1 September 2022
Issuance of the Companies (Removal of Names of Companies from the Register of Companies) Second Amendment Rules, 2022
 
The Ministry of Corporate Affairs (MCA) has amended 'The Companies (Removal of Name of Companies from the Register of Companies [ROC]) Rules, 2016.' On 24 August 2022, they introduced 'The Companies (Removal of Names of Companies from the ROC) Second Amendment Rules, 2022' (New Rule 2022). There are changes made to the format of FORM STK-1, STK-5, and STK-5A under Rule 3 and 7.
 
1. FORM STK-1 - Notice by Registrar for removal of Company name from the ROC as per New Rule 2022
 
As per Section 248 (1) read with Rule 7 of the New Rule 2022, the following check box shall be substituted:
  • the Company is not carrying out any business or operations, as revealed after the physical verification conducted under Sub-section (9) of Section 12.
 
2. FORM STK-5 - Public Notice issued by the Registrar for removal of a Company name from the ROC
 
As per Section 248 (1) read with Rule 7 of New Rule 2022, the following shall be inserted:
(iv) the following companies are not carrying out any business or operations, as revealed after the physical verification carried out under Sub-section (9) of Section 12.
M/s. ______________________________ (indicate names of companies)
M/s. ______________________________;
 
3. FORM STK-5A - Public Notice issued by the Registrar for removal of the name of a company from ROC
 
As per Section 248 (1) read with Rule 7 (1) of New Rule 2022, the following shall be substituted:

(iv) the Company is not carrying out any business or operations, as revealed after the physical verification carried out under Sub-section (9) of Section 12.
Our Comments
In line with an earlier notification released by the MCA pertaining to 'The Companies (Incorporation) Third Amendment Rule 2022,' the Registrar shall visit the Registered Office and prepare a report as per the prescribed format on finding that the Registered Office is unable to receive any communication/notice and does not carry any business operation, shall proceed with the removal of Company name from the ROC. With this notification, the MCA has stressed upon the significance of a Company's Registered Office.
Accordingly, the Registrar shall:
  • Tick the check box in FORM STK-1 with respect to physical verification as per Section 12(9) while issuing 'Show Cause Notice' to the Company.
  • While issuing public notice, mention the Company name in FORM STK-5, which fails to maintain the Registered Office as per Section 12 (9).
  • Issue public notice in FORM STK-5A, stating that the said Company is not carrying any business or operations, as revealed after the physical verification.
The MCA, in its vision document (2019- 2024), laid down the strategy to create a facilitator for the prominent governance of corporates. Therefore, with this notification, there is an emphasis on the physical presence for business and communication. However, the challenge ahead is how The MCA plans on executing this large-scale operation constituting Physical Verification of Registered Office. The process will have to be implemented smoothly keeping in mind the stakeholders for ease of doing business.

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