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Can a company be struck off by the government?

Can a company be struck off by the government?

25-Mar-2026

Corporate

Answer By law4u team

Yes, a company can be struck off (removed) from the official register by the government under Indian law. This process is governed primarily by the provisions of the Companies Act, 2013 and is administered by the Ministry of Corporate Affairs (MCA) through the Registrar of Companies (ROC). Below is a detailed explanation: 1. What does “striking off” mean? Striking off is a legal process through which a company’s name is removed from the register of companies maintained by the Registrar of Companies. Once struck off, the company legally ceases to exist as a corporate entity, similar to dissolution. 2. When can the government strike off a company? The Registrar of Companies has the power to strike off a company in certain situations, including: A. Company has not started business If a company fails to commence its business within one year of incorporation. B. No business activity for 2 consecutive years If the company has not carried on any business or operations for two immediately preceding financial years and has not applied for dormant status. C. Failure to file statutory returns If the company continuously fails to file: Annual Returns Financial Statements for a long period, it may be treated as inactive or non-compliant. D. Subscribers not paid share capital If the initial subscribers have not paid the subscription amount within 180 days of incorporation and declaration is not filed. E. Company is found non-operational after inspection If ROC has reasonable cause to believe that the company is not carrying on business. 3. Procedure followed by the Registrar (Government) The ROC generally follows these steps: 1. Notice issued to the company and its directors asking for explanation. 2. Public notice published in the Official Gazette. 3. If no satisfactory response is received, the company name is struck off. 4. A final notification is published stating the company is dissolved. 4. Voluntary strike off by company Apart from government action, a company itself can apply for strike off voluntarily if: It has no liabilities, or It has settled all debts, and It is not carrying on business. This is done by filing Form STK-2 with ROC along with required documents. 5. Consequences of being struck off Once struck off: The company ceases to exist legally. Bank accounts are frozen. Business operations must stop. Assets may vest with the government. Directors may face disqualification if non-compliance is involved. Legal proceedings against the company may be affected. However, liabilities of directors and officers may still continue in certain cases. 6. Can a struck-off company be revived? Yes. A company can be restored by: Filing an appeal before the National Company Law Tribunal (NCLT) within the prescribed time. Showing that the company was active or strike-off was improper. If the tribunal approves, the company name can be restored to the register. 7. Penalties and risks for directors Directors of struck-off companies may face: Disqualification from acting as director in other companies. Penalties for non-filing. Legal liabilities for unpaid dues or fraud. 8. Important practical point Striking off does not automatically remove liabilities such as: Loans Taxes Employee dues Legal claims Creditors can still take action against responsible persons. In summary: Yes, the government can strike off a company if it is inactive or non-compliant with legal requirements, but there are procedures, notices, and remedies available including restoration through legal channels.

Answer By Ayantika Mondal

Dear Client, The government can remove a company from existence through the Registrar of Companies when the company fulfills all established statutory requirements of Section 248 of the Companies Act 2013. The Registrar can remove a company's name from the register under Section 248(1)(a) when the company fails to start business operations within its first year after incorporation. The company faces striking off under Section 248(1)(c) because it has not conducted any business activities during the last two financial years and it has not yet requested dormant company status under Section 455 of the Companies Act 2013. The Registrar needs to give proper notification to the company and its directors according to Section 248(1) and (4) which enables them to establish their case before he can initiate his enforcement procedures. The Registrar possesses the power to remove company records from the registry when he determines that a company must be dissolved and he issues an announcement in the Official Gazette which starts the dissolution process for the company. Section 249 of the Companies Act 2013 provides permanent protection to certain companies which face ongoing investigations and legal proceedings against them from being removed from official records. The legal system provides pathways for people to seek justice even after a company has been dissolved. An aggrieved company member creditor or workman may apply for restoration before the National Company Law Tribunal under Section 252(1) or Section 252(3) of the Companies Act 2013 within the prescribed limitation period if it is shown that the company was carrying on business or that striking off was unjustified. The Tribunal may restore the company's name to the register after satisfying itself that the company meets all requirements for restoration which results in the company existing as if its name had never been removed from the register. I hope the answer is helpful. For further queries, contact us. Thank You.

Answer By Anik

Dear client, Yes, the government can simply strike off a company using the Companies Act, 2013, by the Registrar of Companies (ROC). The ROC may delete the name of a business out of the register when there has been no business being commenced by the business within one year of the business being incorporated, there has been no business or operation being conducted by it or no annual returns or financial statements of a business in a period of two consecutive years. The ROC will normally dispatch a notice to the company and directors, where they have a chance to respond before striking off. Failure to provide a satisfactory response may result in the ROC striking off the name of the company and the company is considered dissolved as of the date of the order. But, even after striking off, the liability of directors and officers may exist in respect of acts performed before the dissolution. Also, a society or the company itself can seek restoration of the name of a company before the Tribunal (NCLT) within the stipulated period. If you have any query please feel free to contact us.