Revive your struck-off company with ease. Get a complete guide on revival, documents required & procedure from Vakilsearch.
Overview of Revival of Strike-Off Companies
Strike-off, a legal process resulting in company dissolution, can occur due to various reasons like non-compliance with Companies Act provisions. In case a company wants to recover assets or continue the business, revival of the struck-off company is possible. This requires following specific procedures and providing necessary documents.
The time to appeal a strike-off varies depending on the circumstances that led to the strike-off. In most cases, the appeal must be made within 20 years of the strike-off. However, if the strike-off occurred due to the non-filing of annual returns, the appeal must be made within six years of the strike-off. It is important for companies to act quickly and seek legal advice if they wish to appeal a strike-off. (Valium) A delay in appeal can lead to the loss of assets and legal rights of the company.
Reasons for Reviving Strike-Off Companies
There could be various reasons why a company might want to revive a struck-off company. Some of the most common reasons are:
To continue business activity: If a company is struck off due to non-filing of annual returns or non-compliance with other provisions of the Companies Act, it might want to revive the company to continue its business activity.
To recover assets: When a company is struck off, its assets become the property of the Crown. If the company wants to recover its assets, it will need to revive the company.
To avoid legal liability: If a company is struck off, it does not mean that its directors are free from legal liability. The directors can still be held liable for any illegal activity conducted by the company. To avoid legal liability, the directors might want to revive the company and regularise its affairs.
What is the Time to Appeal such a Strike-Off?
If a company is struck off, it has a period of 20 years to apply for its revival. After 20 years, the company will be deemed to have been dissolved, and its assets will become the property of the Crown.
Documents Required to Revive Struck-Off Companies
To revive a struck-off company, the following documents are required:
Application for revival: The company needs to file an application for revival with the Registrar of Companies. The application should include the reasons for revival and the steps the company will take to regularise its affairs.
Affidavit: The company needs to file an affidavit stating that it has taken steps to regularise its affairs and that it will comply with all provisions of the Companies Act.
Statement of Accounts: The company needs to file a statement of accounts, which should include all financial transactions conducted by the company since the date of the strike-off.
Board Resolution: The company needs to pass a board resolution approving the revival of the company and authorising the director(s) to file the necessary documents.
Power of Attorney: The company needs to appoint a person as a Power of Attorney to represent the company during the revival process.
Procedure for the Revival of Struck-Off Companies
The procedure for the revival of struck-off companies is as follows:
Application for revival: The company needs to file an application for revival with the Registrar of Companies. The application should include the reasons for revival, the steps the company will take to regularise its affairs, and the documents mentioned above.
Publication of notice: The Registrar of Companies will publish a notice in the Official Gazette stating that the company has applied for revival. The notice will also provide a period of 30 days for any objections to be filed.
Objections: If there are any objections filed, the Registrar of Companies will consider them and decide whether to revive the company or not.
Revival: If there are no objections or if the objections are resolved, the Registrar of Companies will revive the company. The company’s name will be reinstated in the Companies Register, and it will become a legal entity once again.
What Would Happen After the Revival?
Once a struck-off company is revived, it will regain its legal status as an entity, allowing it to continue its business activity. However, to do so, the company must ensure that it complies with all relevant provisions of the Companies Act, including maintaining up-to-date financial statements and statutory registers. The directors of the company must also ensure that the company’s affairs are regularised.
To make the revival process easier for companies, the Ministry of Corporate Affairs has introduced the Companies Fresh Start Scheme, 2020 (CFSS-2020). This scheme aims to reduce the compliance burden on companies that have been struck off and encourage them to come forward and regularise their affairs. Under the CFSS-2020, companies can revive their struck-off companies by filing the required documents and paying the necessary fees. Moreover, companies that avail of the scheme are granted immunity from prosecution and penalties.
Revival of Struck Off Company by Companies Fresh Start Scheme, 2020 (CFSS-2020).
- The CFSS-2020 is a scheme introduced by the Ministry of Corporate Affairs to help companies revive their struck-off companies.
- The scheme aims to reduce the compliance burden on companies and encourage them to come forward and regularize their affairs.
- Under the CFSS-2020, companies can revive their struck-off companies by filing the necessary documents and paying the required fees.
- The scheme provides immunity from prosecution and penalties for companies that avail of it.
- The CFSS-2020 is available for a limited time period and has a specific application window.
- Companies must meet certain eligibility criteria to qualify for the scheme.
- The scheme covers companies that have been struck off by the Registrar of Companies, voluntarily or involuntarily.
- Companies can benefit from the scheme by getting their name restored on the Register of Companies and avoiding any legal consequences arising from non-compliance.
- The CFSS-2020 also provides relief to inactive companies by waiving additional fees for late filing of annual returns and financial statements.
- The scheme helps companies reduce their outstanding debt and improve their creditworthiness by allowing them to file overdue documents without incurring additional fees.
- The CFSS-2020 provides an opportunity for companies to start afresh and ensure compliance with all legal provisions of the Companies Act.
Benefits of the Companies Fresh Start Scheme- 2020
The Companies Fresh Start Scheme, 2020 provides the following benefits to companies:
Immunity from prosecution and penalties: Companies that avail of the scheme will be granted immunity from prosecution and penalties for any non-compliance with the provisions of the Companies Act.
Reduction in compliance burden: The scheme aims to reduce the compliance burden of companies by allowing them to regularise their affairs without facing penalties.
Revival of struck-off companies: The scheme provides an opportunity for companies to revive their struck-off companies and continue their business activity.
Know more about: Strike Off Company
Conclusion
Reviving a struck-off company is a complex process that requires careful attention to detail and compliance with various provisions of the Companies Act. However, with the right guidance and knowledge, it can be done. The Companies Fresh Start Scheme, 2020 provides an opportunity for companies to revive their struck-off companies and regularise their affairs without facing penalties. For more details and information, contact our Vakilsearch legal experts and get the right guidance.
FAQs on Revival Of Struck-Off Company
Why would a company want to be struck off?
A company might want to be struck off if it is no longer carrying out any business activity or if it wants to avoid compliance requirements under the Companies Act.
What happens to company assets when struck off?
When a company is struck off, its assets become the property of the Crown.
Who can object to a company being struck off?
Any person or authority can object to a company being struck off within 30 days of the publication of the notice in the Official Gazette.
What happens when a company is restored?
When a company is restored, it becomes a legal entity again, and it can carry out its business activity. The company will need to regularise its affairs and comply with all provisions of the Companies Act.
What happens to bank accounts when a company is struck off?
When a company is struck off, its bank accounts are frozen, and the funds are transferred to the Crown. However, the directors of the company can apply to the Registrar of Companies for the release of funds for specific purposes.
