Industry

Over 3.96 lakh companies removed from official records for non-compliance in 5 years

Minister of State for Corporate Affairs Rao Inderjit Singh. File   | Photo Credit: PTI

More than 3.96 lakh companies were removed from official records in the last five financial years after following the due process under the companies law, according to official data.

The corporate affairs ministry, which is implementing the Companies Act, 2013, struck off 12,892 companies from the official records in the last fiscal, while the number stood at 2,933 in 2019-20.

Figures provided by Minister of State for Corporate Affairs Rao Inderjit Singh to the Rajya Sabha in a written reply on Tuesday showed that a total of 3,96,585 companies were removed from the Register of Companies in the last five financial years.

In 2016-17, a total of 7,943 companies were removed from the register, while the count was at 2,34,371 in 2017-18 and 1,38,446 in 2018-19.

To a query on whether many companies were struck off on account of lack of compliance, the minister replied in the affirmative.

Pursuant to provisions of Section 248 (1) of the Companies Act, the name of a company can be removed from the register subject to certain conditions after following the due process of law.

The removal is subject to the condition that the Registrar has reasonable cause to believe that companies that are not carrying on any business or operation for a period of two immediately preceding financial years and these firms have not made any application within such period for obtaining the status of a dormant company under Section 455.

In a separate written reply, Mr. Singh said that CSR (Corporate Social Responsibility) framework is disclosure-based and CSR-mandated companies are required to file details of such activities annually in the MCA21 registry.

"On the basis of filings made in the MCA21 registry up to 30.09.2021, both public and private sector companies have spent an amount of ₹ 8,828.11 crore in FY 2020-21, of which an amount of ₹ 2,559.30 crore were spent on 'healthcare related activities'.

"However, ministry does not maintain the details regarding the CSR expenditure made by companies under CSR for COVID-19 separately," he added.


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Printable version | Jan 25, 2022 2:47:10 PM | https://www.thehindu.com/business/Industry/over-396-lakh-companies-removed-from-official-records-for-non-compliance-in-5-years/article37886106.ece

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