Q.What is meant by "striking off" the name of a company under Section 248 of the Companies Act, 2013? How does it differ from winding up?

Striking off is a simpler, quicker administrative route under Section 248 by which the Registrar removes a genuinely defunct company's name from the register, leading to its dissolution.

Section 248 of the Companies Act, 2013 provides a simplified alternative to a full winding up, meant specifically for companies that have effectively stopped functioning and have little or nothing left to wind up.

Meaning of striking off. "Striking off" refers to the Registrar of Companies removing a company's name from the Register of Companies, which he may do either on his own motion, where he has reasonable cause to believe the company is defunct (for example, it failed to commence business within a year of incorporation, or the subscribers never paid their subscription and no declaration was filed within 180 days, or it has not carried on any business for two immediately preceding financial years without applying for dormant status), or on the company's own application, filed after it has extinguished all its liabilities, supported by a special resolution or the consent of at least 75% of members. In practice, a company applies using the prescribed e-form along with an indemnity bond, a statement of accounts, and an affidavit. In either case, the Registrar issues a public notice inviting objections before finally striking the name off and publishing the fact in the Official Gazette, at which point the company stands dissolved.

How it differs from winding up.

• Speed and cost. Striking off is a comparatively quick and inexpensive administrative process; a full winding up, whether by the Tribunal or as a voluntary liquidation, is far more elaborate and time-consuming.
• No liquidator. Striking off does not require the appointment of a liquidator, since there is (by definition) no meaningful business, assets, or liabilities left to administer; a proper winding up always involves a Company Liquidator or voluntary liquidator conducting the process.
• No formal claims process. Winding up involves settling lists of creditors and contributories and paying debts in a strict order of priority; striking off is only available once the company has already cleared its liabilities, so no such elaborate claims process is needed. …

Students sometimes think striking off wipes out the liability of directors and members entirely; in fact, Section 248 expressly preserves their liability as if the company had no …