In this post, we’ll look at how to register a business in Kolkata. Company registration is a procedure through which all businesses are registered on the MCA’s website (Ministry of Corporate Affairs). The Company Registration in Kolkata is a simple procedure, but it requires numerous procedures to complete.

A Private Limited Company offers its stockholders legal protection and limited liability. A privaely held limited firm must have at least positions two working directors. A person can be both a director and a shareholder in a Private Limited Company. After receiving a Certificate of Incorporation, a Private Limited Company (PLC) can begin operations. Within 15 days following its application, a PLC can be implemented.

As a result, we will concentrate on the advantages and procedures of forming a Private Limited Company registrationin Kolkata in this post.

Advantages of forming a private firm company registration in Kolkata

1. A private limited company might have anything from two to fifty directors.
2. It is a legal autonomous body.
3. Directors have limited liability and are not directly responsible for the company’s operations.
4. Directors are only partially liable to creditors.
5. In the event of a default, the bank or creditors will sell the company’s assets rather than personal property.
6. The directors are eligible for tax benefits.
7. Suing or being sued in the name of a registered corporation is possible.
8. Companies that are registered have a higher chance of borrowing money.

Company Registration in Kolkata: Private Company Incorporation Checklist

• Directors: For private company registration in Kolkata, a minimum of two directors is required, with one of them being a resident director.
• The investment must be made in accordance with the business type, and there is no minimum capital investment necessary for a firm.
• Inventive business name: The name of the firm must not be identical or confusingly similar to that of another company.
• Registered address: Every business should have one.

Steps for Incorporation of the Company

The following are the stages of forming a business using the RUN form:

1. After that, create a login account and log in.
2. Enter the name you want to use and cross-reference it with the MCA database.
3. If an established business wants to reverse its name, a CIN will be requested through the RUN e- form.
4. The applicant must specify the name that he or she wishes to keep on file in case the firm’s name is changed or a new company is formed.
5. Then he or she must submit the prospective company’s objects as well as any additional documents in support of the suggested name.

Limited Name Validity

• For a new corporation, an authorised name is valid for 20 days from the date of approval.
• 60 days after the date of authorization for changing the name of an established corporation.

Steps for Private Company Registration in Kolkata

Step 1: Obtain DSC

Because the process is online, a digital signature is required for the incorporation of a private limited company. Members and executives must have a legitimate Class II or Class III DSC.

Step 2: Fill out an application for a DIN number.

A directors must have a DIN and must apply for one on MCA if he does not already have one. A DIN number can be used to become a director in many businesses.

Step 3: Submit an application for name approval

At the time of establishment, the company’s name, as well as SPICe (INC-32) must be submitted for approval. If the name is rejected, it can be resubmitted.

Step 4: e-MoA (INC-33) and e-AoA are the fourth and final steps (INC-34)

Previously, MoA and AoA had to be filed physically, but now they must be filed online on the MCA website. These papers must be digitally signed by the subscribers.

Step 5: PAN and TAN applications

After all of the paperwork have been completed, the applicant should consider applying for a PAN and TAN.

Step 6: Certificate of Incorporation 

MCA & RoC will analyse all of the documentation and issue a Certificate of Incorporation if they are pleased. The Certificate of Incorporation is a legal document that grants the firm legal standing.

7th Step: Open bank Accounts

The firm must create a bank account for any transactions in its name after receiving the certificate of incorporation.

In order to register a company in Kolkata, you’ll need the following documents

Documents required for company registration  in Kolkata:

1. For DSC 
2. DIN (Director Identification Number)
3. Incorporation of a Business

In the case of DSC,

1. Along with the DSC application form, the following papers must be forwarded:
2. The claimant’s photograph (to be stamped across with a blue pen)
3. The director’s address proof (s)
4. Id Proof (Pan Card) of the applicant Passport Aadhar card Driving licence Voter Id card Email Id and contact number (for each director)

DIN

Fill out the e-form DIR -3, which is available on the MCA website. Alongside Form DIR -3, attach the supporting information:

1. Id proof photo of the applicant (attested)
2. Proof of address (attested)
3. Make the payment as directed. The only way to pay is on the internet.
4. There will be a preliminary DIN created.
5. A preliminary DIN becomes an authorised DIN after verification.

• For a Firm’s Registration
• The Firm’s Title
• The firm’s assets
• Investors’ list
• The director’s Id proof is the company’s purpose (s)

1. Aadhar card and passport
2. Id cards for voters and driver’s licence
3. Director’s proof of residence (s)
4. Bank statement Telephone bill
5. The cost of electricity
6. Mobile phone bill (not old than two months)
7. INC-9 Director(s) Consent (form DIR-2) (Affidavit)

• Proof of the registered office’s address

1. Bills of Gas, 
2. Phone, and
3. Electricity

If the office is included in the lease, the lease agreement and a letter of authorization from the owner are required.

Holders of DINs declare themselves

A Private Limited Company Registration in Kolkata is an online operation that should be completed with caution, and once completed, the directors are entitled to all of the privileges of a Private Limited Company.

The post Private Limited Company Registration in Kolkata Via Online Method appeared first on MUDS.

Releases from the RBI Monetary Policy 2022 Meeting: The six-member Monetary Policy 2022 Committee (MPC), led by Reserve Bank of India (RBI) Governor Shaktikanta Das, maintained the repo rate at 4% and the reverse repo rate at 3.35 % intact. Here’s what the governor of India’s central bank said.

RBI Monetary Policy 2022: The Reserve Bank of India’s (RBI) Monetary Policy 2022 Committee (MPC) retained the repo rate at 4% for the 11th straight approach achieves a ‘affiliative posture,’ according to RBI Governor Shaktikanta Das on Friday.

The MPC decided unanimously to continue the accommodating approach, according to the central bank governor, and the reverse repo rate was also remained steady at 3.35 percent.

The Marginal Standing Facility (MSF) rates and the lending rate were likewise held steady at 4.25 percent.

On May 22, 2020, the RBI reduced its policy repo rate, or short-term lending rate, in an off-policy cycle to boost demand by decreasing interest rates to a historic low.

In a press conference following the Monetary Policy 2022 meeting, Das stated that the RBI will return the liquidity adjustment facility (LAF) corridor to 50 basis points (bps), as it was pre-Covid. The MSF rate and the bank rate remain at 4.25 percent.

“It also agreed to remain accommodating while concentrating on withdrawal of accommodation to ensure that inflation remains within the goal moving ahead, while encouraging expansion,” 

-he added on the central bank’s attitude.

” It will continue to be part of the RBI’s toolbox, and its use will be at the discretion of the RBI for objectives that are indicated from time to time. The FRRR, in conjunction with the SDF, will increase the flexibility of the RBI’s liquidity management framework.”

