Corporate Restructuring, Valuation and Insolvency · Strike Off and Restoration of Name of the Company and LLP

Effect of Strike Off and Liability of Directors

Updated 11 October 2026 · Fact-checked

When the Registrar strikes off a company's name under section 248(5) and the notice is published in the Official Gazette, the company stands dissolved. Dissolution does not end liability. Under section 248(7), the liability of directors, managers, officers exercising management power and members continues and can be enforced as if the company had not been dissolved.

Understand Effect of Strike Off and Liability of Directors

A company is born on incorporation and dies on dissolution. Strike off is a quick, administrative way of ending a company's life. The Registrar removes the name from the register, and the company ceases to exist. No liquidator is appointed and no court order is needed.

The key moment is publication. Under section 248(5), at the expiry of the time in the notice, the Registrar may strike off the name unless cause to the contrary is shown. He must publish notice of the strike off in the Official Gazette. On that publication, the company stands dissolved. So dissolution is tied to the Gazette notice, not to the date of the Registrar's decision.

But dissolution is not an escape route. Section 248(7) says the liability of every director, manager or other officer who was exercising any power of management, and of every member of the dissolved company, continues and may be enforced as if the company had not been dissolved. Members are liable only to the extent their liability existed before, such as any unpaid amount on shares. The section does not create fresh liability. It keeps the old one alive.

The law also protects creditors in two ways. Before passing the order, the Registrar must satisfy himself that sufficient provision exists to realise amounts due to the company and to discharge its liabilities within a reasonable time. He may take undertakings from the managing director, director or persons in charge of management. Even with such undertakings, the proviso to section 248(6) says the company's assets must still be made available to meet liabilities after the date of the removal order.

Finally, section 248(8) says the Tribunal's power to wind up a company whose name has been struck off is not affected. This is the main contrast with winding up. In winding up, a liquidator realises assets and distributes proceeds before dissolution. In strike off, the company is removed first and creditors must rely on the preserved liability and the preserved assets. Section 252 also lets the Tribunal restore the name in specified cases.

Key rules to remember

Dissolution on strike off: Registrar's notice published in Official Gazette under s. 248(5) → company stands dissolved; Dissolution takes effect on Gazette publication. The Registrar may strike off only after the time in the notice expires and no cause to the contrary is shown.
Continued liability: s. 248(7): liability of directors, managers, officers exercising management power and members continues, enforceable as if the company had not been dissolved; It preserves existing liability. It covers officers who were exercising management power, not every employee.
Registrar's satisfaction before order: s. 248(6): sufficient provision for realising dues and discharging liabilities within a reasonable time; undertakings if necessary; Assets remain available for liabilities even after the removal order, despite the undertakings.
Power to wind up: s. 248(8): Tribunal's power to wind up a struck-off company is unaffected; A struck-off company can still be wound up by the Tribunal.
Restoration windows: s. 252(1): appeal within 3 years of Registrar's order; s. 252(3): application within 20 years from Gazette publication under s. 248(5); Restoration is covered in a separate topic, but know that dissolution can be reversed by the Tribunal.
Notice period: Notice to company and all directors; representations within 30 days of the date of notice (s. 248(1)); Notice under s. 248(1) or (2) must also be published in the Official Gazette (s. 248(4)).

How to solve Effect of Strike Off and Liability of Directors questions

Use this method for any question on the effect of strike off or on who remains liable after it.

1Identify the route: Registrar-initiated strike off under section 248(1) or voluntary application under section 248(2). Note whether the company is a section 8 company, which cannot use sub-section (2).
2Check the stage reached. Has the notice been issued? Has the time expired? Has the Gazette notice of strike off been published? Dissolution happens only on that last event.
3State the effect: the company stands dissolved on publication in the Official Gazette under section 248(5).
4Apply section 248(7): say whose liability continues, namely directors, managers, officers exercising management power, and members, and that it is enforceable as if the company had not been dissolved.
5Add creditor protection: the Registrar's duty under section 248(6), undertakings, and the proviso that assets stay available for liabilities.
6Mention remedies: Tribunal's power to wind up under section 248(8), and restoration under section 252 if the facts justify it.
7Apply to the facts and conclude clearly, for example whether the creditor can still recover from the director or member.

Quickest way: Four-line answer frame

When to use it: Use when the question is short, such as a 5-mark note or a quick case with a single issue.

Line 1: Gazette notice under section 248(5) means the company stands dissolved.
Line 2: Section 248(7) keeps the liability of directors, managers, officers and members alive.
Line 3: Section 248(6) proviso keeps assets available; section 248(8) keeps winding up open.
Line 4: Apply to the facts and add restoration under section 252 if relevant.

