Stepping up action against over two lakh companies which have not been carrying out any business for the last 1-2 years, the government on Tuesday said such firms have been ‘struck off’ from the Register of Companies and action initiated to restrict their bank accounts, an official statement said on Tuesday.
“The names of 2,09,032 companies have been struck off from the Register of Companies under Section 248 (5) of the Companies Act. The individuals will therefore not be able to operate bank accounts of such companies till such companies are legally restored by an order of the National Company Law Tribunal (NCLT),” said the Finance Ministry statement.
The existing directors and authorised signatories of such struck off companies will now become ex-directors or ex-authorised signatories.
“Since such ‘struck off’ companies have ceased to exist, action has been initiated to restrict the operation of bank accounts of such companies. 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 companies,” it said.
A list of such companies has been published on the website of the Ministry of Corporate Affairs. The restoration, as and when it happens shall be reflected by change in the status of the company from ‘Struck off’ to ‘Active’, it added.
The ‘Struck off’ companies fall within the ambit of Section 248 of the Companies Act, where the firms have failed to commence business within one year of incorporation or have not paid the subscription which they had undertaken to pay within a period of 180 days from the date of incorporation.
If 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 for obtaining the status of a dormant company, it would also fall under the ambit of Section 248.
In addition to such struck off companies, banks have also been advised to go in for enhanced diligence while dealing with companies in general.
“A company even having an active status on the website of the Ministry of Corporate Affairs but defaulting in filing of its due financial statement or annual return of particular of charges on its assets on the secured loan should be seen with suspicion as, prima facie, the company is not complying with its mandatory statutory obligations to file this vital information for availability to its stakeholders,” the statement said.