Director Liability explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
No. When a company's name is struck off and it stands dissolved under section 248, the company stops operating, but the liability of the people who ran it and of its members does not disappear with it. This guide reads sections 248 to 252 and section 164(2) as per the Companies Act, 2013 in the Ministry's consolidated text (last updated 29 July 2022), and the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016 as notified in 2016. Later amendments should be checked.
Section 248(7) says the liability of every director, manager or other officer who was exercising any power of management, and of every member, continues and may be enforced as if the company had not been dissolved. A director also gives an indemnity bond and an affidavit when the company applies to strike itself off. Separately, a company that has not filed financial statements or annual returns for three continuous financial years can cost its directors a five-year disqualification under section 164(2)(a). A struck-off company can be restored by the Tribunal.
What happens to the company on dissolution
Under section 248(5), at the end of the time given in the notice, the Registrar may strike the name off the register unless cause to the contrary is shown, and on publication of the notice in the Official Gazette the company stands dissolved. Section 250 adds that the company then ceases to operate as a company and its certificate of incorporation is deemed cancelled from the date in the notice, except for realising amounts due to it and for paying or discharging its liabilities and obligations.
So dissolution ends the company's life, but it does not wipe out what the company owed. If you are a director weighing a voluntary exit or a clean-up after a notice, see our revival of a struck-off company service for the restoration side.
What survives: section 248(6) and (7)
Two sub-sections do the work.
- Section 248(6). Before passing the order, the Registrar must be satisfied that enough provision has been made to realise all amounts due to the company and to pay or discharge its liabilities within a reasonable time, and may obtain undertakings from the managing director, director or other persons in charge. The proviso says the assets of the company must still be made available to pay its liabilities even after the date of the order.
- Section 248(7). The liability of every director, manager or other officer who was 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) leaves the Tribunal's power to wind up a company whose name has been struck off untouched. Section 251 adds a harder edge: if a voluntary application under section 248(2) was made to evade liabilities or deceive creditors, the persons in charge of management are jointly and severally liable to anyone who suffered loss, even though the company is notified as dissolved, and are punishable for fraud as section 251(1)(b) provides by reference to section 447.
The indemnity bond and the affidavit
Before a voluntary application, see our guide on settling liabilities and returning funds before strike off. Where the company applies itself under section 248(2), rule 4(3) of the 2016 Rules (as notified) asks for, among other things, an indemnity bond by every director in Form STK 3 and an affidavit by every director in Form STK 4. In our reading of the forms:
- STK 3 is drawn on stamp paper and may be given individually or collectively. The directors state that the company has no assets and liabilities, and undertake to indemnify claimants for lawful claims arising in future, any person for losses that follow the striking off, and claimants for liabilities that had not come to the directors' notice.
- STK 4 is sworn individually by every director. It covers the director's particulars and addresses, that the company has no bank account, assets or liabilities, no dues to tax authorities, banks or Government bodies, and that no inquiry, prosecution, management dispute or stay order is pending, that the company is not a Section 8 company and is not barred by section 249.
A false statement here is the practical route into section 251 and into the director's own exposure. Rule 8 requires the bond and declaration of a foreign national or non-resident Indian to be notarised, apostilled or consularised.
Disqualification risk: section 164(2)(a)
The disqualification is separate from strike off. Section 164(2)(a) says a person who is or has been a director of a company that has not filed financial statements or annual returns for any continuous period of three financial years is not eligible to be re-appointed in that company or appointed in another for five years from the date the company fails to do so. The first proviso adds that a person appointed as a director of a company already in default does not incur the disqualification for six months from the date of appointment.
Rule 14 of the Companies (Appointment and Qualification of Directors) Rules, 2014 (as consolidated in the Ministry's e-book, consulted on 3 October 2026) requires every director to inform the company in Form DIR-8 about any disqualification before appointment or re-appointment, and requires the company to file Form DIR-9 with the Registrar, in the cases the rule lists, within the time the rule prints. Rule 11 lists the grounds on which a DIN may be cancelled or deactivated (duplicate DIN, wrongful or fraudulent means, death, unsound mind, insolvency, surrender with the declaration printed there); strike off of a company is not one of them. Rule 11(2) separately provides for deactivation where DIR-3 KYC is not filed under rule 12A.
