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Section 250: Effect of company notified as dissolved

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Act 2013
Section 249 All 470 Sections of Companies Act Section 251
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Company Sec 2(20) Director Sec 2(34) Tribunal Sec 2(90)

Legal Commentary & Landmark Judgments: Section 250

Section 250 of the Companies Act, 2013 governs the legal consequence of dissolution following strike-off under Section 248, enacting that while corporate personality and charter stand cancelled, all liabilities of directors, officers, and members survive continuously and remain fully enforceable.

  • Cancellation of Corporate Personality: On publication of the notice in the Official Gazette under Section 248(5), the company ceases to exist as a corporate body and its Certificate of Incorporation is deemed cancelled from that effective date.
  • Unbroken Survival of Managerial and Member Liability: The first proviso establishes that dissolution does not extinguish or diminish the personal liability of any director, manager, or officer exercising management powers, or any member, which remains enforceable as if dissolution had not occurred.
  • Preservation of Tribunal Winding-Up Jurisdiction: The second proviso expressly preserves the authority of the NCLT to wind up a company whose name has been struck off, ensuring that assets can be liquidated and claims adjudicated under formal court supervision.
Key Landmark Precedents:
  • M.A. Panjwani v. Registrar of Companies, (2015) 189 Comp Cas 101 / 2014 SCC OnLine Del 3381: The Delhi High Court held that striking off the company's name under Section 248 does not extinguish its debts or shield its controllers from creditor recovery; the corporate entity remains notionally alive for liability discharge under Section 250.
  • Commissioner of Income Tax v. Velingkar Brothers, (2007) 289 ITR 382 (Bom HC): Affirmed that administrative dissolution does not abate pending tax assessment proceedings, and tax authorities retain full power to enforce demands against assets or erstwhile directors.
  • Suryanarayan Investment Co. Ltd. v. ROC, 2019 SCC OnLine NCLAT 1133: Held that dissolution under Section 250 operates strictly subject to creditor protections, maintaining locus standi for claimants to pursue execution against directors or seek restoration under Section 252.
Courtroom Practice & Strategic Litigation Guidance:

Creditors and statutory claimants confronting a struck-off corporate debtor should not abandon litigation. Plead the provisos of Section 250 to continue recovery proceedings directly against erstwhile managing directors, or initiate a restoration petition under Section 252(3) before the NCLT to revive the corporate entity and attach newly discovered dormant assets.

Section 249 All 470 Sections of Companies Act Section 251