Common mistakes in Effect of Strike Off and Liability of Directors

Saying the company is dissolved as soon as the Registrar decides to strike off or issues the first notice.
Students merge the notice stage with the final order stage.
Fix: Remember the sequence: notice, 30 days for representations, strike off, Gazette publication. Dissolution occurs on the Gazette publication under section 248(5).
Claiming directors are free of all liability after dissolution.
Students treat dissolution like the death of a person, ending all obligations.
Fix: Quote section 248(7). Liability continues and is enforceable as if the company had not been dissolved.
Stating that strike off needs a liquidator and a final report.
Confusion with winding up under section 277 and section 365.
Fix: Strike off is administrative and has no liquidator. Winding up involves a Company Liquidator and a final report leading to a dissolution order.
Saying that members become liable for the company's entire debts.
Students read section 248(7) as creating new liability.
Fix: It continues existing liability. A member's liability stays what it was, for example any unpaid amount on shares.
Forgetting that the Tribunal can still wind up a struck-off company.
Students assume dissolution closes every door.
Fix: Cite section 248(8). Also mention restoration under section 252 where the facts support it.
Applying voluntary strike off under section 248(2) to a section 8 company.
Students overlook the exclusion in sub-section (3).
Fix: Section 248(3) says sub-section (2) does not apply to a company registered under section 8.

Worked examples

Example 1

Zenith Traders Private Limited was struck off by the Registrar under section 248 and the notice was published in the Official Gazette on 10 March. A supplier, Kiran Suppliers, is owed ₹4,50,000 and the directors say the company no longer exists so nothing is payable. Advise Kiran Suppliers.

Show the solution

Issue: what is the effect of the strike off, and can the debt still be pursued?
Rule: under section 248(5), on publication of the strike off notice in the Official Gazette, the company stands dissolved. Under section 248(7), the liability of every director, manager or other officer exercising power of management, and of every member, continues and may be enforced as if the company had not been dissolved.
Rule: the proviso to section 248(6) says the company's assets must still be available to pay liabilities even after the removal order. Section 248(8) preserves the Tribunal's power to wind up.
Application: the company stood dissolved on 10 March, so the directors' argument is right only about the company's existence. It is wrong about liability. Kiran Suppliers can enforce its claim against those liable under section 248(7) and against the company's remaining assets.
Further option: Kiran Suppliers may also apply for the winding up of the struck-off company, or seek restoration under section 252(3) as a creditor within twenty years of the Gazette publication, if the company was carrying on business or restoration is just.

Answer: The company stands dissolved from 10 March, but the directors' liability continues under section 248(7) and the company's assets remain available. Kiran Suppliers can pursue its ₹4,50,000 claim, and may seek winding up or restoration.

Example 2

Distinguish between the effect of strike off under section 248 and dissolution after winding up by the Tribunal.

Show the solution

Process: in strike off, the Registrar removes the name after notice and publishes it in the Gazette. In winding up, a Company Liquidator takes over assets, settles claims and submits a final report to the Tribunal, as shown in section 277(8).
Moment of dissolution: on strike off, the company stands dissolved on Gazette publication under section 248(5). In winding up, the Tribunal orders dissolution on receiving the final report. The Registrar then strikes off the name and publishes a notification (section 365 deals with the liquidator's final report route, with the order made by the Central Government or Tribunal).
Realisation of assets: in winding up, assets are realised and distributed before dissolution. In strike off, the Registrar only has to be satisfied about provision for liabilities, and assets remain available afterwards.
Liability: after strike off, section 248(7) expressly continues the liability of directors, officers and members. In winding up, liabilities are dealt with through the liquidation process before the company is dissolved.
Link: section 248(8) lets the Tribunal wind up a company whose name has been struck off, so the two are not mutually exclusive.

Answer: Strike off is an administrative removal by the Registrar with dissolution on Gazette publication and continued liability under section 248(7). Winding up is a supervised process with a liquidator, and dissolution follows the final report. A struck-off company can still be wound up under section 248(8).

Exam tips

Quote section 248(5) and 248(7) by number. Examiners reward the exact trigger (Gazette publication) and the exact consequence (continued liability).
In case questions, first fix the date of Gazette publication. It decides the date of dissolution and the 20-year restoration window under section 252(3).
Use a comparison table in your answer sheet for strike off versus winding up. Cover initiator, liquidator, asset realisation, dissolution trigger and liability.
Always end with the practical position of the creditor or director: what can be recovered, from whom, and by which remedy.
Do not stretch the rule. Say that liability continues as it existed, not that it is enlarged.

Practice questions from Strike Off and Restoration of Name of the Company and LLP

Effect of Strike Off and Liability of Directors: frequently asked questions

What is the effect of strike off of a company under section 248?

On publication of the Registrar's strike off notice in the Official Gazette, the company stands dissolved under section 248(5). It ceases to exist as a company. Its assets must still be available for liabilities, and the liability of directors, officers and members continues.

Are directors liable after the company is struck off?

Yes. Section 248(7) says the liability of every director, manager or other officer who was exercising any power of management continues. It can be enforced as if the company had not been dissolved. This preserves liability that already existed.

What is the difference between strike off and winding up?

Strike off is an administrative removal of the name by the Registrar, with no liquidator. Winding up is a formal process where a liquidator realises assets, pays creditors and reports to the Tribunal before dissolution. The Tribunal can still wind up a struck-off company under section 248(8).

Can a struck-off company be revived?

Yes, in the cases covered by section 252. An aggrieved person can appeal within three years of the Registrar's order, and the company, a member, a creditor or a workman can apply within twenty years of the Gazette notice. The Tribunal decides on the facts.