Two out of five registered companies inactive in India

Among registered companies, data reveals that Maharashtra has 2.25 lakh active companies, followed by Delhi and West Bengal, with 1.97 lakh and 1.27 lakh companies respectively.

During October, 11,625 new companies were registered, out of which, 1,156 companies were government, with rest being non-government.

One-third of registered company has been stuck off from official records, as a part of the government’s plan to crackdown on shell or paper companies, data showed.

Under the section 248 of the Companies Act, 2013, a company’s name can be removed from the Registrar of Companies (RoC) if it fails to commence business within one year of its incorporation or is not carrying out operations for three years.

The ongoing move is part of a drive to remove entities that do not contribute to an economic activity and are rather a burden on the system. The corporate affairs ministry is also examining companies’ data to see if they are involved in tax evasion or money laundering.

As a part of government’s clampdown on black money, the government has taken several steps including constitution of the Special Investigation Team on Black Money, enactment of the The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, Income Declaration Scheme, 2016, Benami Transactions (Prohibition) Amendment Act, 2016 and the demonetization scheme.

In 2017-18, MCA had identified and removed the names of 2.26 lakh organisations from the registrar of companies (RoC) directory for remaining inactive for two years or more.

As of October 31, 6.46 lakh companies were closed down, out of which, 10,574 were dissolved, 6 lakh were defunct or struck off, 4,794 were converted into Limited Liability Partnership (LLP). Separately, 6,208 companies are also under liquidation.