In March and April 2017, MCA, through various ROCs, have notified the list of companies, which have been served notice for removal of names from MCA and has been provided a timeline of 30 days to respond in contrary.
Following 2 are the major criteria, based on which, scrutiny has been done by MCA:
- Companies which have not commenced business within one year of their incorporation.
- Companies which have not been carrying on any business or operation for a period of two immediately preceding financial years and have not made any application within such period for obtaining the status of dormant company under section 455.
Overall, we highly recommend that all companies should verify their names, as based on our initial analysis, we found that few companies, which are regular in filing their returns to MCA, have also been listed under the notification.
However, the % of regular filing companies are less than 1%.
This notification is aimed to remove all paper companies, which are mostly used for money laundering or other fraudulent activities. Also, we recommend, that every entity which are connected to these companies, in any of the following manner, should be more cautious and take necessary precautions to avoid any possible damage:
- Vendor
- Customers
- Borrower (Bank and NBFCs)
- Investor
- Any other stake holder
The problem here is, most of ROCs have published it in Scanned PDF format, where, it is difficult to search for any company, among the range 100 to 1000 pages.
We would also be publishing various research and analysis paper based on the companies listed under the notification.
Just make sure that if you are actually doing business, your company and your related parties are not getting Strike Off…!!!
#InstaFinancials #STK5
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