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CS Professional · Corporate Restructuring, Valuation and Insolvency · Strike Off and Restoration of Name of the Company and LLP

The Registrar of Companies finds that Sahyadri Dairy Producer Company Ltd has stopped transacting any business with its Members for over two years, although it still files returns. Which ground in Section 378ZP(1) applies?

The applicable ground is that the Producer Company has ceased to transact business with its Members, which Section 378ZP(1) lists as a ground for striking off. The one-year commencement ground does not apply because the company had already started business, and the mutual assistance route is a different situation.

  1. AFailure to commence business within one year of registration
  2. BThe company ceases to transact business with the MembersCorrect
  3. CBreach of mutual assistance principles, striking off under Section 248
  4. DFailure to hold a general meeting with equal voting rights under Section 378Z

Explanation

Section 378ZP(1) names ceasing to transact business with the Members as a separate ground for striking off. The company had commenced business earlier, so the one-year ground does not fit. Sub-section (2) concerns mutual assistance principles and not this fact pattern. Section 378Z deals with voting rights and is not a striking off ground.

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