Section 248 of CA 2013 : Section 248: Power Of Registrar To Remove Name Of Company From Register Of Companies

Explanation using Example

Imagine a scenario where XYZ Tech Solutions Pvt. Ltd. was incorporated on January 1, 2020. It set up an office and planned to offer IT services. However, due to unforeseen circumstances, the company did not commence business within the first year of its incorporation. By the end of 2021, the company still had not started its operations and had no financial transactions for two consecutive financial years. The directors also did not file for dormant status.

The Registrar of Companies (RoC), upon noticing XYZ Tech Solutions Pvt. Ltd.'s inactivity, sends a notice to the company based on Section 248(1) of the Companies Act, 2013. The notice informs the company of the RoC's intention to strike off its name from the register due to its failure to commence business and lack of operations.

XYZ Tech Solutions Pvt. Ltd. now has 30 days to provide a valid reason for its inactivity and to prove that it should remain registered. If the company fails to respond or the RoC is not satisfied with the response, the RoC may proceed to publish a notice in the Official Gazette and dissolve the company as per Section 248(5).

Alternatively, the shareholders of XYZ Tech Solutions Pvt. Ltd. could pass a special resolution or agree by a 75% majority to voluntarily apply for striking off the company's name from the register, provided all liabilities are settled, as described in Section 248(2).