Around 61.5 per cent of 18.03 lakh companies registered in India were active at the end of September, data from the ministry of corporate affairs (MCA) showed amid the continued government clampdown on shell firms. There were more than 11.09 lakh active companies as of September-end. Active companies are those carrying out normal business activities and make their statutory filings to the stock exchanges on time.
Of the total number of 18.03 lakh registered companies, 6.46 lakh were closed as on September 30 and 1,523 were classified as dormant. As many as 39,791 companies were in the process of being struck off while 6,208 were under liquidation. Among those struck off, 102 companies were in the process of being reactivated, according to the ministry.
Of 6.46 lakh closed companies, 10,574 were liquidated and 5.99 lakh were declared defunct. As many as 21,894 companies were merged with other firms, 9,560 were converted to limited liability partnership (LLP) and 4,794 were converted to LLP and dissolved. In terms of economic activities, around 3.53 lakh companies were into business services and 2.22 lakh entities were engaged in manufacturing and other lines of work. Business services include information technology (IT), research and development, law and consultancy.
According to the MCA, Maharashtra has the highest number of companies (3.57 lakh), followed by Delhi (3.25 lakh) and West Bengal (1.98 lakh) as of September-end.
In June, the task force on shell companies identified more than 2.25 lakh such firms which will be removed from the registrar of companies in the current financial year. These companies had not filed financial statements or annual returns for the two financial years — FY16 and FY17 — and hence are chosen for removal from the registrar of companies under Section 248 of the Companies Act. The move is part of a drive to weed out entities that do no economic activity and are a burden on the system. The ministry also combs through the database of companies to see if any of the companies are used for economic offences such as money laundering.
The MCA has already struck off over 2.26 lakh companies in previous financial year for non-filing of financial statements or annual returns for a continuous period of two years or more.
To check tax evasion and prevent money laundering, especially in the wake of demonetisation, the government had constituted a task force last year under the chairmanship of revenue and Finance Secretary Hasmukh Adhia and Corporate Affairs Secretary Injeti Srinivas.
The task force has compiled a database of shell companies by the Serious Fraud Investigation Office. The authorities have frozen accounts of those shell companies which have been removed from the list and their directors have been restricted from accessing bank accounts of these companies, the government had said. — With inputs from FE