The RBI reduced its growth prediction for the current fiscal year to 7.2 percent from 7.8 percent previously, while increasing its inflation forecast to 5.7 percent from 4.5 percent.

He went on to say that, given the inordinate volatility in international oil prices as of early February, as well as the extreme uncertainty surrounding the evolving geopolitical tensions, any projection of growth and inflation is fraught with risk, and is largely dependent on future oil and commodity price developments.

Das addressed liquidity and financial market circumstances in his speech, stating that the RBI will continue to take a sophisticated and agile approach to liquidity risk management while preserving appropriate liquidity in the system.

“At the moment, liquidity management is distinguished by two procedures: variable rate reverse repo (VRRR) bids of varied maturities to swallow liquidity, and variable rate repo (VRR) auctions to fill temporary liquidity problems and offset anomalies.” “We will keep taking this strategy,” he stated.

ATM cash withdrawal without a card that is interoperable

In an effort to combat fraud, the Reserve Bank of India agreed on Friday to allow all banks to use card-less cash withdrawal through ATMs. Currently, card-less cash withdrawal via ATMs is a permissible form of transaction allowed by a few banks in the nation on an as-needed basis (for their customers at their own ATMs).

Economic experts and market analysts reacted as follows:

• The severe reduction in GDP forecasts for FY23 and significant increase in inflation expectations for FY23 might suggest some tightening measures in the future, which would be supported by the shift in posture to focus on withdrawal of accommodation. Current geopolitical developments, supply chain concerns, and commodity price increases are tying the RBI’s hands and pushing it to progressively turn hawkish, despite its desire to maintain its pro-growth perspective. The 10-year Gsec yield has increased to 7%, showing the street’s worry over the massive borrowing programme in the face of rising interest rates.”
• “Retaining the repo rate at 4% and the reverse repo rate at 3.35 percent, continuing with the accommodating posture on expected lines,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. Recognizing the new reality of increased petroleum prices caused by the war, the RBI cut the FY23 GDP growth rate prediction to 7.2 percent from 7.8 percent before and upped the FY23 CPI inflation projection to 5.7 percent from 4.5 percent previously. This is predicated on the premise that crude will be $100 per barrel. This suggests that if crude falls considerably, which is likely if the conflict ends soon, GDP and inflation will improve.The opposite might be true if the battle escalates and petroleum prices rise well beyond $100. The Governor correctly underscored India’s macroeconomic fundamentals, noting to an improvement in the external position aided by record exports, large foreign reserves of $608 billion, and banking sector development. The SDF (Standing Deposit Facility) is a new mechanism established by the central bank to absorb liquidity. 

“The recent RBI Monetary Policy 2022 did not include any surprises,” stated Nish Bhatt, Founder & CEO of Millwood Kane International, “it held rates constant for the 11th straight policy.” However, it has clearly outlined the road to policy unwinding. The emphasis will now be on withdrawing the accommodating policy stance in order to keep inflation under control. The RBI’s statement today plainly suggests the end of loose Monetary Policy 2022, which is reflected in the 10-year benchmark yield, which has reached a multi-year high. The unwinding of liquidity will cause some instability, and it is expected that the RBI would drop the growth rate prediction for FY23 to 7.2 percent, with the inflation target raised to 5.7 percent from 4.5 percent previously. The explicit goal of central banks throughout the world is to manage inflation, unwind lose money, and concentrate on gradual and steady development.“

The post New Monetary Policy 2022: Repo Rate Remained Unchanged appeared first on MUDS.

Sexual harassment law: The word “workplace” confers to the Sexual harassment at workplace of Women at Workplace (Regulation, Prevention, and Redressal) Posh Act of 2013, and specifically includes:

The post POSH Act: ALL ABOUT THE SEXUAL HARASSMNET LAW IN INDIA appeared first on MUDS.

Have you ever contemplated what could be the best way to remove directors’ disqualification? if you are a director, then you must be wondering what you can do to remove your disqualification and what will be the most suitable way? 

Of course, it depends on what you want out of your career. If you want to remain a director of the old company, then you might need to revive the company first. if you just want to remove disqualification and continue directorship in other firms then there are other ways. Let us find out what is the most suitable way to remove director disqualification for any director. 

Rules for Directors’ Disqualification

The Companies Act of 2013 required companies to furnish documents related to their finances and operations every year. Defaulting on submission of these documents for a continuous period of three years had stricter provisions of punishment compared to the previous version of the Companies Act. The act considered the director of the company responsible for the actions of the company and so, has a policy of strict actions against them in case their company defaults. 

The directors of the company are responsible for the smooth operation of the company and therefore they are responsible for any action taken by the company that leads to failure in complying with the directions of the Government. The following points will give information on rules or issues which can lead to directors’ disqualification,

• Any directors of the company who have been convicted under section 188 by the Court regarding party transactions during the last five years. 
• The Court also has the authority over the disqualification of directors’ who are undischarged insolvent. 
• If any court or tribunal has earlier ordered the disqualification of the director. 
• If the directors fail to inform about their respective shares in any company held by them alone or in collaboration. 
• If the director is convicted in any offense by the Court and sentenced to imprisonment for more than 6 months.
• If the organization fails to redeem any debentures on their due date or fails to pay the interest due.
• If the company of the director has not filed its financial statements and annual returns for three years consecutively. 
• Failure to pay the declared dividend and continuing so for one year or more could also lead to disqualification of the company’s director. 
• If the company has failed to repay the deposit made to it or pay interest on those deposits. 

• If any director has applied for his/her adjudication as an insolvent or if the directors’ application for the same is still pending. 
• If any Court confirms that the director is not of sound mind. 

Analysing Court’s View on Writ Petitions through a Case

Let’s understand how filing a Writ Petition can help in the removal of directors’ disqualification and how Karnataka High Court responded to such petition through the case of Yashodhara Shroff v. Union of India, WP No. 52911 of 2017.

In this case, the High Court Said, “the directors of the struck-off companies under Section 248 of the Act do not per se get disqualified. But, if the said company has also not complied with Section 164(2)(a) of the Act, then the said company being a defaulting company, the directors of such a company get disqualified.”

Order of Karnataka High Court:

• Where the disqualification of the petitioners is based on any financial year “before 01-04-2014 as well as subsequent thereto” while reckoning the continuous period of three financial years under Section 164(2)(a) of the Act, irrespective of whether the petitioners are directors of public companies or private companies, such a disqualification was considered bad in law, and the Writ Petitions are allowed in such cases.
• For cases whose disqualification occurred under the provisions of Companies Act 1956 for directorship in Public Companies, the disqualification stands. 
• The DINs of directors whose disqualification has been removed by the court should be reactivated. 
• If the director is disqualified by considering financial years before 2014 and for private companies only, the disqualification will not be removed.

