MCA Orders Strike-Off of Company for Failing to File Declaration of Commencement of Business Under Section 10A [Read Order]

The Ministry of Corporate Affairs (MCA) has struck off a company for failing to comply with Section 10A of the Companies Act, 2013, which mandates a declaration of commencement of business. The order was passed by the Registrar of Companies (RoC), Pune, under Section 248(1)(a) of the Act, which empowers the authority to remove companies that have not commenced business within the statutory timeframe.

As per the details in the RoC order, Vasuki Infrastructure Private Limited was incorporated on November 26, 2020. Despite being allotted a Corporate Identity Number (CIN) and the certificate of incorporation, the company failed to file the declaration required under Section 10A of the Companies Act, which confirms that the company has received its share subscription money and commenced business.

The RoC observed that no such declaration was filed within the 180-day period prescribed under law. Moreover, no satisfactory response or documentation was submitted by the company despite the issuance of notice under Form STK-1, which invited objections to the proposed strike-off.

In the absence of any response and due compliance, the Registrar proceeded to strike off the name of the company from the Register of Companies, dissolving it.

Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here

Section 10A was introduced via the Companies (Amendment) Act, 2019 and made effective from 2nd November 2018. It requires every company incorporated on or after that date to file a declaration, within 180 days of incorporation confirming that It has received the subscription money from its shareholders, and that it has commenced its business.

Failure to file this declaration allows the RoC to initiate strike-off proceedings under Section 248(1)(a), treating the company as one that has not commenced business since incorporation.

The order clearly states that the liability of directors, officers, and others in charge shall not be extinguished. This means they may still be held accountable for any legal or regulatory non-compliance even after the company’s dissolution.

Additionally it was also held that if the company believes the strike-off was in error or wishes to revive itself, it has the option to approach the National Company Law Tribunal (NCLT) under Section 252 within a period of three years.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates