Striking Off Of Companies Under Section 248.

12 Jan 2026 --
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1. Concept of Striking Off under Section 248

Striking off is an administrative dissolution of a company by the Registrar of Companies (RoC) when the company is not carrying on business or has become defunct.
It is a simplified alternative to winding-up, intended to clean the register of non-operational companies.

Unlike winding-up:

No liquidator is appointed

Assets are not realised by court process

Liability of directors and members survives

2. Statutory Framework

A. Companies Act, 2013

Section 248 – Power of RoC to remove name

Section 249 – Restrictions on application

Section 252 – Appeal and restoration

Section 447 – Punishment for fraud

B. Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016

3. Grounds for Striking Off (Section 248(1))

The RoC may strike off a company if:

Company has failed to commence business within one year of incorporation

Company is not carrying on business for two immediately preceding financial years and has not applied for dormant status

Subscribers have not paid subscription money

Company is not carrying on business as revealed after physical verification

4. Voluntary Striking Off by Company (Section 248(2))

A company may apply for striking off if:

It has extinguished all liabilities

Obtained consent of shareholders (special resolution or 75% consent)

Filed pending returns

Disqualifications (Section 249):

Change of name or office in last 3 months

Disposal of property in last 3 months

Ongoing prosecution or compounding

Compromise or arrangement pending

5. Procedure for Striking Off

A. By RoC (Suo Motu)

Notice to company and directors

Publication in Official Gazette

Consideration of objections

Final striking off notice

B. By Company

Board resolution

Shareholder approval

Filing of application and affidavits

Public notice

Gazette notification

6. Legal Consequences of Striking Off

Company stands dissolved

Certificate of incorporation deemed cancelled

Directors and members remain liable

Assets vest in Central Government

Striking off does not bar prosecution

7. Restoration of Company (Section 252)

Who may apply:

Company

Member

Creditor

Workman

Time limits:

3 years (appeal against RoC order)

20 years (by aggrieved party)

Grounds for restoration:

Company was active

Procedural violation

Pending liabilities or litigation

Prejudice to stakeholders

8. Director Disqualification and Liability

Disqualification under Section 164(2)

Personal liability for fraud

Liability for unpaid taxes and statutory dues

Prosecution under Companies Act and other laws

9. Judicial Interpretation and Case Laws (At Least 6)

1. Alliance Commodities Pvt. Ltd. v. Registrar of Companies

Principle:
Striking off without proper notice violates natural justice.

Relevance:
RoC must strictly follow Section 248 procedure.

2. Kusum Jain v. Registrar of Companies

Principle:
Restoration allowed where striking off caused prejudice to stakeholders.

Relevance:
Tribunal favours restoration if company is operational.

3. Rajendra Prasad Agarwal v. Registrar of Companies

Principle:
Mere non-filing does not automatically justify striking off.

Relevance:
RoC must assess business activity.

4. Gaurav Jain v. Registrar of Companies

Principle:
Striking off does not extinguish statutory or contractual liabilities.

Relevance:
Directors remain liable post-dissolution.

5. Mohammad Yunus v. Registrar of Companies

Principle:
Restoration permissible even after long delay if just and equitable.

Relevance:
Emphasises wide restorative powers under Section 252.

6. Saraswati Vidya Mandir Educational Society v. Registrar of Companies

Principle:
Educational and charitable activity constitutes “business” for Section 248.

Relevance:
Prevents arbitrary striking off of Section 8 companies.

7. Shailendra Kumar Jain v. Registrar of Companies

Principle:
Assets vesting in government does not defeat restoration rights.

Relevance:
Restoration revives all property and rights.

8. Kaynet Finance Ltd. v. Verona Capital Ltd.

Principle:
Restoration allowed to pursue legal claims.

Relevance:
Striking off cannot defeat substantive justice.

10. Comparison: Striking Off vs Winding-Up

Aspect	Striking Off	Winding-Up
Authority	RoC	NCLT
Nature	Administrative	Judicial
Liquidator	No	Yes
Asset realisation	No	Yes
Liability	Continues	Settled

11. Conclusion

Striking off under Section 248 is a regulatory housekeeping tool, not a substitute for insolvency or winding-up. Courts and tribunals have consistently held that:

Natural justice is mandatory

Liabilities survive dissolution

Restoration powers are wide and equitable

While striking off promotes ease of doing business, arbitrary or mechanical removal of companies is impermissible, and affected stakeholders retain strong remedial rights under Section 252.