This case paved the way for other directors to file for relief in the High Court if they want to remove disqualification without the revival of their company. Even after the CODS was over, filing of the Writ petition to remove directors’ disqualification is still the proven way to end the exile for directors. 

Remedies for Directors’ Disqualification

During the initial few years of introduction of the new Companies Act, it was a common understanding that there was no remedy available for directors who are disqualified by RoC.  It was thought that waiting for the five years exile period to end is the only way to resume directorship work. However, there was another option which encompassed the revival of the disqualified company after struck off from RoC. Once the company is revived, its directors could also apply for the revival of their role. There were about 2.4 companies that were axed by the Ministry of Corporate Affairs (MCA) using the Companies Act in 2017. These companies started exploring the options for their revival and the directors hoped to get their DIN reactivated. When the MCA came up with the Condonation of Delay Scheme 2018, the company’s directors hoped to get their company revived without paying heavy penalties and apply for their disqualification removal.

This year, the Ministry of Corporate Affairs (MCA) has introduced Companies Fresh Start Scheme, 2020 or CFSS  The scheme offers companies struck off from RoC a one time opportunity of applying for condonation of their failure to comply by the norms (delay of filling the various documents, forms, returns, etc. with the Registrar). Let’s understand the benefits offered under this scheme,

Benefits to Avail in Companies Fresh Start Scheme

Revival of any struck-off company with a complete fee waiver on the application and no penalty for non-compliance.

An immunity period of 6 months (with Immunity Certificate) for the company from the date of closure of CFSS, 2020 i.e., 30 September 2020.

The companies will only have to pay the normal fees prescribed by Companies Rules, 2014 to file for the MCA-21 registry.

Once the company is revived, its disqualified directors can apply for removal of disqualification and reactivation of their DINs. This is currently the most preferable method for directors’ disqualification removal for those who also want to restart their old company. 

Other Remedies

There were many directors and company owners who could not get advantage from the CODS Scheme to revive their business and thus, their directors also missed the chance at the revival of their careers. The directors’ who failed to use this scheme for the removal of disqualification were left with two options.  Either they should apply in the National Companies Law Tribunal and hope to get a company revival order. Once the company was revised, they could apply for the removal of their disqualification and reactivation of DIN. In this case, when the NCLT passed the order of company revival, then RoC used to verify this order and relevant documents of the directors. But this procedure could only be followed if the companies wanted revival, the other option for directors who just wanted to activate their DIN without applying for the revival of their company was to apply for removal of disqualification in the respective High Court through a Writ Petition. The option of writing a Writ Petition to High court is attributed to constitutional rights conferred by Article 226 of the constitution to seek relief. 

How to Draft an Impeccable Writ Petition?

1. The disqualified director must undertake to use his constitutional right to file the Writ Petition under Article 226 of the Constitution in the respective High Court. The High Court should be chosen according to the area of jurisdiction of the company. In the application, the petitioner should include the following information,

• List of date and events of disqualification.
• Affix an urgent application with a Notice of Motion. 
• Should give reasonable justification to court for not filing the statutory documents that led to the disqualification of company and removal of its name from RoC. 
• Inform Court about the current status of the company and its directors seeking relief. 
• List out the companies in which the petitioner is serving as a director. 
• File a copy of the impugned Press Release or Notice issued by the RoC that lists out the names of the disqualified directors. 
• Personal information such as name address and designation of each Memo of parties should be mentioned in the petition. 
• A prayer cause should be attached to dismiss the publication issued by the RoC under Companies Act’s Section 164 (2).

2. After this, the High Court issues orders after hearing the option for reactivation of the DIN of directors. The directors need to file the copy of the order and all other statutory documents to the RoC to continue with the process p0f registration. 
3. Once the defaulter petitioner fulfils all the required documents and completes payment of all the penalties, the RoC will start the process of reactivation. 

Hire an Experienced Representative 

Taking legal help to file a Writ Petition in the High Court is necessary considering the technicalities involved in the process. There are lots of details that should be considered before drafting the petition and only an experienced professional can handle this kind of job. Also, an expert professional from a legal firm will not only help you in the filing of the petition but also help in representing your case in the Court. An advocate from a reputed firm will attend all the hearing of the Court and put arguments effectively to ask for relief from disqualification. Once the Court grants a favourable order, the expert will help you in following the complete procedure mentioned in the order. He will also help you file all the necessary documents in RoC before activation of DIN. 

If you are worried about the outcome of filing a Writ petition in high Court or confused whether it will bring positive results, then this should serve as good news to you. There have been many instances across High Courts from all over the country where the director’s disqualification has been removed after hearing a Writ petition filed by them. The judiciary has granted interim relief to many directors and quashed orders of RoC in some cases. 

The Court is in general agreement with the aggrieved petitioners on the following points:

• Retrospective Application of Companies Act: In some cases, the Court also found the act being applied retrospectively for disqualification of directors. The Courts deemed this kind of application to be unjustified. 
• Contradictory Provisions in the Previous and New Act: The High Court finds it objectionable that the provisions of the Companies Act of 1956 did not have these regulations for the private companies and their directors, and so the new Act should not impose it on them in 2017.
• Order of RoC is Against Natural Justice: In most cases of directors’ disqualification, the aggrieved petitioners have mentioned that they never got any notice regarding their removal from RoC before the orders. Therefore, they never had a chance to clarify to RoC why they were not able to meet all the compliance standards of RoC. This is against the constitutional right of any individual as it doesn’t allow one person to show the cause of their actions and passes the order unilaterally. 

So, you can safely assume that the judiciary generally gives a favourable decision to directors who give valid reasons for defaulting. This should serve as a ray of hope for disqualified directors who are sceptical of filing writ petition for disqualification removal of their directorship. Just select an experienced legal firm that can represent your case efficiently and hope for a positive outcome.

The post What Is the Most Effective Solution to Directorship Disqualification by ROC? appeared first on MUDS.

As per the provisions mentioned in the Companies Act 2013, an director of a company can be disqualified for five years from the directorship of his/her company and also banned to join any other organization as a director if his/her current organization fails to submit their financial statement for a period of three years consecutively. Now the obvious question is whether this disqualification can be removed or not? And if it can be removed what are the ways to do it. To answer all these questions we have explored various aspects of the removal of director disqualification in different sections of this article. By the end of the article, you will be able to understand,

• On what grounds directors are disqualified from the organisation?
• Hyderabad High Court’s perspective on such cases
• What was the impact of these new provisions in the act?
• What are the remedies for disqualified directors?

We will also understand the process of removal of a director from the perspective of a directors’ disqualification removal case in Hyderabad High Court. This will help us understand the general viewpoint od judiciary on cases related to the removal of directors’ disqualification. 

