Conditions for Companies Filing Name Removal Application

The Ministry of Corporate Affairs vide its notification dated 10.05.2023 and by exercise of the
powers stated in Companies Act, 2013 hereby makes the rules further to amend the Companies
(Removal of Names of Companies from the Register of Companies) Rules, 2016.

• Ministry of Corporate Affairs (MCA) has issued Companies (Removal of Names of Companies from the Register of Companies) Second Amendment Rules, 2023.
• Ministry of Corporate Affairs (MCA) has introduced provisos to Rule 4 of the Companies Rules, 2016 which are as follows:

• “Company shall not file an application for the removal of name unless it has filed overdue financial statements and an annual return. Also, Companies need to ensure that these filings or compliances must be completed for that financial year in which the company ceases its business operations;
• In a case where Registrar has initiated the action and issued notice for the removal of name and the comapniy has not filed its finacial statement and annual return, in that case it shall file all pending financial statements and annual returns, before filing the application to Registrar.

• These amendments aim to enhance corporate transparency and compliance in India’s business environment. The MCA’s move emphasizes the importance of fulfilling financial reporting obligations and ensures that companies cannot evade regulatory action by filing for removal of their name from MCA. These rules are expected to strengthen the integrity of the financial system and safeguard the interests of stakeholders.

Himanshu Garg, Audit Associate, SW India