What is the Meaning of Struck Off Companies?
The term struck-off, on the other hand, implies that the Registrar of Companies (ROC) has removed the name of a company from the register of companies for certain reasons. For example, this could happen due to non-compliance with certain laws or regulations. Once the register removes the company’s name, the company’s legal existence is lost. As a result, it cannot continue its operations until it restores its name in the register.
The striking of a company’s name can happen either voluntarily; furthermore, it can occur due to a compulsory strike-off by the ROC.
Voluntary Striking Off:
To clarify, in this case, the company decides to shut down its operations and liquidate the company. Additionally, the company shall file an application with the ROC for dissolution and the consequent striking off of the name of the company.
Compulsory Striking Off:
For instance, if the company fails to comply with the requirements of the law or any rules or regulations made henceforth, the ROC may strike off the name of the company from the register considering the intensity of the contravention. In such cases, the company has no option but to comply with legal formalities to restore its name.
Disclosure Requirements for Struck-Off Companies
While we understood the struck-off meaning, it is equally important to understand the associated disclosure requirements. Furthermore, as per the requirements of the Ministry of Corporate Affairs (MCA), companies need to disclose their transactions with struck-off companies. This disclosure requirement is effective beginning from FY 2021-22. In detail, they shall disclose their relationships with the company as part of additional regulatory information.
The following are the disclosures required:
- Name of the company being struck off
- Nature of transactions. This can include:
- Receivables
- Investment in securities
- Payables
- Shares held by the struck-off company
- Any outstanding balance
3. Balance outstanding
4. Relationship with the company
Steps to Identify Struck-Off Company on MCA
To identify struck-off companies from the register firstly, you can visit the Ministry of Corporate Affairs website. Follow the below steps to identify:
- Visit the MCA portal
- Navigate as follows: MCA Services >> Master Data >> View Company / LLP Master Data
- Add a company name or CIN number and enter the captcha
- Check the status of the company.
How Firmway Identifies Struck-Off Companies?
Finding the companies on the MCA website can be cumbersome and time-consuming, especially if you transact with multiple companies. The solution, therefore, is to identify such companies with Firmway!
Firmway allows for bulk searches using the list of struck-off companies; consequently this helps in determining if it hasn’t been struck off. Following are the steps to identify companies using Firmway:
- Download the template, Input & upload the party list with the Name or PAN
- Automate Matching the Name with the list shared by MCA
- Highlight the risk associated in the percentage
- Automate scrutinize the data highlighted with the MCA list for 100% verification
Firmway has a data repository storing 1-year data. Its software checks and share the probability % and helps you identify how many companies are there in the list of struck-off companies. Ease your search with Firmway and ensure accurate disclosures!