Different Grounds for Directors’ Disqualification

The Companies Act of 2013 required companies to furnish documents related to their finances and operations every year. Defaulting on submission of these documents for a continuous period of three years had stricter provisions of punishment compared to the previous version of Companies Act. The act considered the director of the company responsible for actions of the company and so, has a policy of strict actions against them in case their company defaults. 

The directors of the company are responsible for the smooth operation of the company and therefore they are responsible for any action taken by the company that leads to failure in complying with the directions of Government. The following points will give information on rules or issues which can lead to directors’ disqualification,

• Any directors of the company who has been convicted under section 188 by the Court regarding party transections during last five years. 
• If the directors fail to inform about their respective shares in any company held by them alone or in collaboration. 
• If any director has applied for his/her adjudication as an insolvent or if the directors’ application for the same is still pending. 
• If the director is convicted in any offence by the Court and sentenced to imprisonment for more than 6 months.
• If the organisation fails to redeem any debentures on their due date or fails to pay the interest due.
• If the company of the director has not filed its financial statements and annual returns for three years consecutively. 
• If the company has failed to repay the deposit made to it or pay interest on those deposits. 
• Failure to pay the declared dividend and continuing so for one year or more could also lead to disqualification of the company’s director. 

• If any Court confirms that the director is not of sound mind. 
• The Court also has the authority over the disqualification of directors’ who are undischarged insolvent. 
• If any court or tribunal has earlier ordered the disqualification of the director. 

Analysis of Hyderabad High Court’s Order 

Ever since the norms for director disqualification have come into place the high Court’s throughout India are using flurry of writ petitions being filed for relief. Let’s understand how filing these Petitions have helped the petitioners in their cases through a case study of M/s. Dr Reddy’s Research Foundation & Ors. Vs. The Ministry of Corporate Affairs & Anr. 

“In this case, it was argued by the sides that the action of disqualification was considered due to non-filing of financial statements from April 01, 2014. The three years from 2014 were about to be completed only on 31 March 2017 but the date for filing of annual financial returns for the said years was 30 October 2017. The court thus, director the MCA to reactivate the DINs of the directors and allowed them to file their financial statement of their defaulting company from 2011 to 2016.”

This case paved the way for other directors to file for relief in the High Court if they want to remove disqualification without the revival of their company. Even after the CODS was over, filing of the Writ petition to remove directors’ disqualification is still the proven way to end the exile for directors. 

Ways in which Directors Can Seek Relief from Disqualification

During the initial few years of introduction of the new Companies Act, there were about 2.4 companies that were axed by the Ministry of Corporate Affairs (MCA) using the Companies Act in 2017. These companies started exploring the options for their revival and the directors hoped to get their DIN reactivated. When the MCA came up with the Condonation of Delay Scheme 2018, the company’s directors hoped to get their company revived without paying heavy penalties and apply for their disqualification removal.

It is the responsibility of the company’s director to file all the financial details of the company with the Ministry of Corporate Affairs every year as per the Companies Act. If the directors fail to submit these details for three consecutive years, then the Ministry could go on to remove the company from RoC and deactivate its directors’ DIN for five years. In the year 2018, the Central Government came up with Condonation of Delay Scheme (CODS) where directors could file the relevant document to get their DINs reactivated. The scheme involved the payment of a moderate fee and condonation of hefty penalties due to defaulting on a payment. Many companies at that time used this scheme for revival and removal of directors’ disqualification. This is how this scheme worked:

• The disqualified directors were needed to submit all the statutory document with the RoC to get their DIN activated temporarily.
• The documents are submitted with the statutory fee prescribed in Section 403 of the Companies Act. 
• The small fee needed was only 30000 Rs. With an e-CODS form and so saved companies form hefty penalties. 

Present Day Remedies for relief

There were many directors and company owners who could not get advantage from CODS Scheme to revive their business and thus, their directors also missed the chance at the revival of their careers. The directors’ who failed to use this scheme for the removal of disqualification were left with two options.  

• Apply in the National Companies Law Tribunal and hope to get company revival order. Once the company was revived, they could apply for the removal of their disqualification and reactivation of DIN. In this case, when the NCLT passed the order of company revival, then RoC used to verify this order and relevant documents of the directors. This procedure could only be followed if the owners of the companies wanted to revive it. 
• The other option for directors who just wanted to activate their DIN without applying for the revival of their company was to apply for removal of disqualification in the respective High Court through a Writ Petition. The option of writing a Writ Petition to High court is attributed to constitutional rights conferred by Article 226 of the constitution to seek relief. 

How to Create a Writ Petition?

1. The disqualified director must undertake to use his constitutional right to file the Writ Petition under Article 226 of the Constitution in the respective High Court. The High Court should be chosen according to the area of jurisdiction of the company. In the application, the petitioner should include the following information,

• List of date and events of disqualification.
• Affix an urgent application with a Notice of Motion. 
• Should give reasonable justification to court for not filing the statutory documents that led to the disqualification of company and removal of its name from RoC. 
• Inform Court about the current status of the company and its directors seeking relief. 
• List out the companies in which the petitioner is serving as a director. 
• File a copy of the impugned Press Release or Notice issued by the RoC that lists out the names of the disqualified directors. 
• Personal information such as name address and designation of each Memo of parties should be mentioned in the petition. 
• A prayer cause should be attached to dismiss the publication issued by the RoC under Companies Act’s Section 164 (2).

2. After this, the High Court issues orders after hearing the option for reactivation of the DIN of directors. The directors need to file the copy of the order and all other statutory documents to the RoC to continue with the process p0f registration. 
3. Once the defaulter petitioner fulfils all the required documents and completes payment of all the penalties, the RoC will start the process of reactivation. 

Hire an Experienced Representative 

Taking legal help to file a Writ Petition in the High Court is necessary considering the technicalities involved in the process. There are lots of details that should be considered before drafting the petition and only an experienced professional can handle this kind of job. Also, an expert professional from a legal firm will not only help you in the filing of the petition but also help in representing your case in the Court. An advocate from a reputed firm will attend all the hearing of the Court and put arguments effectively to ask for relief from disqualification. Once the Court grants a favourable order, the expert will help you in following the complete procedure mentioned in the order. He will also help you file all the necessary documents in RoC before activation of DIN. 

If you are worried about the outcome of filing a Writ petition in high Court or confused whether it will bring positive results, then this should serve as good news to you. There have been many instances across High Courts from all over the country where director’s disqualification has been removed after hearing on Writ petition filed by them. The judiciary has granted interim relief to many directors and, quashed orders of RoC in some cases. 

