Over 380,000 firms struck off under companies law in 3 years: Govt

Anurag Thakur

More than 3.8 lakh companies have been struck off from official records under the companies law during the past three years, according to the government.

In a written reply to the Rajya Sabha, Minister of State for Corporate Affairs Anurag Singh Thakur also said the term "shell company" is not defined under the Companies Act.

"It normally refers to a company without active business operation or significant assets, which in some cases are used for illegal purpose such as tax evasion, money laundering, obscuring ownership, benami properties etc," he noted.

The Special Task Force set up by the government to look into the issue of shell companies has recommended the use of certain red flag indicators as alerts for identification of shell companies.

According to the minister, the government has undertaken a special drive for identification and then to strike off shell companies.

Based on non-filing of financial statements consecutively for two years or more, companies were identified and after following due process of law, "3,82,581 number of companies were struck off during the last three years", Thakur said.

This was done as provided under Section 248 of the Companies Act, 2013, read with the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016.

In a separate written reply, the minister said that under Section 182 of the Companies Act, companies, other than government companies and companies less than three years old, are allowed directly or indirectly to contribute to any political party with the approval of their boards of directors.

"Such companies shall have to disclose in its profit and loss account the total amount contributed by them during the financial year to which the account relates and the name of the party is not required to be disclosed. Therefore, political party-wise data is not maintained," he said.


(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)


Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel