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CS Professional · Corporate Restructuring, Valuation and Insolvency

Strike Off and Restoration of Name of the Company and LLP

Strike off means the Registrar removes a company's name from the register, and the company stands dissolved on Gazette publication of the notice. Restoration means the NCLT orders the name back. To solve questions, identify the ground, the procedure, the effect, the time limit for appeal, and who can apply.

What this chapter covers

This chapter covers how a company or LLP that is defunct, or that wants to exit without a full winding up, is removed from the register, and how that removal can be reversed. The Registrar can act on his own under Section 248(1), or the company can apply itself under Section 248(2) after extinguishing all its liabilities.

The chapter has two halves. The first is removal: grounds, notice, representations, Gazette publication, dissolution and continuing liability. The second is restoration by the NCLT under Section 252, with different time limits for different applicants. It then extends to LLPs under Section 75 of the LLP Act, 2008 and to Producer Companies under Section 378ZP.

In the paper, this chapter sits with the exit routes of a company. Compare it with winding up, where Section 365 shows that the Registrar also strikes off the name after the final dissolution order. Strike off is the quick, low-cost exit. Winding up and insolvency liquidation are the formal ones. Examiners like to test the difference.

The chapter is short, rule-based and easy to prepare, so it is a reliable scoring area in a written, case-based paper. Questions give facts such as a company that did no business for two years, and ask whether the Registrar can strike it off, what happens to directors, and who can seek restoration and by when. If you know the sections and time limits exactly, you can write a full provision, analysis and conclusion answer. The same facts also appear in drafting and compliance questions, so the effort pays off in more than one paper.

Strike Off and Restoration of Name of the Company and LLP: topics in the order to study them

  1. 1Strike Off of Company Name under Section 248Start with the grounds and the Registrar's notice-and-Gazette process, because every other topic builds on it.
  2. 2Procedure and Conditions for Voluntary Strike OffNext, learn Section 248(2): special resolution or 75% consent, liabilities extinguished, and the exclusion of Section 8 companies.
  3. 3Effect of Strike Off and Liability of DirectorsOnce you know how a name is struck off, learn what follows: dissolution, continuing liability and the Tribunal's winding up power.
  4. 4Restoration of Company Name by NCLT under Section 252Restoration only makes sense after you know what strike off does, and it carries the time limits that are tested most.
  5. 5Strike Off and Restoration for Limited Liability PartnershipsStudy the LLP position after the company rules so you can compare the two and see what is shorter and what is different.
  6. 6Strike Off of Producer Company under Section 378ZPFinish with this special case, which has its own grounds, a 60-day appeal and a stay on the order.

How to prepare Strike Off and Restoration of Name of the Company and LLP

Prepare this chapter by sections and time limits. Most marks are lost on small details, so build a clean comparison and practise short written answers.

  1. Read Section 248 slowly and list the grounds in sub-section (1): no commencement within one year, no business for two preceding financial years without applying for dormant status, unpaid subscription with no declaration within 180 days, and no operations found on physical verification.
  2. Write the process as a chain: notice to the company and all directors, 30 days for representations, publication in the prescribed manner and the Official Gazette, striking off, Gazette notice, dissolution.
  3. Learn voluntary strike off separately: liabilities extinguished first, special resolution or consent of 75% members by paid-up capital, public notice by the Registrar, regulator approval for companies under a special Act, and no application by Section 8 companies.
  4. Make a table in your notes for Section 252: who can apply, the time limit and what the Tribunal checks. Appeal by an aggrieved person is within three years of the Registrar's order. The Registrar can apply within three years if the strike off was inadvertent or on incorrect information. A company, member, creditor or workman can apply within twenty years of the Gazette notice.
  5. Add LLP Section 75 and Producer Company Section 378ZP beside the company rules, and note each difference in grounds, hearing and appeal.
  6. Practise three or four fact-based questions. For each, write the provision, apply the facts, and state a one-line conclusion, as the paper expects.

