Wonkar Club was formed as a Limited Liability Company under Section 8 of the Companies Act, 2013 with the object of promoting Gilli Danda by arranging introductory courses at district level and friendly matches. The club
CS Executive · Setting up of Business Entities and Closure · PYQS · December 2022
Wonkar Club was formed as a Limited Liability Company under Section 8 of the Companies Act, 2013 with the object of promoting Gilli Danda by arranging introductory courses at district level and friendly matches. The club has been earning surplus. Of late, the affairs of the company are conducted fraudulently and dividend was paid to its members. A, a member decided to make a complaint with Regulatory Authority to curb the fraudulent activities by cancelling the licence given to the company. Is there any provision under the Companies Act, 2013 to revoke the license ? If so, state the provisions.
Answer & Explanation:
According to Section 8(6) of the Companies Act, 2013, the Central Government may by order revoke the licence of the company where the company contravenes any of the requirements or the conditions of section 8 subject to which a licence is issued or where the affairs of the company are conducted fraudulently, or in violation of the objects of the company or prejudicial to public interest, and on revocation, the Registrar shall put 'Limited' or 'Private Limited' against the company's name in the register. However, no such order shall be made unless the company is given a reasonable opportunity of being heard. Hence, in the instant case, the Central Government can revoke the license given to Wonkar Club as Section 8 of the Companies Act, 2013, as the affairs of the company are conducted fraudulently and dividend was paid to its members which is in contravention to the conditions given under Section 8.
Topics: Company Law
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