'382,875 Inactive Companies Struck Off List Till FY21': Minister

NEW DELHI: As many as 382,875 companies were struck off under the relevant section of Companies Act till FY21, the Parliament was informed on Tuesday. The exercise was conducted as part of a special drives taken by the Registrar of Companies under section 248 (1) of the Companies Act, Minister of State for Corporate Affairs Rao Inderjit Singh told the Rajya Sabha in a written reply.

Noting that the Companies Act has no definition of the term 'Shell Company', or a company without active business operations or significant assets, and in some cases, being used for illegal purposes such as tax evasion, money laundering, obscuring ownership, and benami properties, he said: "The Special Task Force set up by the government to look into the issue of 'Shell Companies" has, inter-alia, recommended the use of certain red flag indicators as alerts for identification of suspected 'Shell Companies'."

He said that the Registrar of Companies struck off those companies from the register of companies after following the due process of law where the official has reasonable cause to believe that those companies are not carrying on any business or operation for a period of two, immediately during the preceding financial year.

Furthermore, the Registrar of Companies also verified that such companies have not made any applications within such a period for obtaining the status of a dormant company under Section 455 of the Act, he added. (IANS)

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