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General Circular No: 02/2005
Dated the 28th January 2005 To All RDs All ROCs Subject: STRIKING
OFF NAMES OF DEFUNCT COMPANIES Sir, The matter regarding
striking off/removal of the names of the defunct companies from the Register of
Companies has been considered by the Ministry of Company Affairs. In the past
simplified guidelines had been conveyed to Registrars of Companies (ROCS)
through (i) circular nos.9/7/83-CL.III
dated 17.2.1987 and 1/3/91-CL.V; 5/4/91-CL.III dated 19.2.1991 (ii) “The Fast
Track Section 560 Scheme of year 2000” and (iii) “The Simplified Exit Scheme”
introduced during 25.3.2003 to 31.3.2004 to operationalise the provisions of
Section 560 to enable the ROCs to weed out the defunct companies. 2. Now,
it has been decided to launch a fresh scheme to enable defunct companies
to get their names struck off from the Register of Companies u/s 560 of the
Companies Act, 1956 through the operation of the Scheme called “Simplified Exit
Scheme, 2005” (SES 2005) [The “Scheme”].
In supercession of all earlier circulars and schemes, the Ministry
issues the following directions for striking off names of defunct companies
from the Register of Companies under section 560 of the Companies Act,
1956. OPERATION OF THE SCHEME 3. The
SES 2005 will come into operation on 1.2.2005 and will continue till 31.7.2005. WHO CAN APPLY 4. (i)
All defunct companies which are registered under the Companies Act, 1956 can
apply under this Circular, except
Section 25 Companies, subject to fulfillment of conditions laid down
hereinafter. (ii) More particularly, the
following companies are eligible to apply under this Scheme:_ (a) Companies that did not carry out any business at any time; (b) Companies that carried out some business
activity but discontinued the same thereafter; Provided that in the case of
a Non Banking Financial Company (NBFC) as defined under section 45-I(f) of RBI Act, 1934:- (a)if such NBFC is not
registered with the RBI, it will be
allowed to avail of this scheme only if it has not carried out any operation or
commercial activity since its incorporation; (b)if such NBFC is registered
with RBI, it will be allowed to avail of this
scheme if no objection from RBI to their availing the exit option under
the Scheme is obtained and enclosed alongwith the application. Provided further that in
case of a Collective Investment Management Company as defined in regulation
2(1)(h) of SEBI (Collective Investment Companies) Regulations, 1999:- (a)if such Collective
Investment Management Company is not
registered with the SEBI, it will be
allowed to avail of this scheme only if it has not carried out any operation or
commercial activity since its incorporation; (b)if such Collective
Investment Management Company is registered with SEBI, it will be allowed to
avail of this scheme if no objection
from SEBI to their availing the exit option under the Scheme is obtained and
enclosed alongwith the application. (iii) Government Companies, which have no assets and liabilities may also
apply for strike off/removal of name under this Scheme provided they comply
with the other prescribed requirements and submit an approval letter issued by
the concerned administrative ministry. PROCEDURE AND DOCUMENTS REQUIRED How to
apply 5. (i) A company desirous of getting its name
struck off under this scheme can apply to the Registrar of Companies concerned
in the form prescribed and enclosed in Annexure ‘A’. (ii) If a
validly constituted Board of the Company is in existence, the application
should be supported by a Board resolution to exit from the Register of
Companies. (iii) The
application should be signed by two directors of the company which will include
Managing Director or Whole Time Director, if there is one. (iv) In case
of companies where the number of directors is reduced below the quorum fixed by
the Act for a meeting of the Board, the continuing directors or director may
act for the purpose of increasing the number of directors to that fixed for the
quorum in terms of regulation 75 of Table A of Schedule I to the Companies Act,
1956 or as per the relevant articles of association of the company. (v) The
foreign nationals and Non Resident Indians (NRIs) may also apply adhering to
the procedure laid down in section 558 of the Companies Act, 1956. AFFIDAVIT AND INDEMNITY 6 (i) The
application should be accompanied by an affidavit by the Applicants as
mentioned in para 5(1) above sworn
before a Magistrate/Executive Magistrate/Oath Commissioner/Notary, to the
effect that the company has not carried on any business or the company did some
business for a period upto a date (which should be specified) and then discontinued its operations, as the
case may be, and has no assets or
liabilities. The draft of the Affidavit is as per draft prescribed and enclosed
at Annex ‘B’ to this Circular. (ii)