The Court is in general agreement with the aggrieved petitioners on the following points:

• Retrospective Application of Companies Act: In some cases, the Court also found the act being applied retrospectively for disqualification of directors. The Courts deemed this kind of application of act as unjustified. 
• Contradictory Provisions in the Previous and New Act: The High Court finds it objectionable that the provisions of the Companies Act of 1956 did not have these regulations for the private companies and their directors, and so the new Act should not impose it on them in 2017.
• Order of RoC is Against Natural Justice: In most cases of directors’ disqualification, the aggrieved petitioners have mentioned that they never got any notice regarding their removal from RoC before the orders. Therefore, they never had a chance to clarify to RoC why they were not able to meet all the compliance standards of RoC. This is against the constitutional right of any individual as it doesn’t allow one person to show the cause of their actions and passes the order unilaterally. 

So, you can safely assume that the judiciary generally gives a favourable decision to directors who give valid reasons for defaulting. This should serve as a ray of hope for disqualified directors who are sceptical of filing writ petition for disqualification removal of their directorship. Just select an experienced legal firm that can represent your case efficiently and hope for a positive outcome.  

The post 5 Reasons Why Removal of Directors’ Disqualification is Necessary appeared first on MUDS.

• On what grounds directors are disqualified from the organisation?
• Hyderabad High Court’s perspective on such cases
• What was the impact of these new provisions in the act?
• What are the remedies for disqualified directors?

We will also understand the process of removal of a director from the perspective of a directors’ disqualification removal case in Hyderabad High Court. This will help us understand the general viewpoint od judiciary on cases related to the removal of directors’ disqualification. 

Different Grounds for Directors’ Disqualification

The Companies Act of 2013 required companies to furnish documents related to their finances and operations every year. Defaulting on submission of these documents for a continuous period of three years had stricter provisions of punishment compared to the previous version of Companies Act. The act considered the director of the company responsible for actions of the company and so, has a policy of strict actions against them in case their company defaults. 

The directors of the company are responsible for the smooth operation of the company and therefore they are responsible for any action taken by the company that leads to failure in complying with the directions of Government. The following points will give information on rules or issues which can lead to directors’ disqualification,

• Any directors of the company who has been convicted under section 188 by the Court regarding party transections during last five years. 
• If the directors fail to inform about their respective shares in any company held by them alone or in collaboration. 
• If any director has applied for his/her adjudication as an insolvent or if the directors’ application for the same is still pending. 
• If the director is convicted in any offence by the Court and sentenced to imprisonment for more than 6 months.
• If the organisation fails to redeem any debentures on their due date or fails to pay the interest due.
• If the company of the director has not filed its financial statements and annual returns for three years consecutively. 
• If the company has failed to repay the deposit made to it or pay interest on those deposits. 
• Failure to pay the declared dividend and continuing so for one year or more could also lead to disqualification of the company’s director. 

• If any Court confirms that the director is not of sound mind. 
• The Court also has the authority over the disqualification of directors’ who are undischarged insolvent. 
• If any court or tribunal has earlier ordered the disqualification of the director. 

Analysis of Hyderabad High Court’s Order 

Ever since the norms for director disqualification have come into place the high Court’s throughout India are using flurry of writ petitions being filed for relief. Let’s understand how filing these Petitions have helped the petitioners in their cases through a case study of M/s. Dr Reddy’s Research Foundation & Ors. Vs. The Ministry of Corporate Affairs & Anr. 

“In this case, it was argued by the sides that the action of disqualification was considered due to non-filing of financial statements from April 01, 2014. The three years from 2014 were about to be completed only on 31 March 2017 but the date for filing of annual financial returns for the said years was 30 October 2017. The court thus, director the MCA to reactivate the DINs of the directors and allowed them to file their financial statement of their defaulting company from 2011 to 2016.”

This case paved the way for other directors to file for relief in the High Court if they want removal of director disqualification without the revival of their company. Even after the CODS was over, filing of the Writ petition to remove directors’ disqualification is still the proven way to end the exile for directors. 

Ways in which Directors Can Seek Relief from Disqualification

During the initial few years of introduction of the new Companies Act, there were about 2.4 companies that were axed by the Ministry of Corporate Affairs (MCA) using the Companies Act in 2017. These companies started exploring the options for their revival and the directors hoped to get their DIN reactivated. When the MCA came up with the Condonation of Delay Scheme 2018, the company’s directors hoped to get their company revived without paying heavy penalties and apply for their disqualification removal.

It is the responsibility of the company’s director to file all the financial details of the company with the Ministry of Corporate Affairs every year as per the Companies Act. If the directors fail to submit these details for three consecutive years, then the Ministry could go on to remove the company from RoC and deactivate its directors’ DIN for five years. In the year 2018, the Central Government came up with Condonation of Delay Scheme (CODS) where directors could file the relevant document to get their DINs reactivated. The scheme involved the payment of a moderate fee and condonation of hefty penalties due to defaulting on a payment. Many companies at that time used this scheme for revival and removal of director disqualification. This is how this scheme worked:

• The disqualified directors were needed to submit all the statutory document with the RoC to get their DIN activated temporarily.
• The documents are submitted with the statutory fee prescribed in Section 403 of the Companies Act. 
• The small fee needed was only 30000 Rs. With an e-CODS form and so saved companies form hefty penalties. 

Present Day Remedies for relief

There were many directors and company owners who could not get advantage from CODS Scheme to revive their business and thus, their directors also missed the chance at the revival of their careers. The directors’ who failed to use this scheme for the removal of director disqualification were left with two options.  

• Apply in the National Companies Law Tribunal and hope to get company revival order. Once the company was revived, they could apply for the removal of their disqualification and reactivation of DIN. In this case, when the NCLT passed the order of company revival, then RoC used to verify this order and relevant documents of the directors. This procedure could only be followed if the owners of the companies wanted to revive it. 
• The other option for directors who just wanted to activate their DIN without applying for the revival of their company was to apply for removal of director disqualification in the respective High Court through a Writ Petition. The option of writing a Writ Petition to High court is attributed to constitutional rights conferred by Article 226 of the constitution to seek relief. 

How to Create a Writ Petition?

1. The disqualified director must undertake to use his constitutional right to file the Writ Petition under Article 226 of the Constitution in the respective High Court. The High Court should be chosen according to the area of jurisdiction of the company. In the application, the petitioner should include the following information,

• List of date and events of disqualification.
• Affix an urgent application with a Notice of Motion. 
• Should give reasonable justification to court for not filing the statutory documents that led to the disqualification of company and removal of its name from RoC. 
• Inform Court about the current status of the company and its directors seeking relief. 
• List out the companies in which the petitioner is serving as a director. 
• File a copy of the impugned Press Release or Notice issued by the RoC that lists out the names of the disqualified directors. 
• Personal information such as name address and designation of each Memo of parties should be mentioned in the petition. 
• A prayer cause should be attached to dismiss the publication issued by the RoC under Companies Act’s Section 164 (2).

