Nearly 2.5 lakh inactive companies in India likely to be dissolved

Nearly 2.5 lakh companies in India are looking at dissolution for not carrying out business activities over the last two financial years. These companies have also failed to apply for the ‘dormant’ status.

In the last two weeks the Registrar of Companies (RoC) has listed 250,000 companies who have not applied for the ‘dormant’ status as required under the Companies Act, 2013.

As per the Companies Act, the RoC can remove companies only on two conditions – first, if the company does not commence business within a year of registering and two, when a non-dormant company does not do any business for two successive financial years.

A company can apply for the tag of ‘dormant’ in case it is formed for doing some future business or to hold an asset.

While Mumbai has majority of these companies at 71,000, Delhi (53,000), Bengaluru (40,000) and Hyderabad (22,000) companies are also on the list.

Following the above cities are Pune, Kolkata and Ahmedabad who together have 11,000-12,000 dormant companies.

A report by the Economic Times said, as per norms, the names of these companies will be removed followed by dissolution in absence of any objection. The notices are available on the website of Ministry of Corporate Affairs.

Before these entities are dissolved, the RoC will also send notification to the regulatory bodies like central excise, income-tax and service-tax authorities to seek any objections or comments.