Removal of Company Name from MCA Database

A company name can be removed from the MCA database or struck-off by the Registrar of Companies on certain conditions. In this article, we look at the procedure for removal or striking of company name from the MCA database.

Striking by Registrar

The Registrar of Companies can remove or strike-off a company name, if he/she has reasonable cause to believe:

1. a company has failed to commence its business within one year of its incorporation; or
2. the subscribers to the memorandum have not paid the subscription within 180 days from the incorporation of the company and a declaration to that effect has not yet been filed; or
3. a company has not been carrying on any business or operation for a period of two year immediately prior financial years and has not made any application within such period for the reason of availing the status of a dormant company.

In the notice, the Registrar will request the company and its directors to send their representations along with copies of pertinent documents.

On receiving the notice, the company by special resolution or consent of 75% of the shareholders in terms of paid-up share capital can file a reason for removal for company name from the register of companies. On the receipt of application, the Registrar will cause a public notice to be issued.

Notice for Striking-Off

The notice issued for striking off will be published in the Official Gazette for the information of the general public. At expiry of the time mentioned in the notice, the Registrar would remove remove the company name from the register of companies and publish a notice in Official Gazette. On the publication in the Official Gazette of this notice, the company would stand dissolved. 

Even if a company is dissolved as mentioned above, The Tribunal will still have power to wind up a company, the name of which has been struck off from the register of companies.

Restriction on Application for Striking-Off

An application for the removal of name on behalf of a company will not be made if at any time in preceding three month, the company has:

• Changed its name or shifted its registered office from one Indian State to another;
• Made a disposal for value for the property or right held by it for the purpose of disposal for gain during the normal course of trading or otherwise carrying on of business;
• Engaged in any other activity apart from the one which is essential or expedient for the purpose of:
  • making an application, or
  • deciding if to make application, or
  • concluding the affairs of the company, or
  • meet the terms with any statutory requirement;
• made an application to the Tribunal for the approval of a compromise or arrangement and the matter has not be at last concluded
• company been wound up under Chapter XX, if voluntarily or by the Tribunal.

If company files an application for removal of name in violation, it will be punishable with fine that may extend to Rs. one lakh rupees.

Learn more about winding-up of private limited company.