2. After this, the High Court issues orders after hearing the option for reactivation of the DIN of directors. The directors need to file the copy of the order and all other statutory documents to the RoC to continue with the process p0f registration. 
3. Once the defaulter petitioner fulfils all the required documents and completes payment of all the penalties, the RoC will start the process of reactivation. 

Hire an Experienced Representative for Removal of Director Disqualification

Taking legal help to file a Writ Petition in the High Court is necessary considering the technicalities involved in the process. There are lots of details that should be considered before drafting the petition and only an experienced professional can handle this kind of job. Also, an expert professional from a legal firm will not only help you in the filing of the petition but also help in representing your case in the Court. An advocate from a reputed firm will attend all the hearing of the Court and put arguments effectively to ask for relief from disqualification. Once the Court grants a favourable order, the expert will help you in following the complete procedure mentioned in the order. He will also help you file all the necessary documents in RoC before activation of DIN. 

If you are worried about the outcome of filing a Writ petition in high Court or confused whether it will bring positive results, then this should serve as good news to you. There have been many instances across High Courts from all over the country where director’s disqualification has been removed after hearing on Writ petition filed by them. The judiciary has granted interim relief to many directors and, quashed orders of RoC in some cases. 

The Court is in general agreement with the aggrieved petitioners on the following points:

• Retrospective Application of Companies Act: In some cases, the Court also found the act being applied retrospectively for disqualification of directors. The Courts deemed this kind of application of act as unjustified. 
• Contradictory Provisions in the Previous and New Act: The High Court finds it objectionable that the provisions of the Companies Act of 1956 did not have these regulations for the private companies and their directors, and so the new Act should not impose it on them in 2017.
• Order of RoC is Against Natural Justice: In most cases of directors’ disqualification, the aggrieved petitioners have mentioned that they never got any notice regarding their removal from RoC before the orders. Therefore, they never had a chance to clarify to RoC why they were not able to meet all the compliance standards of RoC. This is against the constitutional right of any individual as it doesn’t allow one person to show the cause of their actions and passes the order unilaterally. 

So, you can safely assume that the judiciary generally gives a favourable decision to directors who give valid reasons for defaulting. This should serve as a ray of hope for disqualified directors who are sceptical of filing writ petition for disqualification removal of their directorship. Just select an experienced legal firm that can represent your case efficiently and hope for a positive outcome.  

The post Can Director Disqualification Due to Non-Filing of Financial Statement be Removed? appeared first on MUDS.

In this article, we will understand 

• What was the impact of these new provisions in the act?
• On what grounds directors are disqualified from the organisation?
• What are the ways to remove the director’s disqualification

We will also understand the process of removal of a director from the perspective of a directors’ disqualification removal case in Kolkata High Court. This will help us understand the general viewpoint of the judiciary on cases related to the removal of directors’ disqualification.

Grounds for Directors’ Disqualification

The companies Act of 2013 required companies to furnish documents related to their finances and operations every year. Defaulting on submission of these documents for a continuous period of three years had stricter provisions of punishment compared to the previous version of Companies Act. The act considered the director of the company responsible for actions of the company and so, has a policy of strict actions against them in case their company defaults. 

“Any company can have one or more number of directors working full-time or Part-time. All these directors will fall under the category of OFFICERS and strict actions will be taken against them if their companies fail to abide by the set rules.”

The directors of the company are responsible for the smooth operation of the company and therefore, they are responsible for any action taken by the company that leads to failure in complying with the directions of the Government. The following points will give information on rules or issues which can lead to directors’ disqualification,

• If the organisation fails to redeem any debentures on their due date or fails to pay the interest due.

• If the company of the director has not filed its financial statements and annual returns for three years consecutively. 
• Failure to pay the declared dividend and continuing so for one year or more could also lead to disqualification of the company’s director. 
• If the company has failed to repay the deposit made to it or pay interest on those deposits. 
• If any director has applied for his/her adjudication as an insolvent or if the directors’ application for the same is still pending.
• If any Court confirms that the director is not of sound mind.
• Any director of the company who has been convicted under section 188 by the Court regarding party transactions during the last five years. 
• The Court also has the authority over the disqualification of directors’ who are undischarged insolvent. 
• If any court or tribunal has earlier ordered the disqualification of the director. 
• If the directors fail to inform about their respective shares in any company held by them alone or in collaboration. 
• If the director is convicted in any offence by the Court and sentenced to imprisonment for more than 6 months. 

How to Remove Directors’ Disqualification?

During the initial few years of introduction of the new Companies Act, it was a common understanding that there was no remedy available for directors who are disqualified by RoC.  It was thought that waiting for the five years exile period to end is the only way to resume directorship work. However, there was another option which encompassed the revival of the disqualified company after striking off from RoC. Once the company is revived, its directors could also apply for the revival of their role. There were about 2.4 companies that were axed by the Ministry of Corporate Affairs (MCA) using the Companies Act in 2017. These companies started exploring the options for their revival and the directors hoped to get their DIN reactivated. When the MCA came up with the Condonation of Delay Scheme 2018, the company’s directors hoped to get their company revived without paying heavy penalties and apply for their disqualification removal.

New Ray of Hope! The Condonation of Delay Scheme, 2018

It is the responsibility of the company’s director to file all the financial details of the company with the Ministry of Corporate Affairs every year as per the Companies Act. If the directors fail to submit these details for three consecutive years, then the Ministry could go on to remove the company from RoC and deactivate its directors’ DIN for five years. In the year 2018, the Central Government came up with the Condonation of Delay Scheme (CODS) where directors could file the relevant document to get their DINs reactivated. The scheme involved the payment of a moderate fee and condonation of hefty penalties due to defaulting on a payment. Many companies at that time used this scheme for revival and removal of directors’ disqualification. This is how this scheme worked:

• The disqualified directors were needed to submit all the statutory documents with the RoC to get their DIN activated temporarily.
• The documents are submitted with the statutory fee prescribed in the Section 403 of the Companies Act. 
• The small fee needed was only 30000 Rs. With an e-CODS form and so saved companies form hefty penalties. 

What about the Companies not Using CODS?

There were many directors and company owners who did not use CODS Scheme to revive their business and thus, their directors also missed the chance at the revival of their careers. The directors’ who failed to use this scheme for the removal of disqualification were left with two options.  Either they should apply in the National Companies Law Tribunal and hope to get a company revival order. Once the company was revived, they could apply for the removal of their disqualification and reactivation of DIN. In this case, when the NCLT passed the order of company revival, then RoC used to verify this order and relevant documents of the directors. But this procedure could only be followed if the companies wanted revival in the first place. The other option for directors who just wanted to activate their DIN without applying for the revival of their company was to apply for removal of disqualification in the respective High Court through a Writ Petition. The option of writing a Writ Petition to High court is attributed to constitutional rights conferred by Article 226 of the constitution to seek relief. 

