Restoration & Compliance Matters Before NCLT | Nainit Savla & Associates

Restoration & Compliance Matters Before the NCLT

Q: Can a struck-off company be restored to the register?

Yes — Section 252 allows aggrieved companies, members, creditors, or workmen to apply to the NCLT for restoration within 20 years. The NCLT restores if the company was in operation at strike-off or if just and equitable. Upon restoration, the company is deemed to have continued in existence as if never struck off.

Q: What is Section 164(2) director disqualification and how is it removed?

Section 164(2) disqualifies directors whose companies fail to file annual returns or financial statements for 3 continuous years. Restoration requires compounding the defaulting company's offences, filing all overdue returns, or a High Court writ or NCLT petition challenging the disqualification.

Q: What is compounding of offences under Section 441 and when should a company apply?

Compounding allows payment of a sum to the Regional Director (up to ₹25 lakh) or NCLT in lieu of prosecution for compoundable offences. It must be applied for before prosecution is initiated — not available after conviction or court cognizance.

Q: Can a struck-off company's bank account be operated?

No — bank accounts are frozen upon strike-off. No transactions can be made in the company's name. After the NCLT restoration order is filed with the RoC, banks reactivate accounts on production of the order.

Q: What overdue filings must be made before or during restoration?

All overdue annual returns and financial statements for every year since last filing must be submitted — typically directed by the NCLT within 30 to 90 days of the restoration order. Late additional fees (₹100 per day per form subject to caps) must be paid in full.

Company restoration and compliance regularisation are critical proceedings for businesses whose names have been struck off the MCA register under Section 248 of the Companies Act, 2013 — or for directors and companies seeking to compound past offences and regularise delayed or non-compliant filings before the NCLT or the Regional Director. A struck-off company cannot conduct business, operate bank accounts, hold property, or enforce contracts — making restoration an urgent legal requirement for any company whose name has been inadvertently removed from the register. We provide expert advisory and representation for all restoration and compliance regularisation proceedings before the NCLT, Regional Director, and MCA.

Company Restoration (Section 252)

Filing of restoration petitions before the NCLT under Section 252 of the Companies Act — for companies struck off by the Registrar of Companies under Section 248 — to restore the company's name to the register and revive its legal existence.

Struck-Off Company Advisory

Comprehensive advisory on the implications of a company being struck off — effect on bank accounts, ongoing contracts, property holdings, pending litigation, and director liability — and the most appropriate restoration strategy for the specific situation.

Director Disqualification Restoration

Advisory on restoring director status for directors disqualified under Section 164(2) due to their company's failure to file annual returns or financial statements — including representation in NCLT petitions and High Court writ petitions challenging blanket disqualification orders.

Compounding of Offences (Section 441)

Applications for compounding of offences under Section 441 of the Companies Act before the Regional Director (for offences punishable with fine only, below ₹25 lakh) and the NCLT (for more serious offences) — enabling companies and officers to regularise past defaults without criminal prosecution.

CFSS & Amnesty Scheme Advisory

Advisory on utilising government amnesty schemes — Companies Fresh Start Scheme (CFSS) and other MCA scheme notifications — to file overdue annual returns, financial statements, and other forms with concessional fees and immunity from prosecution.

Annual Filing Regularisation

Catch-up filing of outstanding annual returns (MGT-7), financial statements (AOC-4), and other overdue MCA forms — with computation of applicable additional fees and filing strategy to minimise penalty exposure and achieve full compliance.

Company Restoration Under Section 252 — The Process

When the Registrar of Companies strikes off a company's name under Section 248 (for non-filing of annual returns/financial statements or non-commencement of business), the aggrieved company, any member, creditor, or workman may apply to the NCLT for restoration under Section 252 within 20 years of the date of dissolution. The NCLT will order restoration if it is satisfied that the company was carrying on business at the time of strike-off, or that it is just and equitable to restore the name. Upon restoration, the company is deemed to have continued in existence as if it had never been struck off — allowing regularisation of all legal acts taken during the struck-off period.

