New Delhi [India], March 15 (ANI): The Government has struck off over 3.82 lakh companies till the end of 2020-21 under special drives done by the Registrar of Companies, Union Minister of State for Corporate Affairs Rao Inderjit Singh said on Tuesday.
Under the special drives taken by the Registrar of Companies, 3,82,875 companies were struck off u/s 248 (1) of the Companies Act till the financial year 2020-21, the minister said in a written reply in the Rajya Sabha.
The minister said the government has undertaken special drives for identification and striking off companies by invoking the provisions of Section 248 (1) of the Companies Act.
Noting that the Registrar of Companies struck off the companies after following the due process of law, he said it is done 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.
The RoC also verifies that such a company has not made any application within such period for obtaining the status of a dormant company under Section 455 of the Act.
Answering query related to a 'shell company', the minister said there is no definition of "shell company" in the Companies Act, 2013 (the 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 and benami properties.
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 such suspected companies. (ANI)