Lok Sabha Question No. 209 (UNSTARRED), answered on 2021-11-29
Subject: Closure of Companies
Ministry: CORPORATE AFFAIRS
Asked by: Annasaheb Shankar Jolle, Umesh G. Jadhav, L.S. Tejasvi Surya, D. M. Kathir Anand, B. Y. Raghavendra, Prathap Simha, Sanganna Amarappa Karadi

## GOVERNMENT OF INDIA

## MINISTRY OF CORPORATE AFFAIRS

## LOK SABHA

UN-STARRED QUESTION NO. 209

ANSWERED ON MONDAY, THE 29 TH  NOVEMBER, 2021

[AGRAHAYANA 8, 1943 (SAKA)]

## CLOSURE OF COMPANIES QUESTION

209. SHRI ANNASAHEB SHANKAR JOLLE: SHRI D. M. KATHIR ANAND: SHRI B.Y. RAGHAVENDRA: SHRI PRATHAP SIMHA: SHRI L.S. TEJASVI SURYA: SHRI SANGANNA AMARAPPA: DR. UMESH G. JADHAV:

Will the Minister of CORPORATE AFFAIRS

be pleased to state:

- (a) the details of the total number of companies, registered with the Registrar of Companies,  closed  down  after  the  demonetization,  GST  and  COVID  pandemic, State-wise;
- (b)  the  various  steps  taken  by  the  Government  to  support  sick  and  sinking companies and bring them back to normalcy.
- (c)  whether  the  Government  has  announced  any  amnesty  schemes  or  financial support for the revival of such distressed companies; and
- (d) if so, the details thereof?

## ANSWER

THE  MINISTER  OF  STATE  (INDEPENDENT  CHARGE)  OF  THE  MINISTRY  OF STATISTICS AND PROGRAMME IMPLEMENTATION; MINISTER OF STATE (INDEPENDENT  CHARGE)  OF  THE  MINISTRY  OF  PLANNING;  AND  MINISTER  OF STATE FOR CORPORATE AFFAIRS

## [RAO INDERJIT SINGH]

- (a):      Ministry  of  Corporate  Affairs  (MCA)  administers  the  provisions  of  the Companies Act, 2013 (the Act), The Limited Liability Partnership Act, 2008 and The Insolvency and Bankruptcy Code, 2016. MCA does not maintain data on event base. However,  the  total  number  of  new  companies  registered  from  1.04.2016  to 31.3.2021 and till date is as per Annexure A. The term 'closed company' is also not defined under the Act. However, pursuant to the provisions of section 248 (1)  of the    Act  where  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 has not made any application within such period for obtaining the status of a dormant company under section 455, shall after following the due process of law, struck off those companies from the Register of Companies.

Further, Companies are also dissolved through amalgamation or otherwise with the approval  of  the  Hon'ble  courts.    Accordingly,  the  details  of  number  of  such companies from 1.04.2016 to 31.3.2021 and till date are as per Annexure B

