Dissolution - Simplification of the existing procedure for removal of the names of defunct Indian companies from the register of Companies under section 560 - Companies Law - Circular : No. 6 of 1991,

Circular : No. 6 of 1991, dated 19-2-1991. Subject:- Dissolution - Simplification of the existing procedure for removal of the names of defunct Indian companies from the register of Companies under section 560 1. I am directed to say that the procedure for striking off the names of companies was revised vide this Department s Circular No. 9/7/83-CL-III, dated 17-2-1987 (see Clarification 2). It is, however, felt that the said procedure requires to be suitably amended/liberalised so that the names of such defunct companies are struck off from the register of companies without unnecessary delay. It has, therefore, been decided that the conditions, specified in clause (c) of the said Circular dated 17-2-1987 need not be insisted upon and you may obtain an affidavit or indemnity bond from the Managing Director or the Whole-time Director of the company, to the effect that the company has no assets or liabilities and that the company is not carrying on any business. This may be accompanied by the audited accounts of the subject company. In this connection, it may be stated that the latest available balance sheet may be relied upon for this purpose and you may not insist upon the company to produce NIL balance sheet for the past years. Care may be taken where the company owes large sums of money to the investors/creditors and there are complaints against the company. This is, however, without prejudice to the procedural requirements of section 560 of the Act, including issue of notice under section 560(3)/(5) of the Act to be sent to the income-tax authorities also. 2. It may also be pointed out that where a request has been made under section 560 of the Act and you are satisfied that action under section 560 of the Act can be taken you should take expeditious action in accordance with the aforesaid liberalised procedure and in the meantime, prosecution for non-filing of annual return/balance-sheet etc., need not be resorted to. However, the matter has to be considered and decided on the merits of each case. In case of any difficulty, you may seek guidance of your Regional Director.