Introduction: Why MCA Strike Off Status Matters
MCA strike off status is a critical corporate compliance indicator under Indian company law. Whether you are a listed company, large enterprise, lender, or vendor, dealing with a company whose name is struck off by the Registrar of Companies (ROC) can expose you to serious legal, financial, and governance risks.
With increased digitisation and enforcement by the Ministry of Corporate Affairs (MCA), strike off actions are now data-driven, frequent, and closely monitored. Understanding the legal meaning, consequences, and compliance checks around strike off status is essential for effective corporate due diligence.
This blog explains what MCA strike off status means, why companies are struck off, its legal implications, and best practices for compliance monitoring.
1. What Is MCA Strike Off Status?
A company is said to be “struck off” when its name is removed from the Register of Companies maintained by the Registrar of Companies under the Companies Act, 2013.
Strike off may occur due to:
- Action initiated by the ROC
- Voluntary application by the company
Once struck off, the company ceases to legally exist, subject to limited exceptions provided under law.
2. Legal Framework Governing Strike Off
The provisions relating to strike off are governed by:
- Companies Act, 2013
- Section 248 (Power of ROC to remove name)
- Section 455 (Dormant companies)
- MCA Rules and notifications issued by Ministry of Corporate Affairs
The objective of these provisions is to clean up inactive, non-compliant, and shell companies from the corporate registry.
3. Common Reasons for MCA Strike Off
The Registrar of Companies may initiate strike off proceedings if a company:
- Has not commenced business within one year of incorporation
- Has not carried on any business for two consecutive financial years
- Has failed to file annual returns and financial statements
- Appears to be non-operational or inactive
- Has applied for voluntary strike off
Non-filing of statutory returns is the most common trigger for strike off actions.
4. How to Check MCA Strike Off Status
Strike off status can be verified on the MCA portal by checking the company’s:
- CIN (Corporate Identification Number)
- Master Data Status
Typical MCA statuses include:
- Active
- Dormant
- Strike Off
- Under Process of Strike Off
⚠️ Important Compliance Insight:
A company shown as “Struck Off” cannot legally carry on business or enter into contracts.
5. Legal Consequences of Strike Off
Loss of Legal Existence
Once struck off:
- The company ceases to exist as a legal entity
- It cannot sue or be sued in its own name
- It cannot operate bank accounts or assets
Director & Officer Liability
Strike off does not automatically absolve directors from past liabilities. Directors may still be held responsible for:
- Statutory non-compliances
- Fraudulent transactions
- Outstanding dues
Impact on Contracts & Transactions
Any contract entered into after strike off may be:
- Legally unenforceable
- Challenged by regulators or counterparties
This poses significant risk for listed companies engaging with struck-off vendors or customers.
6. Impact on Listed Companies & Corporate Governance
For listed companies, association with struck-off entities can result in:
- Governance and ESG red flags
- Audit qualifications or adverse remarks
- Vendor due diligence failures
- Regulatory and investor scrutiny
As part of internal controls, MCA status verification is increasingly expected during vendor onboarding and periodic reviews.
7. Revival of Struck-Off Companies
A struck-off company may apply for revival through:
- National Company Law Tribunal (NCLT)
- Filing appeal within prescribed timelines
Revival is not automatic and requires:
- Justification for non-compliance
- Settlement of statutory dues
- NCLT approval
Until revival is approved, the company remains non-operational.
8. Best Practices for Strike Off Compliance & Risk Management
To mitigate strike off-related risks, companies should:
- Perform MCA status checks during vendor onboarding
- Periodically re-verify MCA status of key vendors and partners
- Maintain compliance dashboards tracking company status changes
- Flag “under strike off process” entities proactively
- Automate due diligence through compliance tools
🔍 Automation Advantage:
Continuous MCA monitoring helps avoid accidental engagement with non-existent or non-compliant entities.
Conclusion: Strike Off Status Is a Critical Due Diligence Parameter
MCA strike off status is not merely a registry label—it is a legal red flag with serious contractual, financial, and governance implications. For listed companies and regulated entities, real-time MCA verification and periodic monitoring are essential components of robust corporate compliance.
A proactive approach to strike off compliance strengthens risk management, audit readiness, and investor confidence.
