Struck off by the Registrar? Reply in 30 days, or restore within 3 or 20 years (ss.248-252)

The Registrar's notice arrives: the company is to have its name removed from the register. Directors often assume dissolution ends everything. It does not. Section 248 of the Companies Act 2013 lets the Registrar strike off a company on four live grounds, but only after a notice that allows thirty days for representations. Section 249 bars a voluntary application in certain situations. Section 252 then gives the Tribunal two routes to restore the name: an appeal within three years, and a separate application by the company, a member, a creditor or a workman within twenty years of the Gazette notice. Meanwhile s.248(7) keeps the liability of directors, officers and members alive "as if the company had not been dissolved".

Legal basis: Companies Act 2013, ss.248-252.

What to do now

Next step: read the notice date and diarise thirty days from it. Send the Registrar a written representation with copies of the relevant documents (s.248(1), Companies Act 2013).
Deadline: thirty days from the date of the notice (s.248(1)). If the company is already dissolved, the restoration windows are three years from the Registrar's order for an appeal (s.252(1)) and twenty years from the Gazette notice for an application under s.252(3).
Consequence of silence: at the expiry of the time in the notice, the Registrar may strike off the name "unless cause to the contrary is shown", and on Gazette publication the company stands dissolved (s.248(5)). Director, officer and member liability continues (s.248(7)).

Have a CA review your facts before you act or file.

The four grounds and the thirty-day reply

Section 248(1) applies where the Registrar "has reasonable cause to believe" that:

(a) the company "has failed to commence its business within one year of its incorporation";
(c) the company "is not carrying on any business or operation for a period of two immediately preceding financial years and has not made any application within such period for obtaining the status of a dormant company under section 455";
(d) the subscribers to the memorandum have not paid the subscription they undertook to pay at incorporation, and a declaration to that effect has not been filed within one hundred and eighty days of incorporation under s.10A(1); or
(e) the company "is not carrying on any business or operations, as revealed after the physical verification carried out under sub-section (9) of section 12", which is the registered-office verification.

Clause (b) is omitted, so there are four live grounds, not five. The dormant-company route in s.455 has to be used within the two-year period; it is not something to start after the notice arrives.

The Registrar must send a notice "to the company and all the directors of the company", stating the intention to remove the name and requesting "representations along with copies of the relevant documents, if any, within a period of thirty days from the date of the notice". The notice is also published in the prescribed manner and in the Official Gazette (s.248(4)). Bank statements showing real activity, the s.10A declaration, or proof of a pending dormant-status application are the kind of documents that answer a ground. Silence lets the Registrar proceed.

Voluntary strike-off: the 75% route

Section 248(2) is the orderly exit. A company may, "after extinguishing all its liabilities", by a special resolution or the consent of seventy-five per cent of members in terms of paid-up share capital, apply to the Registrar to remove its name "on all or any of the grounds specified in sub-section (1)". The Registrar then causes a public notice to be issued in the prescribed manner. Two further points:

A company regulated under a special Act must also obtain and enclose the approval of its regulator (proviso to s.248(2)).
Nothing in s.248(2) applies to a section 8 company (s.248(3)).

The threshold condition is "after extinguishing all its liabilities": creditors are dealt with first, and the application comes second.

When a voluntary application is barred (s.249)

An application under s.248(2) shall not be made if, at any time in the previous three months, the company:

(a) has changed its name or shifted its registered office from one State to another;
(b) has made a disposal for value of property or rights held by it, immediately before cesser of trade or otherwise carrying on of business, for the purpose of disposal for gain in the normal course of trading or otherwise carrying on of business;
(c) has engaged in any other activity except one necessary or expedient for making the application, deciding whether to do so, concluding the affairs of the company, or complying with any statutory requirement;
(d) has made an application to the Tribunal for the sanctioning of a compromise or arrangement and the matter has not been finally concluded; or
(e) is being wound up under Chapter XX of the Act or under the Insolvency and Bankruptcy Code, 2016.

Clause (e) matters most for a failing company: one already in winding-up or insolvency proceedings cannot use the voluntary route. A company that files in violation of s.249(1) is punishable with a fine that may extend to one lakh rupees (₹1,00,000) (s.249(2)), and the application must be withdrawn by the company, or rejected by the Registrar, as soon as the conditions are brought to his notice (s.249(3)). Note that clause (d) refers to a compromise matter that "has not been finally concluded", so the bar ends once the matter is finally concluded, not merely when the petition is filed.

Dissolution: Gazette, undertakings, surviving liability

At the expiry of the time in the notice the Registrar may, "unless cause to the contrary is shown by the company", strike off the name and publish notice in the Official Gazette, and "on the publication in the Official Gazette of this notice, the company shall stand dissolved" (s.248(5)). Dissolution therefore takes effect on Gazette publication, not on an internal order.

Before passing that order, the Registrar must satisfy himself that sufficient provision has been made for realising amounts due to the company and for discharging its liabilities within a reasonable time, and if necessary obtain undertakings from the managing director, director or other persons in charge of management (s.248(6)). The proviso is blunt: "notwithstanding the undertakings", the company's assets "shall be made available for the payment or discharge of all its liabilities and obligations even after the date of the order".

