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As per the ScheduleIII AmendmentNotification_24032021 issued by the MCA on March 24th 2021, while filing the annual returns, every entity needs to disclose any transactions they have done over the year with companies that have been struck-off from the RoC list. These companies can be your partner companies, your vendors and so on.
Let us understand all about MCA Struck-Off Companies in these 5 important questions
1. Which notification requires companies to disclose their transactions with Struck off Companies?
The Ministry of Corporate Affairs (MCA) through Schedule III Amendment Notification released on 24th March 2021, has introduced several amendments to the Schedule III of the Companies Act 2013 that are applicable from 1st April 2021. (Schedule III deals with the way a financial statement is to be prepared by the companies.) In the said notification, under the ‘Y. Additional Regulatory Information, Rule (ix) is about Relationship with Struck off Companies.’
As per this disclosure requirement, where the company has any transactions with companies struck off under section 248 of the Companies Act 2013, or section 560 of the Companies Act, 1956, the company needs to disclose its transactions with such struck-off companies.
2. When do companies need to disclose their transactions with Struck off Companies?
The disclosure requirement of declaring transactions with MCA struck off companies is effective from April 1, 2021, i.e. for the financial statements prepared for FY 2021-22, and FY 2022-23 companies need to disclose relationships with Struck-off Companies under Additional Regulatory Information.
3. Which transactions need to be disclosed under the additional regulatory requirement of disclosing relationship with the Struck off Companies?
The following particulars need to be disclosed under the additional regulatory requirement of disclosing Relationship with the Struck off Companies
- Name of the struck off company
- Nature of transactions with the struck-off company
- Investments in Securities
- Receivables
- Payables
- Shares held by struck off companies
- Other outstanding balances (to be specified)
- Balance outstanding and
- Relationship with the struck off company (if any)
4. Why do companies get struck off?
Section 248 (5) of the Companies Act 2013 or Section 560 of the Companies Act, 1956
Section 248 of the Companies Act 2013 defines the Power of Registrar to Remove Name of Company from the Register of Companies (RoC) list. As per section 248 of the Companies Act 2013, the registrar of companies may remove the name of the company from the register on account for several reasons. The reason for removal can be
– When there have been no reimbursements of the subscription within 180-days from the company’s incorporation by the memorandum subscribers or
– When the company does not begin operations for a time period of about two years immediately prior to the financial years without making an application for getting the status of a dormant company or
– When a company files an application to the Registrar for removing its name from the RoC list.
Section 248 (5) of the Companies Act 2013: Section 248 (5) of the Companies Act 2013 pertains to the strike-off of a company from the MCA register. The section suggests that when the notice given by the registrar to the dormant companies expires, Registrar may strike off the name of the company from the register of companies and shall publish the notice thereof in the Official Gazette, and on the publication in the Official Gazette of this notice, the company shall stand dissolved.
Similarly, Section 560 of the Companies Act, 1956 also deals with the strike off provisions of a defunct company. Section 560 (5) of the Companies Act 1956 suggests at the expiry of the time mentioned in the notice given by the registrar to defunct companies, the Registrar may strike its name off the register, and shall publish notice thereof in the Official Gazette; and on the publication in the Official Gazette of this notice, the company shall stand dissolved: Provided that the liability, if any, of every director, the managing agent, secretaries and treasurers, manager or another officer who was exercising any power of management, and of every member of the company, shall continue and may be enforced as if the company had not been dissolved.
5. How do I check if a company has a strike off?
The financial year 2021-22 has come to an end, and companies have started preparing their Annual Returns. It becomes imperative for them to match their list of related parties throughout the year with the MCA Struck-off companies. MCA publishes list of Struck-Off companies by RoCs (STK-7) U/S 248(5). However, the searching for Struck-Off companies can be tedious and challenging because
– Currently, there is no single source to get the list of all the struck-off companies at one place.
– The lists are in pdf format hence are not system-readable and hence need manual intervention.
– The one by one search is cumbersome as every time captcha needs to be filled.
– And for companies with related parties in thousands, the manual processing is slow and prone to errors. In many cases, this may take you days; hampering your overall productivity.
Is there any solution to Search MCA Struck Off Companies efficiently?
The use of technology can simplify this mundane and time-consuming task of searching each company one-by-one and ease your work while you prepare your annual return. IRIS LookUp, an efficient AI-based public data search tool gives you error-free results within minutes!
IRIS is known for making the best use of technology to simplify your business life!
IRIS LookUp offers faster searching of public records which are otherwise available in multiple locations and multiple formats published ad-hoc by the authorities. It acts as a comprehensive directory of otherwise segregated public records.
How can IRIS LookUp help you?
- Search by Name or CIN: Search for a struck off company by its name or CIN
- Bulk Search: Do a bulk search for all your MCA struck-off companies in one-go
- Search across multiple ROCs Data: Get consolidated results for all your companies irrespective of which RoC they are registered with!
- Fast and Easy: Get started within 2 min. Just subscribe and upload list of parties (names or CIN)
- No Integration Needed: No technical integration and investment needed
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