Courts Perspective on Writ Petitions

Let’s understand how filing a Writ Petition can help in the removal of directors’ disqualification and how Kolkata High Court responded to such petition through the case of Mukul Somany v. Registrar of Companies, West Bengal, 2018.

In this case, the petitioner was in the list of disqualified directors released by the RoC. The petitioner’s company was defaulter because of which he was disqualified from directorship. According to the Act, the petitioner could also not continue as director of other companies which were not defaulters. The removal of directorship came as some companies under the directors incorporated in the year 2010 were not filing annual returns for 3 years as they had not received the certificate of commencement of business. Hence, the directors were disqualified from the post of directors in any company they were working with. The order was effective from the 1^st November 2016, under section 164(2) of Companies Act. 

any company they were working with. The order was effective from the 1^st November 2016, under section 164(2) of Companies Act. 

View of Kolkata High Court:

The petitioners contended relying on the case of Arun Seth v. Union of India, that Section 164(2) of the Companies Act came into force since April 1, 2014, and so, it cannot be applied to incidents before the FY 2013-14. The respondents form the government said that the Section was brought to penalize defaulters from any period and not necessarily the defaulters after the Act came into force. Considering both arguments, the Kolkata High Court upheld petitioners’ arguments saying that the retrospective application of the Companies Act is unjustified. Further, the court said that the directors shouldn’t be removed from the directorship of companies which are working according to the guidelines of RoC. The Court in its final order stayed the disqualification of directorship of petitioners from the active company and allowed them to continue in them. However, the relief was not meant for the directorship of companies which were struck off.

This case paved the way for other directors to file for relief in the High Court if they want to remove disqualification without the revival of their company. Even after the CODS was over, filing of the Writ petition to remove directors’ disqualification is still the proven way to end the exile for directors. 

Procedure to File a Writ Petition

1. The disqualified director must undertake to use his constitutional right to file the Writ Petition under Article 226 of the Constitution in the respective High Court. The High Court should be chosen according to the area of jurisdiction of the company. In the application, the petitioner should include the following information,

• List of date and events of disqualification.

• Affix an urgent application with a Notice of Motion. 
• Should give reasonable justification to the court for not filing the statutory documents that led to the disqualification of the company and removal of its name from RoC. 
• Inform Court about the current status of the company and its directors seeking relief. 
• List out the companies in which the petitioner is serving as a director. 
• File a copy of the impugned Press Release or Notice issued by the RoC that lists out the names of the disqualified directors. 
• Personal information such as name address and designation of each Memo of parties should be mentioned in the petition. 
• A prayer cause should be attached to dismiss the publication issued by the RoC under Companies Act’s Section 164 (2).

1. After this, the High Court issues orders after hearing the option for reactivation of the DIN of directors. The directors need to file the copy of the order and all other statutory documents to the RoC to continue with the process p0f registration. 
2. Once the defaulter petitioner fulfils all the required documents and completes payment of all the penalties, the RoC will start the process of reactivation. 

Why Taking Legal Help is Necessary?

Taking legal help to file a Writ Petition in the High Court is necessary considering the technicalities involved in the process. There are lots of details that should be considered before drafting the petition and only an experienced professional can handle this kind of job. Also, an expert professional from a legal firm will not only help you in the filing of the petition but also help in representing your case in the Court. An advocate from a reputed firm will attend all the hearing of the Court and put arguments effectively to ask for relief from disqualification.  Once the Court grants a favourable order, the expert will help you in following the complete procedure mentioned in the order. He will also help you file all the necessary documents in RoC before activation of DIN. 

If you are worried about the outcome of filing a Writ petition in high Court or confused whether it will bring positive results, then this should serve as good news to you. There have been many instances across High Courts from all over the country where the director’s disqualification has been removed after hearing a Writ petition filed by them. The judiciary has granted interim relief to many directors and quashed orders of RoC in such cases. 

The Court is in general agreement with the aggrieved petitioners on the following points:

• Retrospective implementation of the Prospective Act: In some cases, the Court also found the act being applied retrospectively for disqualification of directors. The Courts deemed this kind of application to be unjustified. 
• Contradictory Provisions in Acts of 1956 and 2013:: The High Court finds it objectionable that the provisions of the Companies Act of 1956 did not have these regulations for the private companies and their directors, and so the new Act should not impose it on them in 2017.
• Ruling orders of RoC are Against Natural Justice: In most cases of directors’ disqualification, the aggrieved petitioners have mentioned that they never got any notice regarding their removal from RoC before the orders. Therefore, they never had a chance to clarify to RoC why they were not able to meet all the compliance standards of RoC. This is against the constitutional right of any individual as it doesn’t allow one person to show the cause of their actions and passes the order unilaterally. 

Based on these points you can safely assume that a well-drafted writ petition and representation in court by an expert advocate can lead to the removal of disqualification. Now the only problem here is to keep a positive outlook about the case and find a good legal firm to help in disqualification removal. Pick a reliable and trustworthy firm after thorough research to avail services related to disqualification removal.

The post Procedure for Removal of Director Disqualification | Latest Provisions appeared first on MUDS.

Are You a Victim of The MCA Action?

It is understandably quite unnerving if you are among one of those three lakh unfortunate Directors who lost their thriving careers due to strike off of their companies. Section 248 of the Companies Act, 2013, mandates that companies which default on financial compliances for three consecutive years should be struck off by the Registrar of Companies (ROC).

Worse was that you were removed as Director from all other active companies too and disqualified for 5 years from the day the company was struck off. This was a rather unjustified act by MCA as in most of the cases the directors were caught unawares, they had no inkling of what was coming their way!

Ways And Means To Remove Director Disqualification?

The government did realize that the companies which were struck off needed a viable solution at the earliest and as a result, opened a window temporarily, ‘Condonation of Delay’ in 2018. Many genuine companies were able to restore their status as ‘Active’ and the directors of such companies were successful in the removal of director disqualification.

Other companies who missed availing this window, took the route of NCLT for the revival of strike off company, making it easier for their directors to restore their career.

Still Looking For Restoration of DIN?

If your company has for some reason not taken any concrete step to become active once again, then the only option for you is to take individual and independent action. Companies Act 2013, surprisingly has no provision for relief for such Directors until and unless the company is revived and therefore, Directors like you are left helpless.

“If there is a problem then there has to be a solution, it is only a matter of being aware of which course to take!”
– Isha Malik (Company Secretary, MUDS Management Pvt. Ltd.)

Know Your Rights!

As per the provisions under Article 226 of the Indian Constitution, you can file a writ petition in the concerned High Court to seek relief. The most heartening news for you should be that since 2017 many of the aggrieved directors like you, have taken this legal recourse and have gained respite.

