Over 1.12 lakh shell firms struck off since 2019
In 2019, the government informed that the CBI had registered 30 cases against 104 shell companies in the four years
Chennai: Over 1.12 lakh shell companies were struck off in the past three years and the current year, the government informed Parliament.
According to the government, it has undertaken a special drive for identifying and striking off shell companies.
A total of 1,12,509 shell companies have been struck off from official records by the corporate affairs ministry during the last three years and current year—from April 1, 2019 to July 12, 2022.
“There is no definition of the term ‘shell company’ in the Companies Act, 2013. It normally refers to a company without active business operation or significant assets, which in some cases are used for illegal purposes such as tax evasion, money laundering, obscuring ownership, benami properties etc,” the government said.
Delhi had the highest number of struck off shell companies at 19,464. Maharashtra comes second with 16,023 companies. Uttar Pradesh had 12,823 companies and West Bengal 11,044. Karnataka, which houses a large number of start-ups saw 6,111 companies struck off from the rolls of the registrars of companies. Tamil Nadu saw 6,989 companies, Telangana 5,332, Andhra Pradesh 2,232 and Kerala 6,199 losing their registration.
Section 248 (1) of the Companies Act allows Registrars of Companies to strike off companies.
In 2019, the government had informed that the Central Bureau of Investigation (CBI) had registered 30 cases against 104 shell companies in the four years between 2015 and 2018. During investigation of 108 cases, 894 shell companies have been detected wherein irregularities such as falsification of financial statements, bank fraud, diversion of funds, impersonation, cheating, abuse of official position, criminal conspiracy, criminal misconduct etc. were found.