The application should further be accompanied by an Indemnity Bond, duly
notarized as per draft prescribed and enclosed in Annex ‘C’ to this Circular,
to the effect that should there be any liabilities on the company, such
liabilities will be met in full by the applicants, even after the name of the
company is struck off the register of the companies. Such applicants will be
liable jointly as well as severally. ACCOUNTS 7 (a) In case of companies which have not
carried out any operations, business or
commercial activity since their incorporation and have no financial information
to furnish, a declaration by
Applicants in the affidavit itself that the company has no assets and
liabilities shall be sufficient and there shall be no need to attach separate
audited financial statements. If however, such companies have been filing
regular financial statements, they should file the financial statement for the latest year
prepared upto a period which ended one month preceding the date of application. (b)
Companies which discontinued their operations after having carried out
the same for some period, should file audited financial statements under the
Companies Act, 1956 for the period upto
which they carried on business provided such period is of one accounting year
or more. For subsequent period, a
Statement of Account as per format prescribed at Annex D of this Circular, for
the latest year prepared upto a period which ended one month preceding the date
of application should be enclosed. Where the period of operation is less than
one accounting year, a Statement of Account, as prescribed at Annex D shall
suffice. The Applicants
shall also give a declaration that the “Statement of Account” so submitted
gives true and fair view of company’s financial position specifying the reasons
for non submission of audited financial statements. However if
companies wish to voluntarily file the regular audited financial statement even
for the subsequent period, they may do so. For the
purposes of this Circular, the expression “Financial Statements” means balance
sheet and profit and loss account required to be maintained as per provisions
of section 211 of the Companies Act, 1956. 8. A
company shall not be allowed to avail of this scheme in case any prosecution
for a non-compoundable offence is pending against the company. The company
shall declare pending litigations, if any, involving the company while applying
under this Scheme. However, in respect
of companies which are involved in compoundable offences under the Companies
Act, 1956, the company will be allowed to avail of the scheme only if the
company files a compounding application first and then applies under this scheme. 9. The
purpose of the Scheme is to allow eligible companies to avail of this
opportunity to exit from the Register of Companies after fulfilling the
requirements laid down in this Circular. No penal action would be initiated
against eligible companies availing this Scheme from the date of filing of the
application for simplified exit. After the Scheme ends, the Ministry would take
necessary penal action under the Companies Act, 1956 against such defunct
companies which have not availed of this opportunity and have not complied with
the provisions of the Companies Act, 1956 or are not filing documents with ROCs
in a timely manner. 10. The applicant company under this Scheme
would be deemed to be struck off from Register of Companies from the date of
issue of Order/Notification by the ROC. 11.
An application shall be accompanied with a fee of Rs. 3000. Yours faithfully, (B.L. Sinha) Joint Director (R) APPLICATION
FORM FOR STRIKING OF NAME OF COMPANY UNDER SECTION 560 OF THE COMPANIES ACT,
1956 Affix PP size Photo Affix PP size Photo No.
of Company Name
of the Company: Address of the Company:: To The Registrar of Companies, --------------- (Name of the State) Sir, The
Company after carefully considering all aspects has duly resolved in the Board
meeting held on___________ to make an application for striking the name of our
company off the Register u/s 560 of the Companies Act, 1956. We, the directors of the company
make an application for striking the name of our company off the Register u/s
560 of the Companies Act, 1956. (2) I/We furnish the following details and documents for considering
my/our application. (i) Audited Financial Statements
for the year ending _____ showing no assets and liabilities. Or (ii) A Statement of Account
for the period from _____ to ______
being the latest period applicable for the company. It is declared that due to
__________________________________________________________________ _____________ (give here
reasons) the Balance Sheet and Profit and Loss Account can not be prepared,
hence a Statement of Accounts is submitted. (ii) Affidavits as per Annexure B of this Circular
No. 17/78/2001-CL.V dated 28-01-2005
of M/o Company Affairs. (iii) Indemnity Bonds as per Annexure C of the
General Circular No.