Section 250 adds that, from the date mentioned in the notice, the company ceases to operate as a company and its certificate of incorporation is deemed cancelled, "except for the purpose of realising the amount due to the company and for the payment or discharge of the liabilities or obligations of the company".

Dissolution does not shield people either. Under s.248(7), the liability of every director, manager or other officer exercising any power of management, and of every member, "shall continue and may be enforced as if the company had not been dissolved". Section 248(8) preserves the Tribunal's power to wind up a company whose name has been struck off.

Section 251 deals with misuse. Where a voluntary application under s.248(2) was made to evade the company's liabilities, to deceive creditors or to defraud any other person, the persons in charge of management are, even though the company has been notified as dissolved, jointly and severally liable to anyone who suffered loss or damage as a result, and are punishable for fraud under section 447 (s.251(1)). The Registrar may also recommend prosecution of those responsible for filing the application (s.251(2)).

Restoration: two Tribunal routes under s.252

Route 1: appeal within three years (s.252(1)). Any person aggrieved by the Registrar's order notifying the company as dissolved under s.248 may appeal to the Tribunal "within a period of three years from the date of the order of the Registrar". If the Tribunal is of the opinion that removal "is not justified in view of the absence of any of the grounds on which the order was passed by the Registrar", it may order restoration. Before passing any order the Tribunal must give a reasonable opportunity of making representations and of being heard to the Registrar, the company and all the persons concerned (first proviso).

Registrar's own application. The second proviso does not let the Registrar restore a name himself. If he is satisfied that the name was struck off "either inadvertently or on the basis of incorrect information furnished by the company or its directors", he may, within three years from the date of the order dissolving the company, "file an application before the Tribunal seeking restoration of name". The Tribunal still decides.

Route 2: application within twenty years (s.252(3)). If a company, or any member, creditor or workman, feels aggrieved by the name having been struck off, the Tribunal on an application "before the expiry of twenty years from the publication in the Official Gazette of the notice under sub-section (5) of section 248" may order restoration if satisfied that the company "was, at the time of its name being struck off, carrying on business or in operation or otherwise it is just that the name of the company be restored". The Tribunal may also give directions "for placing the company and all other persons in the same position as nearly as may be as if the name of the company had not been struck off".

For a creditor or member who discovers the strike-off years later, the twenty-year route is the one with the longer window. Which route fits, and on what facts, is a question for the Tribunal and your adviser.

After the order. The company must file a copy of the Tribunal's order with the Registrar within thirty days from the date of the order. On receipt, the Registrar causes the name to be restored in the register and issues a fresh certificate of incorporation (s.252(2)).

Why the s.249(1)(d) bar exists

A company that has a compromise or arrangement application pending before the Tribunal cannot also seek voluntary strike-off. The two proceedings point in opposite directions: a compromise assumes the company continues, strike-off assumes it ends. A company in genuine restructuring needs to choose one lane, see the compromise matter finally concluded, and only then consider an application under s.248(2), subject to the other s.249 conditions.

A file that reads well

A defensible file on a strike-off matter has these layers:

The trigger analysis: which s.248(1) clause is invoked and the evidence that answers it.
The thirty-day representation with documents.
For voluntary applications, proof that all liabilities have been extinguished.
A diary of the previous three months against each s.249(1) clause.
The Gazette notice, tracked to the dissolution date.
For a dissolved company, a note of the three-year and twenty-year restoration windows, counted from the dates in s.252.

Frequently asked questions

What triggers Registrar strike-off?
Four live grounds under s.248(1): not commencing business within one year of incorporation; no business or operation for two immediately preceding financial years without a dormant-status application under s.455; unpaid subscription with no s.10A declaration within 180 days; and no business or operations on physical verification under s.12(9). The notice allows thirty days to respond.

Can a company volunteer for strike-off?
Yes, after extinguishing all its liabilities, by special resolution or consent of members holding 75% in paid-up share capital (s.248(2)). Section 8 companies are excluded (s.248(3)), and regulated companies need their regulator's approval.

What blocks a voluntary application?
Any of the s.249(1) conditions in the previous three months: name change or inter-State shift of registered office, a disposal for value, other activity, an unconcluded compromise application to the Tribunal, or winding-up under Chapter XX or the IBC. A violating application is punishable with a fine up to ₹1 lakh (s.249(2)).

When is the company dissolved?
On publication in the Official Gazette of the strike-off notice (s.248(5)).

Do liabilities end with the company?
No. Assets remain available to meet liabilities after the order (proviso to s.248(6)), director, officer and member liability continues (s.248(7)), and the Tribunal can still wind up the company (s.248(8)).

How long is the restoration window?
Three years from the Registrar's order for an appeal by a person aggrieved (s.252(1)). Separately, a company, member, creditor or workman may apply to the Tribunal before twenty years from the Gazette notice under s.248(5) have expired (s.252(3)).

Can the Registrar restore the name himself?
No. Within three years of the dissolution order he may apply to the Tribunal if the strike-off was inadvertent or based on incorrect information (second proviso to s.252(1)); the Tribunal orders restoration.

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