Common mistakes in Strike Off and Restoration of Name of the Company and LLP

  • Mixing up the three restoration time limits under Section 252.

    Fix: Tie each limit to its applicant and start date: aggrieved person from the Registrar's order, the Registrar from the dissolution order, and company, member, creditor or workman from the Gazette notice.

  • Saying a struck-off company's directors are free of liability.

    Fix: State that under Section 248(7) the liability of directors, managers, officers and members continues and can be enforced, and the Tribunal can still wind up the company.

  • Applying voluntary strike off to Section 8 companies or ignoring liabilities.

    Fix: Always check three conditions: liabilities extinguished, the 75% consent or special resolution, and that the company is not a Section 8 company.

  • Stating the wrong consequence at the wrong point, for example dissolution at the time of notice.

    Fix: Write them in order. The notice of intention is not dissolution. The company stands dissolved only on Gazette publication of the notice of striking off.

  • Treating LLP and Producer Company rules as the same as for companies.

    Fix: Keep separate notes: LLP Section 75 needs a reasonable opportunity of being heard, and Section 378ZP gives a 60-day appeal with a stay of the order.

  • Giving a bare conclusion without applying the facts.

    Fix: Quote the provision, match each fact to a condition, and then conclude clearly.

Last-day revision: Strike Off and Restoration of Name of the Company and LLP

  • Section 248(1) notice goes to the company and all its directors, with 30 days to send representations.
  • Ground: no business or operation for two immediately preceding financial years and no dormant status application under Section 455.
  • Voluntary strike off needs liabilities extinguished first, then a special resolution or consent of 75% members in terms of paid-up share capital.
  • Section 248(2) does not apply to a company registered under Section 8.
  • A company under a special Act needs its regulator's approval attached to the application.
  • The notice is published in the prescribed manner and in the Official Gazette; the company stands dissolved on Gazette publication of the striking off notice.
  • Liability of directors, managers, officers and members continues as if the company had not been dissolved.
  • The Tribunal can still wind up a struck-off company.
  • Section 252(1): appeal within three years from the Registrar's order; the Registrar himself may apply within three years if the strike off was inadvertent.
  • Section 252(3): company, member, creditor or workman can apply within twenty years of the Gazette notice; the order is filed with the Registrar within 30 days.
  • LLP Section 75: Registrar may strike off if he has reasonable cause to believe the LLP is not carrying on business, after giving a reasonable opportunity of being heard.
  • Producer Company Section 378ZP: appeal to the Tribunal within sixty days, and the order does not take effect until the appeal is disposed of.

Strike Off and Restoration of Name of the Company and LLP practice questions

Strike Off and Restoration of Name of the Company and LLP in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Strike Off and Restoration of Name of the Company and LLP: frequently asked questions

When can the Registrar strike off a company under Section 248?

He can act when he has reasonable cause to believe a ground in Section 248(1) exists, such as no business commenced within one year or no operations for two preceding financial years. He must first send notice to the company and all directors and allow 30 days for representations.

Who can apply to the NCLT for restoration of a company's name?

An aggrieved person can appeal within three years of the Registrar's order. The Registrar can apply within three years if the name was struck off inadvertently or on incorrect information. The company, a member, creditor or workman can apply within twenty years of the Gazette notice under Section 252(3).

Does a struck-off company's director remain liable?

Yes. Under Section 248(7), the liability of every director, manager or other officer exercising management power, and of every member, continues and may be enforced as if the company had not been dissolved.

How is an LLP struck off?

Under Section 75 of the LLP Act, 2008, the Registrar may strike off an LLP's name if he has reasonable cause to believe it is not carrying on business or operation. He must first give the LLP a reasonable opportunity of being heard.

What is special about striking off a Producer Company?

Section 378ZP lets the Registrar strike off a Producer Company that fails to commence business within one year or ceases to transact business with members, after a show cause notice. A member can appeal within sixty days, and the order does not take effect until the appeal is disposed of.