17/78/2001-CL.V dated 28-01-2005 of M/o
Company Affairs. (iv) Demand Draft/Pay
Order/Banker’s Cheque No. _______ dated________ drawn in favour of “Registrar
of Companies ________ (name of State in which registered office of the company
is situated)” payable at _________. (v) NOC from RBI/SEBI as the
case may be, in case an NBFC/Collective Investment Management Company is
registered with RBI/SEBI. (vi) Copy of Board
Resolution and/or other document showing authorization given to us for filing
of this application. (3) Now, therefore, the undersigned request you to strike off the name
of the company from the Register. (4) I shall be liable under section 628 of the Companies Act, 1956 and
under relevant provisions of the Indian Penal Code if I make any statement
pursuant to this circular:- (a)
which
is false in any material particular, knowing it to be false; or (b)
which
omits any material fact knowing it to be material (5) * Ours is a Collective
Investment Management Company (CIMC) /NBFC* registered/not registered*
with SEBI/RBI*. For CIMC/NBFC (6) (a) Ours is a CIMC
/NBFC company registered with SEBI/RBI. Our registration number with
SEBI/RBI is ________________ and we had Head Office at ____________ and
branches at ____________(indicate places of Branch Offices). We have been issued a “No Objection
Certificate” by SEBI/RBI* to exit from the Register of Companies. (b) Ours is a CIMC
/NBFC company not registered with SEBI/RBI. We declare that we had
not commenced business or carried out any business or operations or commercial activity at any time. * Clauses 5 and 6 applicable only in case of an
CIMC/NBFC * Strike out which-ever is not applicable Yours faithfully, Names
and addresses of Applicants 1. Signature Date
: 2. Signature ANNEXURE-B AFFIDAVIT (to be given individually by
applicant) I, Director of
___________________________________ Private/Limited, (hereinafter called “the
Company”), incorporated on ___/___/_____ under the Companies Act, 1956 having
its Registered Office at __________________and having PAN No:___________ do solemnly affirm and state as under: 1. I _______________, S/o D/o .
Shri___________, holder of Passport No: ______/PAN _______ (copy of Passport/PAN duly attested
by Gazetted Officer is enclosed) am Director of the company stated above since_______________ 2. My present residential address is __________________ (copy of
documentary evidence duly attested by Gazetted Officer is enclosed.
Alternatively, an affidavit sworn
before Magistrate may be enclosed) 3. My permanent address is ________________________ (copy of
documentary evidence duly attested by Gazetted Officer is enclosed. Alternatively, an affidavit sworn before Magistrate may be
enclosed) 4 . The Company was
incorporated on __________________ with the
object to carry on the business of
____________________________________________________. 5. The company
maintains/does not maintain any bank account as on date. 6. The Company has been
inoperative from the date of its incorporation. / The company commenced
business/operations/commercial activity after incorporation but has been
inoperative for the past _________________ year(s) due to following reasons*. ______________ _______________ (give the reasons
here) *
Strike out whichever is not applicable 7. As on date, the Company does
not have any dues towards Income Tax / Sales Tax / Central Excise/ Banks and
Financial Institutions; any other Central or State Government
Departments/Authorities or any Local Authorities. 8. Strike out whichever is not applicable :- (i) There is no litigation pending against or involving the
company. (ii) There are litigations pending against the company which are
mentioned as under:- (give brief
particulars of litigation and state the authority, with address, where it is
pending, along with case number). (iii) The litigation under
Companies Act, 1956 or other Act (specify the name of the Act) pertains to an
offence which is compoundable and the
compounding application has been filed with the appropriate authority. ( A copy
of compounding application to be enclosed). 9. I have been authorised
to file this application by Board resolution dated _______/. (Copy of
resolution is annexed). 10.
