Section 248: Power of Registrar to remove name of company from register of companies
This section is for the process of removing a company's name from the register of companies due to inactivity or other grounds.
The section, clause by clause
What the section says
In plain terms
(1)Where the Registrar has reasonable cause to believe that—
The Registrar can remove a company's name from the register if it has not started business within one year of incorporation, or has not operated for two financial years, or its subscribers have not paid their subscription, or it is not operating as revealed by physical verification.
(1)(a)a company has failed to commence its business within one year of its incorporation;4[or] 5* * *
(1)(c)a company is not carrying on any business or operation for a period of two immediately preceding financial years and has not made any application within such period for obtaining the status of a dormant company under 6[section 455; or] *
(1)(d)the subscribers to the memorandum have not paid the subscription which they had undertaken to pay at the time of incorporation of a company and a declaration to this effect has not been filed within one hundred and eighty days of its incorporation under sub-section (1) of section 10A; or
(1)(e)the company is not carrying on any business or operations, as revealed after the physical verification carried out under sub-section (9) of section 12.]
(1)he shall send a notice to the company and all the directors of the company, of his intention to remove the name of the company from the register of companies and requesting them to send their representations along with copies of the relevant documents, if any, within a period of thirty days from the date of the notice.
(2)Without prejudice to the provisions of sub-section (1), a company may, after extinguishing all its liabilities, by a special resolution or consent of seventy-five per cent. members in terms of paid-up share capital, file an application in the prescribed manner to the Registrar for removing the name of the company from the register of companies on all or any of the grounds specified in sub-section (1) and the Registrar shall, on receipt of such application, cause a public notice to be issued in the prescribed manner:
A company can also apply to be removed from the register if it has paid all its liabilities and 75% of its members agree, and the Registrar will then issue a public notice.
provisoProvided that in the case of a company regulated under a special Act, approval of the regulatory body constituted or established under that Act shall also be obtained and enclosed with the application.
(3)Nothing in sub-section (2) shall apply to a company registered under section 8.
This does not apply to companies registered under section 8.
(4)A notice issued under sub-section (1) or sub-section (2) shall be published in the prescribed manner and also in the Official Gazette for the information of the general public.
The Registrar will publish a notice in the Official Gazette and in a prescribed manner to inform the public.
(5)At the expiry of the time mentioned in the notice, the Registrar may, unless cause to the contrary is shown by the company, strike off its name from the register of companies, and shall publish notice thereof in the Official Gazette, and on the publication in the Official Gazette of this notice, the company shall stand dissolved.
If no objections are raised, the Registrar can strike off the company's name from the register after the notice period, and the company will be dissolved when the notice is published in the Official Gazette.
(6)The Registrar, before passing an order under sub-section (5), shall satisfy himself that sufficient provision has been made for the realisation of all amount due to the company and for the payment or discharge of its liabilities and obligations by the company within a reasonable time and, if necessary, obtain necessary undertakings from the managing director, director or other persons in charge of the management of the company:
Before doing so, the Registrar must ensure that the company has made provision for its liabilities and may obtain undertakings from its directors or managers.
provisoProvided that notwithstanding the undertakings referred to in this sub-section, the assets of the company shall be made available for the payment or discharge of all its liabilities and obligations even after the date of the order removing the name of the company from the register of companies.
(7)The liability, if any, of every director, manager or other officer who was exercising any power of management, and of every member of the company dissolved under sub-section (5), shall continue and may be enforced as if the company had not been dissolved.
The directors, managers, and members of a dissolved company remain liable and can still be held accountable.
(8)Nothing in this section shall affect the power of the Tribunal to wind up a company the name of which has been struck off from the register of companies.
This section does not affect the Tribunal's power to wind up a company that has been struck off the register.
The right-hand column is written from the section text, not quoted from it, and it has no legal force. Where the two differ, the left-hand column is the law.
Amendment notes
- 1. Subs. by Notification No. S.O. 3400(E), s. 2 for certain words (w.e.f. 23-10-2017).
- 2. Subs. by Act 1 of 2018, s. 74, for “during or after the valuation of assets” (w.e.f. 9-2-2018).
- 3. Subs. by vide Notification No. S.O. 1303(E), for certain words (w.e.f. 24-3-2021).
- 4. Ins. by Act 21 of 2015, s. 19 (w.e.f. 29-5-2015).
- 5. Clause (b) omitted by s. 19, ibid. (w.e.f. 29-5-2015).
- 6. Subs. by Act 22 of 2019, s. 36, for “section 455,” (w.e.f. 2-11-2018).
- 7. Ins. by s. 36, ibid. (w.e.f. 2-11-2018).
- 1. Subs. by Act 31 of 2016, s. 255 and the Eleventh Schedule, for clause (e) (w.e.f. 15-11-2016).
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Reproduced from the official India Code print for reference. Check the current text on India Code before you rely on it, and read the section alongside its Rules. Nothing here is legal advice.