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  • Writer's pictureYashika Thakran

Section 251 of Companies Act 2013 Fraudulent application for removal of name

Updated: Oct 7, 2022

#section251 #companiesact2013 #fraudulent #removalofname #corporatelaw


The Companies Act 2013 is the law covering incorporation, dissolution and the running of companies in India. The Act came into force across India on 12th September 2013 and has a few amendments to the previous act of 1956. It has also introduced new concepts like a One Person Company.

Meaning of a Company

There are many definitions of a Company by various legal experts. However, Section 2(20) of the Companies Act, 2013, defines the term ‘Company’ as follows: “Company means a company incorporated under this Act or under any previous company law.”

Features of a Company

• A Company is a Separate Legal Entity

• Perpetual Succession

• Limited Liability

• Artificial Legal Person

Chapter-XVIII Removal of Name of Companies from the Register of Companies

Section 251: Fraudulent application for removal of name.

(1) Where it is found that an application by a company under sub-section (2) of section 248 has been made with the object of evading the liabilities of the company or with the intention to deceive the creditors or to defraud any other persons, the persons in charge of the management of the company shall, notwithstanding that the company has been notified as dissolved—

(a) be jointly and severally liable to any person or persons who had incurred loss or damage as a result of the company being notified as dissolved; and

(b) be punishable for fraud in the manner as provided in section 447.

(2) Without prejudice to the provisions contained in sub-section (1), the Registrar may also recommend prosecution of the persons responsible for the filing of an application under sub-section (2) of section 248.

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