Company Strike Off Under Section 248 — Complete Procedure Guide 2026

What Is Strike Off?

Strike off means the removal of a company's name from the Register of Companies maintained by the Registrar of Companies (ROC). Once struck off, the company ceases to exist as a legal entity — it cannot operate, enter contracts, hold assets, or sue/be sued. Strike off can be initiated by the ROC (compulsory — for non-compliant/defunct companies) or by the company itself (voluntary — when the company wants to close down without going through the full winding-up process at NCLT).

Since 2017, the MCA has struck off over 5 lakh companies — the largest corporate clean-up drive in Indian history. Most were struck off for non-filing of annual returns and financial statements for 2 or more consecutive years.

Two Routes to Strike Off

Route 1: ROC-Initiated Strike Off — Section 248(1)

The ROC can strike off a company's name if the ROC has reasonable cause to believe that:

(a) The company has failed to commence business within ONE year of incorporation AND has not filed INC-20A (declaration of commencement of business).

(b) The company is NOT carrying on any business or operation for the immediately preceding TWO financial years AND has not made any application for dormant status under Section 455.

(c) The subscribers to the memorandum have not paid their subscription AND a declaration to this effect has not been filed within 180 days of incorporation.

(d) The company is not carrying on any business despite being an active company on the register.

Process: ROC sends notice (STK-1) to the company and its directors → company must respond within 30 days with reasons why it should NOT be struck off → if no satisfactory response: ROC publishes notice in the Official Gazette and a newspaper → waits 30 days for objections from creditors/stakeholders → if no valid objection: strikes off the company (STK-7 order).

Route 2: Voluntary Strike Off — Section 248(2)

The company itself applies for strike off when it wants to close down. This is the simpler alternative to winding up through NCLT (which can take 1-3 years and costs Rs. 5-15 lakh).

Eligibility conditions:

(a) Company has not commenced business since incorporation, OR

(b) Company is not carrying on any business for the preceding 1 year

(c) Company has NO outstanding liabilities (all debts, loans, obligations must be cleared)

(d) Company has NO pending litigation, proceedings, or regulatory action

(e) All assets have been disposed of or accounted for

(f) Income tax assessment must be completed for all years up to the date of application (or undertaking given)

Process:

Step 1: Hold Board Meeting — pass resolution to strike off. Authorize a director to file.

Step 2: Obtain affidavit from all directors — stating no pending liabilities, no ongoing litigation, declaring all facts truthfully.

Step 3: Obtain indemnity bond — directors jointly and severally indemnify against any liabilities that may arise after strike off.

Step 4: File Form STK-2 with ROC — attach: special resolution of members, statement of accounts (not older than 30 days), director affidavits, indemnity bond, consent of creditors (if any creditors waive their claims).

Step 5: ROC publishes notice in Official Gazette and newspaper — 30-day objection period.

Step 6: If no objections: ROC passes strike off order (STK-7) — company's name removed from register.

Timeline: 3-6 months from filing STK-2 to final strike off order.

What Happens to Directors When a Company Is Struck Off?

Section 164(2) disqualification: When a company is struck off for non-filing of annual returns/financial statements for 2+ consecutive years, ALL directors who were on the board during the period of default are DISQUALIFIED from being appointed as director in ANY company for 5 years from the date of strike off. Their DINs are deactivated across ALL companies — not just the struck-off company.

This is the most devastating consequence — a director who is also on the board of other active companies suddenly cannot sign any MCA form for those companies either. Over 3 lakh directors have been disqualified through this provision.

Director disqualification can be challenged: File appeal before NCLT within 30 days of disqualification. Courts have held that directors who were not in control (minority directors, nominee directors) should not be automatically disqualified.

Restoration of Struck-Off Company

A struck-off company can be restored (revived) through two routes:

Section 252 — Application to NCLT

The company, its members, creditors, or workmen can apply to NCLT for restoration within 20 years of strike off (extended from 15 years by amendment). NCLT can order restoration if satisfied that the company was carrying on business at the time of strike off OR if it is just and equitable.

NCLT application requires: (a) petition with grounds for restoration, (b) all pending annual filings (AOC-4, MGT-7) for the entire default period with additional fees, (c) all pending income tax returns, (d) explanation for non-filing during the default period, (e) payment of all government fees and penalties. Cost: Rs. 1-5 lakh (including legal fees and outstanding ROC fees with penalties). Timeline: 3-12 months for NCLT hearing and order.

Section 252(3) — Application by ROC/Other Person

ROC can also apply to NCLT if the ROC is satisfied that the strike off was done erroneously or the company should be restored in public interest.

What Happens to Company Assets After Strike Off?

Section 248(6): All movable and immovable property of the struck-off company vests in the Central Government (through the Registrar). This includes: bank accounts (frozen), real estate (title transferred to government), intellectual property (patents, trademarks), and any other assets.

If the company is restored through NCLT: assets are returned. But during the struck-off period, the company cannot deal with its assets — bank accounts remain frozen, property cannot be sold, and contracts cannot be enforced.

Strike Off vs Winding Up — When to Use Which