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

The Registrar struck off Delta Metals Pvt Ltd under Section 248 and the Official Gazette notice appeared on 15 June 2024. Later, Ravi, a former director, finds that his personal guarantee for a loan of the company may now be enforced. Which statement is correct?

Liability continues. Under Section 248(7), the liability of every director, manager or other officer exercising management powers, and of every member, survives dissolution and may be enforced as if the company had not been dissolved. Restoration of the name is not a precondition for such enforcement.

  1. AThe company's dissolution ends the liability of every director and member
  2. BLiability of directors, managers, officers exercising management powers and members continues and may be enforced as if the company had not been dissolvedCorrect
  3. COnly the liability of members continues, not that of directors
  4. DLiability continues only if the Tribunal restores the company's name

Explanation

Section 248(7) provides that the liability of every director, manager or officer exercising management power, and of every member, continues and may be enforced as if the company had not been dissolved. This does not depend on restoration, and it covers directors as well as members.

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