That an application is hereby filed for action under section 560 of the
Companies Act, 1956, before the Registrar of Companies with necessary fees and
required Financial Statement/Statement of Account/declaration* signed by me. * Strike out whichever is not applicable. 11.
In case of any loss(es) to any person or any valid claim arising from any
person after the striking off of the
name of the Company from the Register of Companies, , ___________, I the
applicant, undertake to indemnify any person for such losses and the indemnity
bond to this effect is enclosed and submitted. I solemnly state
that the contents of this affidavit are true to the best of my knowledge and
belief and that it conceals nothing and that no part of it is false. (Deponent) Verification:- I verify
that the contents of this affidavit are true to the best of my knowledge and
belief. Place:
Signature: ____________________ (Deponent) Date: ANNEXURE-C INDEMNITY BOND (to be given
individually by Applicant) I, the director of
___________________________________ Private/Limited, (hereinafter called “the
Company”), incorporated on ___/___/_____ under the Companies Act, 1956, having
its Registered Office at _______________________ and having PAN
Number___________________________do hereby declare that: (a) (i) I ____________, S/o D/o
Shri________, am holder of passport/PAN ______ etc. (copy
of Passport/PAN duly attested by Gazetted Officer is enclosed) (ii) I am Director of this company since_______________ (iii) My present residential address is __________________ (copy of
documentary evidence duly attested by Gazetted Officer is enclosed. Alternatively an affidavit
sworn before Magistrate may be enclosed.) (iv) My permanent address is ________________________ (copy of
documentary evidence duly attested by Gazetted Officer is enclosed . Alternatively an affidavit
sworn before Magistrate may be enclosed.) (b) That I have made an affidavit dated the ______,
duly sworn before Magistrate/Executive Magistrate/Oath
Commissioner/Notary affirming that the Company
___________________Private/ Limited, has no assets and no liabilities. (c) Further, the Company has been inoperative
from the date of its incorporation. / The company commenced
business/operations/commercial activity after incorporation but has been
inoperative for the past _________________ year(s)*. And the company is not intending to do any
business or commercial activity. Thus the Company is defunct and I request the
Registrar of Companies, _______________ to strike off the name of the Company
from the Register of Companies under Section 560 of the Companies Act, 1956. * Strike out whichever is not applicable. 2. I do hereby undertake and indemnify in
writing: (a) to
pay and settle all lawful claims arising in future after the striking off the
name of the Company. (b)to
indemnify any person for any losses that may arise pursuant to striking off the
name of the Company. (c) to
settle all lawful claims and liabilities which have not come to our notice upto this stage, even after the name of the Company has been struck
off in terms of Section 560 of the Companies Act, 1956. Place:
Signature: 1._______________ Name: Date: WITNESSES: 1. Signature Name: Father’s name: Address: Occupation: 2. Signature Name: Father’s name: Address: Occupation: ACCEPTED Registrar of
Companies (Para 7(b) of circular) Name
of the Company: Year
to which the Statement of Account pertains: Part
A Particulars
: Figures
at the (Brief
break up in respect of each item needs to be given). Current
Financial Year Previous
Financial Year (1)
Capital (2)
Reserves & Surplus (including balance in Profit and Loss Account) (3)
Loan Funds Total of (1) to (3)
(Brief
break up in respect of each item needs to be given). Current
Financial Year Previous
Financial Year (1)
Fixed Assets (2)
Investments (3)
(i) Current Assets, loans and Advances Less
: (ii) Current Liabilities & provisions Net
Current assets ( I –ii) (4)
Miscellaneous expenditure to the extent not written off or adjusted (5)
Profit && Loss Account (Debit balance) Part-B Particulars (Brief
break up in respect of each item needs to be given). Current
Financial Year Previous
Financial Year
III.
Profit / Loss before Tax (I-II) IV.
Appropriation in case of profit Date
: Signature Signature
(Secretary/Applicant*) Signature
(Director/Applicant) *
Applicable only if there is MD/Secretary
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