Delhi High Court in October 2017, has ordered stay on the matter, in the case of Srinivasan Sandilya & Others Vs Union of India. This gave a new lease of life to the concerned director’s career.

In a similar case, Bhagavan Das Dhananjaya Das Vs Union of India, the Madras High Court has called the order of the ROC illegal, arbitrary and devoid of merit and quashed it.

Many more such judgement from various High Courts of the country have given a new lease of life to many like you.

How To Draft A Writ Petition?

Being a legal process, it is essential that you seek the help of an experienced legal consulting firm which will take charge of the entire process. They will ensure that the matter is put up with details of all facts and figures.

The factors that stand in your favour are:

a.) Against the Principle of Natural Justice

Most of the struck off companies got no Notice, which is a mandatory clause, thus were caught unawares. The affected parties were not given a chance to clarify their stand or rectify the error, this is considered as against the principle of natural justice, which has been declared as a basic structure of the Indian Constitution by the Apex Court.

b.) Section 248’s Retrospective application

As the Companies Act, 2013, was implemented from 1 April 2014 and is a prospective one, therefore, applying any provision of it retrospectively is unjustified. The companies cannot be penalized for financial non-compliance in the year 2017. This amounted to flawed interpretation by the authorities.

c.) Against The Provisions of Companies Act, 1956

The private companies were governed by the Companies Act, 1956, (before the implementation of the Companies Act, 2013) which has no provision of disqualification of directors for non-compliance.

“At this juncture, the best option for the suffering directors like you is to take legal recourse and file a Writ Petition in the concerned High Court!”
– Kritika Chabbra (Market Analyst, MUDS Management Pvt. Ltd.

What Will a Legal Firm Do?

A consulting firm is equipped to deal with such matters in the shortest time with the best results as they have professionals on their team.

It will draft the writ petition, further file the matter in the High Court. The advocates will make appearances in the Court and accordingly plead the case. They will procure the final order from the High Court and submit it in the respective ROC’s office.

They will file the pending compliance related documents with the ROC and finally get the DIN activated and disqualification removed.

How To Know Which Firm Shall Be Most Competent?

You should shortlist a firm which has years of experience and an impressive track record in matters related to such cases. Only an experienced firm can do it in a time bound manner, bringing relief at the earliest.

An amateur company may mar your prospects of getting relief and would lead to a waste of time and money.

MUDS: The Most Reliable Consulting Firm!

An established consulting firm with tons of experience, MUDS has an impeccable record. It has helped 450+ directors to overcome their disqualification successfully and resurrect their career. MUDS has an exemplary team which is professionally capable and competent. With a pan India presence team, MUDS caters to clients from all corners of the country.

“If a problem is left unattended, it does not vanish, it turns into a CRISIS; keeping this in mind, you should act swiftly before it becomes too late! ”
-Shweta Gupta, Founder, and CEO, MUDS

The post Writ Petition For Removal of Director Disqualification appeared first on MUDS.

In its earnest drive towards taming ‘Corruption’ the Govt. took a very stern action on errant Companies and as a result in 2017 alone 2.2 lakh companies were struck off and 3.1 lakh Directors were barred for 5 years as their DINs were deactivated.

PROVISIONS FOR RESTORATION/REVIVAL:

There were certain provisions which can be availed to restore the name of removed companies.
1#: Under the provisions of section 252(3) of the Companies Act, an appeal can be filed to The Tribunal within 3 years from the date of order of the RoC. The company, the members, the workmen, or the creditors, anyone can appeal.
2#: Any aggrieved party can file an application to the National Company Law Tribunal before the expiry of 20 years from the publication of the Notice.
3#: A Writ Petition can be filed in the concerned court for a reprieve.
4#: A new window introduced as the Condonation of Delay Scheme, 2018, was a one-time settlement opportunity for all except those who have been struck off u/s 248(5).

On analysis, it’s clear that the companies were either ignorant or confused by the ambiguities in the Companies Act, 2013, which led to such a huge number of strike-offs.
Divya Gupta (Market Analyst, MUDS Management Pvt. Ltd)

RESTORATION THROUGH APPLICATION TO NCLT:

• All aggrieved companies who have been struck off can apply. It can be done by the
  – Company or
  – Any member or
  – Creditor or
  – Workman
• It had to be done within the period of 20 years from the publication of the Notice in the Official Gazette.

STEP BY STEP GUIDANCE:

STEP 1#: Rule 87A(1) Preparation of Petition- Form No. NCLT 9 will have to be filled for the petition.
STEP 2#: Rule 87A(2) Submission of the petition- A copy will have to be forwarded to the NCLT at least 15 days prior to the hearing.
STEP 3#: Rule 87A(3) Hearing by NCLT- NCLT will hear all parties and take note of the objections.
Thereafter, if the NCLT was satisfied that the concerned company was carrying on business at the time of being struck off, it can restore the name of the company.
STEP 4#: Rule 87A(4)- Directions by NCLT- After restoration NCLT shall direct that
– A certified copy had to be given to the RoC within 30 days from the date of the order.
– The RoC will then publish the said order in the Official Gazette.
– The applicant will bear the expenses.
– Company will also comply by filing the Financial Statements and Annual Returns as required by Companies Act,2013, in the stipulated time given by the RoC.
STEP 5#: Filing of order with RoC:
The Company then will have to file the copy of order with the RoC within 30 days from the date of the order.
STEP 6#: Publishing of order in Official Gazette-
The RoC then shall get the order published in the Official Gazette.
STEP 7#: The Final Step:
The company will comply with the requirements of the Companies Act, 2013, and file all the Financial statements and Annual Returns.

CASE-STUDY: NCLT reverses RoC’s order:

Poly Auto System Pvt. Ltd. Vs RoC Delhi, Principal Bench at New Delhi-
# Tribunal ruled that the RoC had to comply with all the procedures before striking off the name of the company from the register.
# The Tribunal opined that the Roc cannot take a casual approach towards any company without taking into consideration their assets and liabilities.
# The Tribunal ordered the restoration of the Company’s name after it had complied fully by filing all the documents. The RoC conceded as it had no objections towards the company after compliance.

CONCLUSION:

• The companies need to adhere to all the prescribed rules to keep itself safe and progressive.
• Once an action was initiated, they have to contact, consult and act in haste.
• They shall weigh all the options before taking a concrete step.
• Once the company is out of crisis, it had to treat this as a learning experience and be cautious at all times.

Problems are surmountable if diagnosed and treated early; the struck-off companies’ priority should be seeking the best advice and acting upon it swiftly.
Shweta Gupta (Founder and CEO, MUDS)

For any answers or help, please contact us:
call at 9599653306 or mudsmanagement@gmail.com

The post NCLT AND DIN RESTORATION: STEP BY STEP GUIDE appeared first on MUDS.

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