Need help with closure and exit? We can handle it for you.
If your company hasn't filed an annual return in a while, you already know something is wrong. What most founders in this position don't know is the exact order things happen in, or that the consequences land on them personally well before the company itself gets struck off.
Key takeaway
Ignoring your annual filings doesn't leave a company in permanent limbo. A director of a company that hasn't filed AOC-4 or MGT-7 for any continuous 3 financial years is disqualified under Section 164(2): ineligible for reappointment or any new directorship for 5 years, DIN deactivated across every company they direct, the defaulting one and every other one alike, with no notice or hearing required first. Separately, the Registrar can strike the company off on its own initiative under Section 248(1), without needing the company's cooperation. Liability for anything done before strike-off survives either way. Restoration runs through the NCLT under Section 252, generally within 3 years of the strike-off order, or up to 20 years if the company can show it was actually operating when struck off.
It gets personal before it gets administrative
Most people picture the company quietly disappearing while nothing happens to them. In practice, the order runs the other way. Director disqualification usually lands well before the Registrar's own strike-off machinery catches up to a defaulting company, since disqualification triggers automatically off the filing gap itself, with no batch drive or manual review needed first.
What hits first: Section 164(2) director disqualification
Section 164(2) of the Companies Act 2013 disqualifies anyone who is or has been a director of a company that hasn't filed financial statements or annual returns for any continuous period of 3 financial years. The consequence: ineligible for reappointment at that company, or appointment at any other company, for 5 years from the date of default. It's collective. Every director who sat on the board during the default period is treated the same, regardless of individual role or whether they even knew filings had lapsed. There's no grace period, no notice, and no hearing. The Registrar simply updates the database.
This article is general information, not legal advice. If you need advice for your specific situation, contact Buildwright directly.
Get new templates and compliance updates by email.
Note
Courts have narrowed retrospective application of this section in specific fact patterns, most recently in commentary around the M.K. Rajagopalan case diluting Section 164(2)(b). That's litigation-dependent nuance rather than a rule we can generalise. If your own situation turns on it, that's a question for a lawyer or company secretary, and we won't resolve it here as though it were a documentation matter.
DIN deactivation follows you everywhere
Disqualification under Section 164(2) deactivates the director's DIN across every company they're a director of, the one that stopped filing and every unrelated one alike. A founder can lose the ability to act as director of an otherwise fully compliant company because of a dormant entity they'd mentally written off years ago. That's usually the moment this stops being an abstract compliance gap and starts being an active problem.
Separately, the ROC can strike the company off without you
The Registrar doesn't need a defaulting company's cooperation to close it. Under Section 248(1), if the ROC has reasonable cause to believe a company hasn't carried on business for the two immediately preceding financial years, it issues Form STK-5, a public notice of intent to strike off, gives 30 days for objections, and proceeds to dissolution via Form STK-7 if none land. A company that simply stopped filing doesn't sit in limbo forever by default. The Registrar can, and periodically does, close it in batch drives. If you'd rather control the timing and the paperwork than wait for that, voluntary strike-off or our strike-off filing service does that instead of leaving it to the Registrar's schedule.
What survives strike-off either way
Neither route erases the past. Liabilities and obligations incurred, and offences committed, before a company's dissolution don't disappear when it's struck off. Under Section 248(7), directors and officers stay answerable for what happened while the company was operating, whether the strike-off was voluntary or Registrar-initiated.
Getting it back: restoration under Section 252
Anyone aggrieved by a Section 248 strike-off order, including the company itself, a member, or a creditor, can apply to the NCLT for restoration under Section 252. Two different time windows exist here, and a fair amount of coverage online conflates them:
Window
Basis
Who it fits
3 years from the strike-off order
Section 252(1)/(2), the general default window
Most restorations: a director realises too late and wants the entity back
20 years from the Gazette notice date
Section 252(3), a fact-specific fallback
The company can show it was actually carrying on business or in operation when struck off, meaning the strike-off itself was wrong on the facts
The 20-year window isn't a general grace period. It exists specifically for a company that can prove the Registrar got it wrong. A defaulting company that genuinely stopped operating fits inside the ordinary 3-year window instead.
Note
Restoration filings are NCLT proceedings rather than a straight ROC form, so a company secretary or lawyer is typically involved. We haven't independently verified a specific professional-fee range for this beyond a single competitor quote, so we're not going to repeat a rupee figure here that we can't stand behind.
Where this fits against what we've already covered
Our earlier post, what happens if you miss your annual filings, already covers the Section 248 strike-off mechanics, STK-5 through the 30-day window to STK-7, and the fact that director liability survives strike-off. This one picks up where that post stops: Section 164(2) disqualification, DIN deactivation across every company you direct, and the Section 252 restoration windows. Read that one for the filing-deadline mechanics. Read this one for what happens to you as a director once the deadlines have already been missed.
Any continuous period of 3 financial years without filing AOC-4 or MGT-7 triggers Section 164(2). There's no warning notice before it applies.
What Actually Happens If You Ignore Your Annual Filings
Sustained non-filing of annual ROC returns can get your company or LLP struck off the register. How the punitive s.248 / Form-24 process actually works, and why it's not the same as voluntarily closing your entity.