The restoration process is distinct from the voluntary liquidation process and the NCLT's jurisdiction over general company law matters — it is a specific statutory remedy for companies incorrectly or inadvertently removed from the register.

Common Situations Requiring Restoration or Compliance Regularisation

Company struck off under Section 248 due to consecutive non-filing of annual returns or financial statements
Directors disqualified under Section 164(2) due to non-filing by one of their companies
Company needs to sell a property, enforce a contract, or collect a debt while struck off
Company has ongoing bank accounts, assets, or pending litigation that cannot be managed while struck off
Company wants to compound past offences (late filings, procedural non-compliances) to avoid prosecution
Company needs to regularise multiple years of overdue MCA filings before applying for new registrations or licences

Frequently Asked Questions

Can a struck-off company be restored to the register?

Yes. Section 252 of the Companies Act provides that an aggrieved company, member, creditor, or workman may apply to the NCLT for restoration of the company's name to the register within 20 years of the date of dissolution. The NCLT may order restoration if it is satisfied that the company was carrying on business or in operation at the time of being struck off, or if it is just and equitable to restore the name. Upon the NCLT's restoration order, the company is deemed to have continued in existence as if its name had never been struck off — all transactions entered into by the company during the struck-off period can be ratified and regularised, and all property that had vested in the Crown can be restored.

What is Section 164(2) director disqualification and how is it removed?

Section 164(2) of the Companies Act disqualifies a director from being appointed or re-appointed in any company if the company in which they are a director has failed to file annual returns or financial statements for any continuous period of 3 years — or has failed to repay deposits, debentures, or dividends for more than one year. The disqualification takes effect automatically on the date of default and affects the director's eligibility in all companies where they hold directorship (not just the defaulting company). Restoration of director status requires: (a) compounding the offences of the defaulting company; (b) filing all overdue returns of the defaulting company; or (c) filing a writ petition before the High Court or NCLT petition challenging the disqualification on legal grounds — particularly in cases of blanket disqualification where the director had no knowledge of or involvement in the non-filing.

What is compounding of offences under Section 441 and when should a company apply?

Compounding under Section 441 allows a company or director who has committed a compoundable offence under the Companies Act to pay a sum of money (typically not exceeding the maximum fine prescribed for the offence) to the Regional Director (for offences punishable with fine only, up to ₹25 lakh) or the NCLT (for more serious offences), in lieu of prosecution. Compounding effectively settles the criminal liability for past non-compliance without a court trial or conviction. It is most commonly used for: late filing of annual returns and financial statements, procedural non-compliances in board/shareholder meetings, and other technical offences where the company has since remediated the underlying non-compliance. Compounding should be applied for before prosecution is initiated by the RoC or MCA — it is not available after conviction or after the court has taken cognizance.

Can a struck-off company's bank account be operated?

No — once a company is struck off, its bank accounts are typically frozen by the bank upon receipt of the strike-off notice from the RoC. The company cannot operate its bank accounts, make payments, receive funds, or conduct any business transactions while struck off. Any transactions purported to be made in the name of a struck-off company have no legal validity. This is one of the most immediate practical consequences of strike-off — and the most common urgency driver for restoration petitions. After the NCLT passes the restoration order and it is filed with the RoC, the company's legal existence is revived and banks typically reactivate the accounts upon production of the NCLT restoration order.

What overdue filings must be made before or during restoration?

As part of the restoration process, the NCLT typically directs the company to file all overdue statutory returns and financial statements with the RoC — covering every financial year since the last filed return. The restoration order is often conditional upon the company completing all outstanding filings within a specified period (typically 30 to 90 days of the order). Late filing fees must be paid for each overdue form — which can be substantial if multiple years are in arrears. Companies should budget for the full catch-up filing cost (including additional fees, which are currently ₹100 per day for most forms, subject to a maximum) as part of the restoration cost assessment.

Restore Your Company and Regularise Past Non-Compliance

NCLT restoration petitions, director disqualification advisory, compounding applications, and annual filing regularisation for companies across India.

Talk to an Expert