, 2023