20/09/2025
🚨 Case Study: When “No Business” Still Attracts Penalties!
A private company was incorporated with ₹30 Lakhs paid-up capital 💰.
👉 It never commenced business.
👉 No bank account was opened.
👉 No assets or liabilities were created.
👉 Eventually, it applied for strike-off under Section 248 and was dissolved.
Yet, even after dissolution, MCA issued penalty notices under Sections 128 & 206(5) for non-maintenance of books and non-filing of returns 📑.
💡 Key Insight:
Even a company with zero transactions must comply with annual filing obligations unless it formally applies for dormant status.
Strike-off does not erase past non-compliances. However, penalty proceedings post-dissolution are jurisdictionally questionable under Section 250.
⚖️ How We Helped at NGen Advisors
At NGen Advisors, we assisted the directors by:
1. Preparing a legal roadmap.
2. Drafting detailed representations citing lack of jurisdiction.
3. Exploring remedies through writ petition, appeal and compounding routes.
4. Ensuring directors were safeguarded from disqualification risks.
✅ Takeaway for Entrepreneurs & Directors:
1. Compliance is mandatory, even with no business activity.
2. Use the strike-off or dormant company route proactively.
3. Directors must protect themselves from unnecessary liability.
4. In genuine “no-operation” cases, professional advisory can help secure relief.
🔍 Lesson: In corporate law, “inaction” has consequences — but with the right strategy, solutions are possible...
