Strike Off Notice - Section 248(1) of Companies Act

In case the company has failed to commence its business within one year or company is not carrying on any business operations for the period of 2 years, then in such case, under the provisions of section 248 (1) of the Companies Act, ROC can issue the notice, to the company, to remove the name of the company from the register of companies. The notice so issued by ROC is commonly known as a strike off notice. In this article, we look at Strike Off Notice under Section 248(1) in detail. Other related articles:

Condonation of Delay Scheme
Director Disqualifiation

Section 248(1)

As per powers given to ROC through provisions of section 248 (1) of the Companies Act, the ROC can suo moto issue notice intending to strike off the company (i.e. to remove the name of the company from the register of companies) under the following circumstances:

In case when company has failed to commence its business operations within a period of one year from the date of its incorporation; or
In case when company has not been carrying on the business operations for a period of two years and has not made application for obtaining status of a dormant company within such period.

Generally, the basis behind the intention of issuance of Strike Off Notice by ROC is non-filing of financial statements and

annual returns for the preceding two financial years.

Replying to Strike Off Notice

On receipt of the Strike Off Notice, the respective company is required to submit a suitable reply within a period of 30 days from the date of receipt of the notice. Also, the following steps can be followed by the company, based on intent:

Continue Operations

When the company wants to continue its operations, in such case, on receipt of the notice, the company needs to file of all the pending statements and annual returns along with payment of all the penalty an additional fees. After filing all the pending returns and statements as required under the law, the company is required to file an appropriate reply to the notice received within a period of one month from the receipt of the notice. On receipt of the reply, the registrar may, on being satisfied, conclude not to remove the name of the company from the register of the companies and conclude the proceedings accordingly.

Discontinue Operations

When the company does not want to continue its operations, even then, the company is required to first file all the pending statements and annual returns as required under the law along with all the penalty and additional fees. If the company doesn’t want to continue and after filing all the pending statements and returns, the company can file an application in

form STK-2 for strike off the company’s name. After filing of form STK-2, the company needs to reply to the notice received by informing the ROC that all the pending annual filing has been complied with and since the company doesn’t want to continue hence an application in form STK-2 has been filed. On receipt of the application in form STK-2 and on receipt of the reply, the registrar would remove the name of the company from the register of the companies.

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Frequently Asked Questions

Common questions about Strike Off Notice Under Companies Act Section 248.

A strike off notice is a notice issued by the Registrar of Companies (ROC) under Section 248(1) of the Companies Act, intending to remove the name of a company from the register of companies. It is typically issued when a company has failed to commence its business within one year of incorporation or has not been carrying on business operations for two consecutive years.

The ROC can issue a strike off notice suo moto (on its own) under the following circumstances: (a) If the company has failed to commence its business operations within one year from the date of incorporation, or (b) If the company has not been carrying on any business operations for a period of two years and has not applied for dormant company status within that period.

After receiving a strike off notice, the company is required to submit a suitable reply within 30 days from the date of receipt. The company can either continue operations or discontinue operations, but in both cases, it must file all pending financial statements and annual returns along with applicable penalties and fees.

To continue operations, the company needs to file all pending statements and annual returns along with payment of penalties and additional fees. After filing the pending returns, the company should file an appropriate reply to the notice within one month, stating its intent to continue operations. If satisfied, the ROC may conclude not to remove the company's name from the register.

If the company does not want to continue operations, it must still file all pending statements and annual returns along with penalties and fees. After completing these filings, the company can file an application in Form STK-2 for striking off its name. The company should then reply to the notice, informing the ROC about the STK-2 application and its decision to discontinue operations.

If a company fails to respond to the strike off notice within the prescribed time limit of 30 days, the ROC may proceed to remove the company's name from the register of companies, effectively striking off the company.

Yes, if a company has not been carrying on any business operations for two consecutive years, it can apply for dormant company status within that period to avoid receiving a strike off notice from the ROC.

Yes, the Companies Act imposes penalties and additional fees for late filing of financial statements and annual returns. These penalties and fees must be paid by the company while responding to the strike off notice and filing the pending documents.

The primary purpose of the strike off provision under Section 248(1) is to maintain an up-to-date register of companies by removing inactive or non-operational companies from the register. This helps in improving transparency and accountability in the corporate sector.

Yes, a struck off company can be restored by filing an application for revival or restoration within a specified time period, subject to certain conditions and fees prescribed under the Companies Act and the relevant rules.