Striking off the company as i am the only director left

Rakesh Shah (Querist) 18 April 2023 This query is : Resolved
Hello Experts ,
I am in a deadlock situation . Me and another Director had opened up the pvt Ltd company in 2015. (we were just 2 directors ). I am being a foreign national (OCI card holder) all the company affairs was taken care by the other director. We had opened up the company in 2015 but there was not a single transaction happend , the reason to open this company was to start something which never took place . Company have a bank account (still active with minimum balance ) there were no transactions since the start of the company. In 2021 the Director passed away due to COVID . I was not in India . Post COVID I came to India. Directly in 2023 January (after 2019 November) . In-between Directors death and till today CA have not serviced any company affairs . He contacted me and asked to pay all the back dated filing charges and compound penalty etc , Which is costing in few lakhs . I was totally un aware of anything . Now I am the only director of the company which never have made any business.

I want to shut down this company, but CA is saying we need to fulfill all the formalities and pay the xyz penalties, also his professional fees since 2021 till date . Kindly guide if I can appeal anywhere .

Thank you !

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Quick Summary

If you're the sole director of a private limited company in India that has never traded and now has no other directors, you're in a tricky spot. Even without business activity, statutory filings are mandatory. Your chartered accountant is likely correct that past due filings and penalties will need to be addressed before the company can be formally struck off the register. While there are provisions for striking off defunct companies, it typically requires fulfilling all compliance requirements first.

T. Kalaiselvan, Advocate (Expert) 19 April 2023
Section 560, of the Companies Act, 1956, deals with strike off provisions of a defunct company. Any defunct company desirous to strike off its name from the register of Registrar of company can apply in Form FTE for strike off its name from the register maintained by ROC as per Guidelines for ‘FAST TRACK EXIT MODE’ issued vide General Circular No. 36/2011 dated 7.6.2011. Similarly, ROC has also power to strike off any defunct company after satisfying himself of the need to strike off a defunct company and has reasonable cause. But before passing any order in this regard, an opportunity of being heard must be provided to the defunct company by following the due procedure u/s 560.
The Following are categorised as Defunct Company under the Companies Act 2013.

Companies that are not started any business within one year of its incorporation
Companies where the subscribers to the memorandum have not paid the subscription money within a period of one hundred and eighty days from the date of incorporation
Companies that are not carrying on any business or operation for a period of two immediately preceding financial years.
Registrar of Companies (ROC) has the power to strike off defunct companies from the register after giving due notice. Also the Directors of the Company Companies can make application strike off its name from the register of companies as a Defunct Company.
Once registered with the Registrar of Companies (ROC), Ministry of Corporate Affairs (MCA), it is mandatory for the Company to file the regular returns with Registrar of Companies and other statutory authorities in time.
If the Company is defaulted in filing of regular returns with the Registrar of Companies, the Company and its Director are liable to face the penalties and prosecution process as per Companies Act 2013.
There is no relaxation for compliance filing even if ‘Company is Not carrying any Business’. So, it is very important to ensure the filing in time or removal of Company’s name from the Registrar of Companies to avoid penalties and prosecution process.

Rakesh Shah (Querist) 19 April 2023
Thank you T. Kalaiselvan ji

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