The Department of Industry has struck off 21 companies from the list of incorporated companies maintained by the Registrar of Companies starting February 7 this year.
A few of the companies deregistered include Rangshar Industries Private Limited, QED Consulting Group Private Limited, Bhutan Bricks Private Limited, Rirab Construction Company Private Limited and Phuentsholing Export Private Limited.
Companies have to report all the affairs of their last one year to the office of the registrar of companies in the form of annual return which includes audited financial statements, director’s annual report to shareholders and the form of annual report as mandated by section 267 of Companies Act 2016.
The Registrar of Companies, under the Department of Industry, Karma Yeshey, said that during the life of a company, if a company fails to submit their annual returns or report for three consecutive years, then it constitutes an act of being a defunct company, unless proven otherwise by the company management.
“To assess the operational status of the company’s business the due procedure under Section 367 to 369 is followed at the end of three years of non-reporting,” he said, adding that after failure to report in the third year, the registrar makes the decisions to strike off exercising the power under section 370.”
The department issues three different notices over a period of three months to the companies. The first notice is given to find out if the company is in operation with an opportunity to respond within one month and then if there is no response, a second notice is issued within three months for response along with a warning that if they fail to respond, at the end of three months, the company will be declared defunct and stand temporarily suspended of its status as a corporate entity under the Companies Act.
Karma Yeshey said that the legal effect of the strike off is temporary suspension of a company’s separate legal entity status and it cannot represent itself as or operate as a company from that day onward until they have administratively restored their corporate status with application made to the registrar.
He mentioned that to restore the company, the procedure is to file an application to the registrar for administrative restoration with documentary evidence to prove the commercial operation of the company for the past three years, audited financial statements for past three years, annual director’s report for past three years, proof of auditors appointed for the same period and proof of payment of all applicable fees and penalties.
He said from the day of submission of all the documents and evidence, the company will be reinstated with its full rights of operating as a corporate entity.
“This is not a corporate death but a temporary suspension procedure to confirm the corporate status or its operation. This procedure may lead to corporate liquidation or corporate reinstatement depending on the actual status of the company,” he said.
Dechen Dolkar from Thimphu