After Strike Off: Next Steps for Directors and Assets

When a company is struck off the register under Section 248 of the Companies Act, 2013, all its assets (including bank balances, property, vehicles, and intellectual property) vest with the Central Government. This means the company no longer owns these assets. The Registrar of Companies (ROC) can sell or dispose of these assets, and the proceeds go to the government.

However, directors are not automatically relieved of their responsibilities. If the company had outstanding debts, creditors can apply to the National Company Law Tribunal (NCLT) to restore the company to the register. Once restored, the company can deal with its assets and liabilities as if it had never been struck off. Directors should note that the limitation period for such applications is generally 20 years from the date of publication of the strike-off notice.

Yes, directors can be held personally liable even after a company is struck off. Under Section 248(7) of the Companies Act, 2013, the liability of every director, manager, or other officer who was in office immediately before the strike-off continues and may be enforced as if the company had not been dissolved.

This means that if the company had unpaid statutory dues (such as GST, TDS, or PF contributions), directors can be personally pursued by tax authorities or other government departments. Similarly, if the company had entered into contracts or had pending litigation, directors may be personally liable for breach of contract or other claims. Directors should also be aware that the MCA can initiate prosecution for any offences committed before the strike-off.

A company can be restored to the register through two main routes. First, the company itself, any member, creditor, or the ROC can apply to the NCLT for restoration under Section 252 of the Companies Act, 2013. The application must be made within 20 years from the date of publication of the strike-off notice in the Official Gazette.

Second, if the company was struck off due to non-filing of annual returns or financial statements, the directors can file a simplified restoration application with the ROC under the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016. This is available only if the company was struck off within the last 20 years and the directors can show that the company was carrying on business or was in operation at the time of strike-off. The ROC will typically require all pending filings to be completed and any applicable fees to be paid.

Directors should immediately close all bank accounts of the struck-off company. Any remaining balance in the account will eventually be transferred to the government's Investor Education and Protection Fund (IEPF) or the Consolidated Fund of India. Directors should also ensure that all statutory registers, books of account, and other records are preserved for at least 8 years from the date of strike-off, as required under Section 128 of the Companies Act, 2013.

If the company had any physical assets (such as office equipment, furniture, or vehicles), directors should not dispose of them without proper legal advice. These assets technically belong to the government, and unauthorized disposal could lead to criminal proceedings. Directors should consult a professional to determine the best course of action, which may involve applying for restoration or seeking a court order to deal with the assets.

Yes, a struck-off company can be revived specifically for the purpose of defending or pursuing litigation. The NCLT has the power to restore the company to the register under Section 252(3) of the Companies Act, 2013, even if the company was struck off years ago. This is particularly relevant if the company was a party to a lawsuit at the time of strike-off, or if a creditor files a claim after the strike-off.

Once restored, the company is deemed to have continued in existence as if it had never been struck off. This means that all legal proceedings that were pending at the time of strike-off can be resumed, and new proceedings can be initiated against the company. Directors should note that the restoration order may impose conditions, such as payment of costs or compliance with certain filing requirements.

If your company has been struck off and you need to deal with its assets or liabilities, consult a company secretary or a corporate lawyer. They can guide you on the appropriate restoration procedure or advise on how to handle personal liability issues. Do not attempt to dispose of company assets or ignore statutory demands without professional advice.

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This page provides preliminary information. It is not legal advice. For your matter, consult a qualified professional.