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CS Executive · Company Law and Practice · Legal Status and Types of Registered Companies

Tarang Holdings Ltd has carried on no business or operation for the two immediately preceding financial years and has made no application for dormant status within that period. Which statement is correct?

The Registrar may send a notice to the company and all its directors of intention to remove its name, asking for representations within thirty days. Section 248(1)(c) applies where no business was carried on for two preceding financial years and no dormant application was made. Dissolution is not automatic.

  1. AThe Registrar cannot act because dormant status is only voluntary
  2. BThe Registrar may, on reasonable cause to believe this, send a notice to the company and all directors proposing removal of its name, seeking representations within thirty daysCorrect
  3. CThe company is automatically dissolved at the end of the second year
  4. DThe Registrar must first grant dormant status to the company

Explanation

Section 248(1)(c) lets the Registrar, on reasonable cause to believe a company has not carried on business for two immediately preceding financial years and made no dormant application, send a notice to the company and all directors proposing removal and inviting representations within thirty days. Dissolution follows only on Gazette publication of the strike-off notice.

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