Restoration: section 252
| Route | Who may apply | Period as printed | Ground |
|---|---|---|---|
| Appeal, s.252(1) | Any person aggrieved by the Registrar's order | Within three years from the date of the order | Removal not justified because the grounds for the order were absent |
| Application by the Registrar, second proviso to s.252(1) | The Registrar | Within three years from the order | Struck off inadvertently or on incorrect information |
| Application, s.252(3) | The company, or any member, creditor or workman | Before twenty years from publication of the notice under s.248(5) | Company was carrying on business or in operation, or it is otherwise just |
The Tribunal must give the Registrar, the company and the persons concerned a reasonable opportunity of being heard before an order under section 252(1). Under section 252(2) the company files a copy of the order with the Registrar within thirty days of the order, and the Registrar then restores the name and issues a fresh certificate of incorporation. Under section 252(3) the Tribunal may also give directions to place the company and others in the same position, as nearly as may be, as if the name had not been struck off.
Table: what ends and what survives
| Item | After dissolution |
|---|---|
| The company as an operating entity | Ends from the date in the notice (s.250) |
| The company's debts and its assets | Assets stay available to meet liabilities (proviso to s.248(6)); certificate treated as cancelled only for other purposes (s.250) |
| Director or officer liability | Continues, enforceable as if not dissolved (s.248(7)) |
| Member liability | Continues in the same way (s.248(7)) |
| Indemnity given in Form STK 3 | Remains a personal undertaking of each signing director |
| Fraud on creditors | Joint and several liability and punishment under s.251 |
| Tribunal's winding-up power | Not affected (s.248(8)) |
| Disqualification under s.164(2)(a) | Depends on the filing default, not on the strike off |
Worked example (invented names)
Delta Traders Private Limited filed nothing for the financial years 2021-22, 2022-23 and 2023-24. Its directors, Meera Joshi and Arun Pillai, apply for strike off with a statement of no liabilities. Months after dissolution, a supplier proves an unpaid invoice. Under section 248(7) the supplier can pursue Meera and Arun as officers exercising management and the members as the section allows; the bond they signed in Form STK 3 is a second basis. Separately, the three-year filing gap is the situation section 164(2)(a) describes.
Common mistakes
- Treating strike off as a way to close unpaid debts.
- Signing Form STK 3 or STK 4 on the strength of a statement of "nil liabilities" that was not checked.
- Forgetting that directors resigning before dissolution does not by itself change section 248(7), which covers those exercising management power.
- Ignoring the filing default that may already have started a disqualification period.
- Waiting past the three-year window of section 252(1) without noticing the separate twenty-year route.
Need help with a struck-off or soon-to-be-struck-off company?
If a company has been struck off and you need it back, or you are a director who wants to know where you stand, we can review the position and prepare the application. See our revival of a struck-off company service.
Key takeaways
- Section 248(7) keeps director, officer and member liability alive after dissolution.
- The Registrar can require undertakings, and the company's assets remain available for creditors.
- Forms STK 3 and STK 4 are personal undertakings and sworn statements by each director.
- Section 164(2)(a) disqualification follows non-filing for three continuous years, not the strike off itself.
- Restoration lies under section 252, with periods of three and twenty years as printed.
Read next
- Section 248: Striking Off Company Name
- Section 252: Revival and Restoration of a Struck-Off Company
- Section 164: Disqualification of Directors
- One Person, One DIN: Surrender, Deactivation and Rejection Reasons
Disclaimer: Based on the Companies Act, 2013 in the Ministry of Corporate Affairs consolidated text (last updated 29 July 2022), the Rules as consolidated in the Ministry's e-book and the other official texts named in this article, as consulted on 3 October 2026. Later amendments, notifications, circulars, forms and fees should be checked. Formats are general drafts to be adapted to the company's articles and facts. This article is general information, not legal advice; check the official text before acting.