Government says 1.28 lakh companies struck off from records for non-compliance

The government has struck off 1,27,952 companies from the records for failing to submit their financial statements for two continuous financial years, Union minister Rao Inderjit Singh said. In a written reply to the Lok Sabha, he also said the term ‘shell company’ is not defined under the Companies Act, 2013.

The government undertook a special drive for identification and striking off companies u/s 248(1) of the Act read with the Companies (Removal of Names of Companies from the Register of Companies) Rules that had not filed their financial statements and/or annual returns for a continuous period of two immediately preceding financial years.

“A number of 1,27,952 companies have been struck off in last 3 years”, the Minister of State for Corporate Affairs said.

He was responding to a query on whether the government has implemented any safeguard measures for firms that unknowingly conduct business with the shell companies.

To put in place safeguard measures with respect to transactions with such struck off companies, Singh said the ministry had amended a schedule of the Act in Mar. 2021. With the amendment, companies having relationship with struck off companies will have to make certain disclosures.