Lok Sabha Question No. 1264 (UNSTARRED), answered on 2018-02-09
Subject: Deregistered and Unregistered Companies
Ministry: CORPORATE AFFAIRS
Asked by: SUNIL BALIRAM GAIKWAD, VIJAY KUMAR S.R., T. RADHAKRISHNAN, ASHOK SHANKARRAO CHAVAN, GAJANAN CHANDRAKANT KIRTIKAR, BIDYUT BARAN MAHATO, SUDHEER GUPTA, KUNWAR HARIBANSH SINGH, NARANBHAI KACHHADIA

## GOVERNMENT OF INDIA

## MINISTRY OF CORPORATE AFFAIRS

## LOK SABHA

## UNSTARRED QUESTION NO. 1264 ANSWERED ON FRIDAY, THE 09TH FEBRUARY, 2018 [MAGHA 20, 1939 (SAKA)]

## DEREGISTERED AND UNREGISTERED COMPANIES QUESTION

1264.

DR. SUNIL BALIRAM GAIKWAD:

SHRI S. R. VIJAYAKUMAR:

SHRI T. RADHAKRISHNAN:

SHRI ASHOK SHANKARRAO CHAVAN:

SHRI GAJANAN KIRTIKAR:

SHRI BIDYUT BARAN MAHATO:

SHRI SUDHEER GUPTA:

SHRI KUNWAR HARIBANSH SINGH:

SHRI NARANBHAI KACHHADIYA:

Will the Minister of CORPORATE AFFAIRS be pleased to state:

- (a) the  number  of  companies  that  were  deregistered  for  various  noncompliances and being inactive for long till the end of December, 2017;
- (b) whether  the  Government  has  decided  to  strike  off  the  names  of another  1.20  lakh  companies  from  the  official  records  for  various  noncompliances recently and if so, the details thereof;
- (c) the number of directors associated with these entities who have been disqualified till date;
- (d) the  other  steps  taken/being  taken  by  the  Government  to  expedite action against the companies that are to be struck off the records;
- (e) whether the Government is aware that a large number of unregistered companies are operating in the country and if so, the details thereof; and
- the action taken by the Government against such companies during
- (f) each of the last three years and the current year?

## ANSWER

MINISTER OF STATE FOR LAW AND JUSTICE     (SHRI P. P. CHAUDHARY) AND CORPORATE AFFAIRS

(a) to (d): Section 248(1)(c) of the Companies Act, 2013 provides for removal of name of company from the register of companies if it is not carrying on any  business  or  operation  for  a  period  of  2(two)  immediately  preceding financial  years  and  has  not  made  any  application  within  such  period  for obtaining  the  status  of  a  dormant  company  under  Section  455  of  the Companies Act, 2013.  Based on the above mentioned provision, 2.97 lakh companies were identified under this category as on 31.03.2017 and after following due process names of 2,26,166 companies were struck off from the register of companies as on 31.12.2017.

Further, the provisions for disqualification for appointment of directors are  prescribed  under  section  164  of  the  Companies  Act,  2013.  Section 164(2)(a) of the Act, inter-alia, prescribes that no person who  is or has been a director of a company which has not filed Financial Statements or Annual Returns for any continuous period of three financial years shall be eligible to be re-appointed as director of that company or appointed as director in other company for a period of five years from the date on which the said company fails to do so. Section 167(1) (a) of the Act also prescribes that the office of a director shall become vacant in case he incurs any of the disqualifications  specified  in  section  164.  Further,  Rule  14(2)  of  the Companies  (Appointment  and  Qualification of Directors) Rules,  2014 requires the companies to intimate the particulars of their directors on such failure by filing a prescribed form DIR-9 to Registrar of Companies [ROCs]. Consequently,  3,09,619  Directors  were    identified  as  disqualified  under Section 164(2)(a) read with Section 167 of the Companies Act, 2013 for nonfiling of Financial Statements or Annual Returns for a continuous period of immediately preceding 3 (three) financial years (2013-14, 2014-15 & 201516). Such disqualification is by operation of law.  Out of the above mentioned disqualified Directors, 2,10,116 were the Directors on the Board of struck off companies.

(e) to (f): During the last three years [2014-15, 2015-16 and 2016-17]  , the following unregistered companies have come to the notice of this Ministry against whom the action is taken as under :

|   Sl. No. | Name of unregistered companies         | Jurisdictional Registrar of Companies   | Action against unregistered companies                                                                                                                                                    |
|-----------|----------------------------------------|-----------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         1 | Krishi Vipran Vikas Ltd.               | Kanpur                                  | Prosecution u/s 453 of the Companies Act, 2013 has been launched.                                                                                                                        |
|         2 | Bhagya Laxmi Financial Private Limited | Delhi                                   | The Reserve Bank of India has intimated that it has taken up the matter with the then Department of Electronic and Information Technology (DEITY) (now a Ministry) to close the website. |
|         3 | Natraj Finance                         | Delhi                                   | An FIR has been filed on 22.03.2017 by the Registrar of Companies, Delhi.                                                                                                                |
|         4 | Webtern India Pvt. Ltd.                | Pune                                    | Prosecution u/s 453 of the Companies Act, 2013 has been launched.                                                                                                                        |
|         5 | Tanishka Infotech Pvt. Ltd.            | Pune                                    | The case has been referred to the State Economic Offence Wing (EOW) on 06.10.2016.                                                                                                       |

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