(b) to (d): MEASURES TAKEN BY MCA TO ADDRESS THE COVID-19 PANDEMIC. (i) The Companies Fresh Start Scheme, 2020 was launched to make a fresh start for  companies to be a fully compliant company by allowing them to file belated documents in MCA 21 registry without any additional fees from 1st April to 31st December 2020. The said scheme has also given immunity from prosecutions and proceedings for imposition of penalty which might arise on account of such delayed filing of documents. As per records, 473131 number of Indian Companies and 1065 number  of  Foreign  Companies  have  been  benefited  by  availing  the  CFSS,  2020 scheme for filing their pending documents. (ii)  The  MCA  introduced  an  LLP  Settlement  Scheme,  2020  to  provide  one-time relaxation in additional fees to the defau lting Limited Liability Partnerships ('LLPs') to  make  good  their  defaults  by  filing  pending  documents  with  the  Registrar  of Companies ('ROC' or 'Registrar') to ease the hassle of business enterprises.  The said scheme was initially rolled out from 16.03.2020 to 31.03.2020 for certain filings by LLPs. However, due to the COVID 19 pandemic the modified scheme to cover all e forms was rolled out from 01.04.2020 to 31.12.2020. Under the said scheme, the defaulting LLPs were permitted to file belated documents and the LLPs shall not be subjected to prosecution for such defaults.  As per records 105643 LLPs have been benefited by availing the LLP settlement scheme 2020 for filing their pending documents. (iii)  Keeping in view the second COVID wave and considering the difficulties arisen due to resurgence of COVID-19 pandemic, the Ministry has granted relaxation on levy of additional fees for companies / LLPs in filing certain forms (other than a CHG-1 Form, CHG-4 Form, and CHG-9 Form). Accordingly, no additional fees shall be levied up to 31st July 2021 for the delayed filing of forms (other than charge related forms referred above) which were / would be due for filing during 1st April, 2021 to 31st May, 2021. For such delayed filings up to 31st July 2021 only normal fees shall be payable. The said time limit has been further extended to 31st August 2021 vide General Circular No.11/2021 dated 30.06.2021.

(iv)  In  the  wake  of  COVID  19  and  to  provide  relief  to  law  abiding  companies  a scheme was launched for relaxation of time for filing forms related to creation or modification of charges under the Companies Act, 2013 during the period from 01st March to 31st December, 2020.

(v)  Considering the difficulties arisen due to resurgence of COVID-19 pandemic, the  Ministry  vide  General  Circular  no.  7/2021  dated  03.05.2021  has  granted relaxation of timelines and condoned the delay in filing forms that are related to creation / modification of charges (CHG-1 Form and CHG-9 Form) by a company or charge holder and where the date of creation / modification of charge is (i) before 1.4.2021, but the time line for filing such form had not expired under section 77 of the Act as on 1.4.2021; or (ii) falls on any date between 1.4.2021 to 31.5.2021 (both dates inclusive). In the said circular, the detail of relaxation of time and applicable fees for filing the aforesaid forms was prescribed.  The Ministry further extended the  aforesaid  relaxation  in  the  time  for  filing  forms  related  to  creation  or modification of charges under the Companies Act, 2013 by substituting the figures '31.05.2021' and '01.06.2021' wherever they appear in the General Circular No. 07/2021 dated 03.05.2021 with the figures '31.07.2021' and '01.08.2021' respectively. (vi) MCA has announced a Condonation of Delay Scheme for Companies restored by NCLT between 1st December, 2020 to 31st December, 2020 under section 252 of the Companies Act, 2013. The Scheme provides to condone delay in filing forms with the Registrar, and spares payment of additional fees. This Scheme was in operation from 01st February 2021 and was available for filing of any overdue eforms by such companies till 31st March 2021. (vii) In order to provide relief to the companies in view of COVID-19 pandemic, the companies  have been allowed to conduct Board Meetings through Video Conference (VC) or other audio-visual means for passing resolutions in respect of matters  which  were  earlier  required  to  be  passed  in  meetings  which  required physical presence of directors by amending the Companies (Meetings of Board and its Powers) Rules 2014 from time to time during COVID-19 pandemic.  Such facility to the companies was allowed till 30th June, 2021. (Initially it was till 30.06.2020, then extended to 30.09.2020 and 31.12.2020).  Thereafter, considering the second COVID wave, Rule 4 of the Companies (Meetings of Board and its Powers) Rules, 2014 has been omitted vide notification dated 15.06.2021 to provide that all the matters can be deliberated & resolutions passed by Board of Directors through video  conferencing  or  other  audio  visual  means.  The  measure  will  provide increased flexibility to Boards of companies for conducting Business and further the Ease of Doing Business objective of the Government. (viii)  The  companies  have  been  allowed  to  hold  Extraordinary  General  Meetings (EGMs)  through  Video  Conferencing  (VC)  or  other  audio-visual  means  (OAVM) complemented with e-Voting facility/simplified voting through registered emails till 30th  June,  2021.    Considering  the  second  wave  of  COVID-19,  the  Ministry  has extended the aforesaid time limit to 31st December, 2021.

