What If the ROC Suo Motu Strikes Off My Company?

Last updated 22 May 2026

What triggers ROC suo motu action under Section 248(1)

Section 248(1) of the Companies Act 2013 empowers the Registrar of Companies to suo motu (on its own motion, without any application from directors) strike off a company from the register of companies. The primary trigger is non-filing of annual returns — specifically, if the company has not filed financial statements (AOC-4) or annual returns (MGT-7) for two or more consecutive financial years.

Other triggers under Section 248(1) include: the company has not commenced business within a year of incorporation, or the company has not been carrying on any business or operations for two immediately preceding financial years and has not applied to obtain the status of a dormant company under Section 455. In practice, the non-filing trigger is by far the most common reason for suo motu action, and the ROC exercises this power in batches — periodically identifying and striking off large numbers of defaulting companies.

The suo motu process: from notice to gazette notification

The process under Section 248(1) is not immediate — the ROC must follow a prescribed procedure before striking off a company. First, the ROC sends a show cause notice to the company at its registered office address. A copy is also sent to each director at their last known address. The notice gives the company an opportunity to respond within 30 days and show cause why it should not be struck off.

If the company does not respond, or the ROC is not satisfied with the response, the ROC publishes the company's name in the Official Gazette (India's government newspaper) and also on the MCA website, inviting objections from any interested party within 30 days of the publication. If no valid objection is received, the ROC issues a striking off order and publishes the company's name in the Official Gazette as struck off.

From the first notice to the final gazette notification can take several months — during which directors can still respond and prevent the strike off by filing the outstanding returns and providing proof to the ROC. The window to act exists, but it requires prompt action as soon as a show cause notice is received.

Consequences for directors: Section 164(2) disqualification

Section 164(2) of the Companies Act 2013 provides automatic disqualification for directors of a company that has not filed annual returns or financial statements for three consecutive financial years. The disqualification takes effect from the date the non-filing period crosses three consecutive years, and the disqualified director cannot be appointed to, or continue as, a director of any company for a period of five years from the date of disqualification.

This is a significant personal consequence. A director who is disqualified under Section 164(2) must vacate all directorships they currently hold in other companies as well. The disqualification is recorded in the MCA21 system, and the ROC periodically publishes lists of disqualified directors. Any company that subsequently appoints a disqualified director, or a disqualified director who fails to vacate office, commits an offence under the Companies Act.

What happens to the company's assets and bank accounts

When a company is struck off by the ROC (whether suo motu or voluntarily), its assets do not automatically transfer to the shareholders. Under Section 250 of the Companies Act 2013, all the property and assets of a company that is dissolved and struck off the register vest in the central government. This includes immovable property, intellectual property, bank balances, and any other assets.

In practice, as soon as a company is struck off, its bank accounts are frozen. Banks receive notification from the RBI and block further transactions. Any balance in the account is effectively inaccessible until the company is either restored or the balance is formally escheated to the government. This is a particularly problematic outcome for startup founders who may have dormant companies with residual bank balances.

How to get a suo motu struck-off company restored

Section 252 of the Companies Act 2013 provides the remedy. Any aggrieved person — a director, shareholder, creditor, or any other person who has an interest in the company — can apply to the National Company Law Tribunal (NCLT) for restoration of the company's name to the register. The application must be filed within 20 years of the date of striking off.

The NCLT considers whether the company was carrying on business at the time of strike off, whether the applicant has a legitimate interest in restoration, and whether it is just and equitable to restore the name. If the NCLT orders restoration, the company is deemed to have continued in existence as if it had never been struck off — but the applicant must also file all overdue annual returns and pay all penalties before or as a condition of restoration.

The cost of NCLT restoration is significantly higher than the cost of voluntary closure. NCLT filing fees, advocate/CA fees for drafting the petition, compliance costs to file all overdue returns (with full penalties at Rs 100 per day per form), and the time involved — often 6–12 months — make this a genuinely expensive outcome. Prevention through timely filing or voluntary strike off before the ROC acts is always the better path.

How to prevent suo motu strike off

The simplest prevention is keeping annual filings current. File AOC-4 and MGT-7 every year, even for dormant companies with nil activity. If the company has genuinely ceased operations and will never restart, file STK-2 voluntarily as soon as possible — do not allow the company to sit inactive with unfiled returns. Once two years of returns are missed, the clock is ticking toward potential suo motu action. Even one year of missed returns should prompt immediate attention, since by the time the second year's returns are due, the three-year disqualification window is already in sight.

This article is for general information only. For your specific situation, consult a practicing CA.