NEW DELHI: The government has struck off the names of 2,09,032 companies from the Register of Companies and since these companies have ceased to exist, action has been initiated to restrict the operation of their bank accounts.
In addition to such struck-off companies, banks have been advised to go in for enhanced diligence while dealing with companies in general. The Department of Financial Services has, through the Indian Banks’ Association, advised all banks that they should take immediate steps to put restrictions on bank accounts of such struck-off companies.
The decisive action has been taken under the provisions of Section 248 of the Companies Act.
According to a statement from the finance ministry, even companies having an ‘active’ status on the website of the Ministry of Corporate Affairs but defaulted in filing of its due Financial Statement(s) or Annual Return(s) of Particular of Charges on its assets on the secured loan should be seen with suspicion.
This is because companies that don’t comply with their statutory obligations to make such vital information available for stakeholders may be deemed ‘inactive’.
The existing directors and authorised signatories of the struck-off companies will now become ex-directors or ex-authorized signatories, according to the finance ministry. These individuals will, therefore, not be able to operate bank accounts of such companies till such firms are legally restored under Section 252 of the Companies Act by an order of the National Company Law Tribunal.
The restoration, as and when it happens, shall be reflected by change in the status of the company from ‘struck-off’ to ‘active’.
A list of such firms have been put on the website of the Ministry of Corporate Affairs.
Section 248 (5)regulation
Section 248 (5) gives the corporate affairs ministry the power to remove the name of a company from the Registrar of Companies under certain conditions.
These are as follows:
If the company has failed to commence its business within one year of incorporation; the subscribers to the memorandum have not paid the subscription which they had undertaken to pay within a period of 180 days from the date of incorporation of a company.
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 of the Companies Act.