More than 5.57 lakh cos struck off due to non-compliance with companies law provisions

More than 5.57 thousand companies have been struck off the registers in the past five years due to non-compliance with various provisions of the Companies Act, according to the government.

Minister of State for Corporate Affairs Rao Inderjeet Singh said that 5,57,055 companies have been delisted under Section 248 of the Companies Act 2013 with the Companies (Remove Company Names from Register of Companies) Rules 2016 in the country in the last five years.

He said in a written reply to the Rajya Sabha that they were struck off due to non-compliance with the provisions of the law.

He also said that the term “share company” was not defined by law. He added that it usually refers to a company that does not have active business operations or significant assets, which in some cases are used for illegal purposes such as tax evasion, money laundering, and property obfuscation and Banami’s property.

Moreover, the minister said that the special task force set up by the government to look into the issue of “shell companies” recommended, among other things, the use of certain red flag indicators as alerts to identify them.