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12,889 shell companies struck off in FY 2020-21

Posted on 07 August 2021,    
 363    Share  Report

There is no definition of the term "Shell Company" in 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. This was stated by Union Minister of State for Corporate Affairs Shri Rao Inderjit Singh in a written reply to a question in Rajya Sabha today.

On the identification shell companies, the Minister stated that 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 Shell Companies.

12,889 shell companies struck off in FY 2020-21

Giving more details, the Minister stated that the Government has undertaken a Special Drive for identification and strike off of Companies by invoking the provisions of section 248 (1) of the Act by which the Registrar of Companies (RoC) struck off those companies after following the due process of law from the Register of companies when RoC has reasonable cause to believe that those companies are not carrying on any business or operation for a period of two immediately preceding financial years and has not made any application within such period for obtaining the status of a dormant company under section 455.

The Minister listed the total number of companies struck off u/s 248 State/Union Territory-wise as under:

Sate/ UT-wise

2018-19

2019-20

2020-21

Gujarat

6398

2494

257

Andaman

24

15

2

Karnataka

4171

5568

1038

UT of Chandigarh

3514

893

501

Tamil Nadu and Coimbatore

9107

3214

1322

Orissa

2907

719

78

NCT of Delhi and Haryana

30544

12653

2396

Kerala

2801

5339

977

Goa

250

311

36

Madhya Pradesh

3386

1168

111

Himachal Pradesh

481

176

201

Telangana

16364

2686

730

Rajasthan

4038

4466

507

Jammu and Kashmir

255

138

0

Jharkhand

1306

403

139

Uttar Pradesh

7589

5821

1936

West Bengal

8390

6627

5

Maharashtra (Mumbai and Pune)

47575

7824

2298

Bihar

2540

1956

185

UT of Puducherry

37

117

35

Assam, Tripura, Arunachal Pradesh, Nagaland, Mizoram, Meghalaya, Manipur, and Sikkim

372

796

88

Uttarakhand

476

79

0

Andhra Pradesh

3864

958

0

Chhattisgarh

539

347

47

Grand Total

156928

64768

12889

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