(ix) The companies have been allowed to conduct their Annual General Meetings (AGMs)  by  Video  Conferencing  (VC)  or  other  audio-visual  means  (OAVM)  whose AGMs were due to be held in the year 2020 or become due in the year 2021 to conduct their AGMs on or before 31.12.2021.  Owing to the difficulties in sending physical copies of the financial statements, the companies are also allowed to send the financial statements, along with Board's reports, Auditor's reports and other documents required to be attached therewith, only through email. (xi) The Registrar of Companies on the advice of Ministry had given extension of time in holding of Annual General Meeting for the financial year ended on 31 March, 2020 till 31st December, 2020 (The maximum period which can be extended by the Registrar of Companies under section 96 of the Act). (xii)  Quality of disclosures strengthened through amendments made in the formats of  financial  statements,  Companies  (Accounts)  Rules,  Companies  (Audit  and Auditor's) Rules and the Companies (Auditor's Report) Order, 2020. The Companies (Auditor's  Report)  Order,  2020  has  now  been  made  applicable  from  the  audit  of financial  statements  for  the  financial  year  2021-22  to  ease  the  compliance requirement by auditors and the companies. (xiii)  The  Companies  (Indian  Accounting  Standards)  Rules,  2015  have  been amended vide  notification  dated  18.06.2021  inter-alia  to  extend  the  benefits  of COVID-19 related rent concession, that were introduced last year, from 30th June, 2021 to 30th June, 2022. (xiv)      The  mandatory  requirement  of  holding  meetings  of  the  Board  of  the companies within the intervals provided in section 173 of the Companies Act, 2013 (CA-13) (120 days) were extended by a period of 60 days till next two quarters i.e., till 30th September, 2020.  Considering the second COVID wave, the Ministry further extended the aforesaid relaxation for the year 2021-22 and accordingly the time gap between two consecutive meetings of the Board may extend to 180 days during the Quarter -April to June 2021 and Quarter -July to September, 2021, instead of 120 days as required in the Companies Act, 2013. (xv)   Independent Directors (IDs) of a company have been given relaxation from holding atleast one mandatory meeting and accordingly for the financial year 201920, if the lDs of a company have not been able to hold such a meeting, the same has not been viewed as a violation.

(xvi)  The Ministry enhanced the period to thirteen months from 1st December, 2019 within which existing Independent directors may apply online for inclusion of their names  in  the  databank  for  Independent  Directors  vide  amendments  in  the Companies (Appointment & Qualification of Directors) Rules, 2014  from time to time.    Further,  the  Companies  (Creation  and  Maintenance  of  databank  of Independent  Directors)  Rules,  2019  have  been  amended  vide  notification  dated 18.06.2021  to  provide  that  in  case  an  individual  has  delayed  in  applying  to  the Institute for inclusion of his name in the data bank of Independent Directors or in case of delay in renewal thereof, the Institute shall allow such inclusion or renewal, as the case may be, after  charging  a  further  fees  of  one  thousand  rupees  on  account  of  such  delay. Through this amendment requests made by a large number of stakeholders to grant additional time for delayed applications in view of Covid-19 pandemic have been addressed. (xvii)    Timeline for creation of deposit repayment reserve of 20% under section 73(2)(c) of CA-13 and to invest or deposit 15% of amount of debentures under rule 18 of Companies (Share Capital and Debentures) Rules, 2014 was extended till 31st December, 2020. (xviii)    An additional period of 180 more days has been allowed to comply with the requirement  of  filing  a  declaration  for  Commencement  of  Business  by  newly incorporated companies. (xix)    Non-compliance of minimum residency in India for a period of at least 182 days by at least one director of every company, under Section 149 of the CA-13 shall not be treated as a non-compliance for the financial year 2019-20 and 202021. (xx) Till 31st December, 2020, the inability to dispatch the notice for Rights Issues by listed companies to their shareholders through registered post or speed post or courier would not be viewed as violation of section 62(2) of the Act provided these companies comply with the SEBI Circulars dated 6th May, 2020 and 24th July, 2020 which  inter-alia  provide  the  mode/manner  of  issuance  of  notice  by  electronic transmission by listed companies. (xxi)  Requirement  for  investing  15%  of  amount  of  debentures  maturing  in  a particular  year  in  specified  instruments  has  been  done  away  with  for  Listed companies  &  NBFCs  when  such  debentures  are  issued  on  a  private  placement basis. (xxii) Time allowed to Auditors and Audit Firms for filing NFRA-2 form with the NFRA has been extended till a total period of 270 days in view of the difficulties faced during COVID-19 related disruption. (xxiii)  The  expenditure  incurred  by  companies  on  activities  relating  to  Central Armed Police Forces (CAPF) and Central Para Military Forces (CPMF) Veterans, and

their dependents including widows has been considered as CSR expenditure.

(xxiv)  Last  date  of  submission  of  Cost  Audit  Report  by  the  Cost  Auditor  to  the management  of  the  company  has  been  extended  till  31st  December  2020  and additional  fee  has  been  relaxed  for  filing  of  CRA-4  (form  for  filing  of  cost  audit report)  for  financial  year  2019-2020.  MCA  vide  circular  no.  15/2021  dated 27.09.2021 has extended last date of filing of submission of Cost Audit Report for the financial year 2020-21

by 31st October, 2021 and further extended upto 30th November, 2021 vide circular no. 18/2021 dated 29.10.2021. (xxv)  MCA  vide  General  Circular  No.17/2021  dated  29.10.2021  has  provided relaxation on levy of additional fees in filing of e-forms AOC-4, AOC-4 (CFS), AOC-4, AOC-4 XBRL AOC-4 Non-XBRL and MGT-7/MGT-7A for the financial year ended on 31.03.2021 under the Companies Act, 2013.

## Annexure in reply to Part (a) of Lok Sabha Unstarred Question No. 209 dated 29.11.2021

## The total number of new companies registered from 1.04.2016 to 31.3.2021 and till date.

| State                       | 2016-17   |   2017-18 |   2018-19 |   2019-20 |   2020-21 |   1.4.2021 to till date |
|-----------------------------|-----------|-----------|-----------|-----------|-----------|-------------------------|
| Chandigarh                  | 460       |       449 |       498 |       509 |       614 |                     445 |
| Delhi                       | 16,025    |     15859 |        30 |     14664 |     16119 |                   10783 |
| Haryana                     | 4,235     |      4730 |      5796 |      5931 |      7704 |                    5127 |
| Himachal Pradesh            | 340       |       393 |       451 |       437 |       616 |                     497 |
| Jammu & Kashmir             | 274       |       457 |      1545 |       494 |       820 |                     677 |
| Ladakh                      | 0         |         0 |         0 |         5 |        14 |                      17 |
| Punjab                      | 1,037     |      1321 |       127 |      1589 |      2071 |                    1583 |
| Rajasthan                   | 2,693     |      3044 |      3625 |      3977 |      5638 |                    3934 |
| Uttar Pradesh               | 8,685     |     10482 |     12403 |     12279 |     16128 |                   11246 |
| Uttarakhand                 | 677       |       870 |      1062 |      1179 |      1349 |                     981 |
| Arunachal Pradesh           | 16        |        37 |        37 |        32 |        67 |                      42 |
| Assam                       | 410       |       523 |       676 |       828 |      1203 |                    1032 |
| Bihar                       | 2,709     |      3475 |      3898 |      4242 |      5613 |                    3806 |
| Jharkhand                   | 1,031     |      1340 |       555 |      1426 |      2047 |                    1315 |
| Manipur                     | 51        |       126 |      2751 |       225 |       217 |                     154 |
| Meghalaya                   | 20        |        30 |       195 |        39 |        49 |                      45 |
| Mizoram                     | 12        |        15 |        22 |        26 |        18 |                      52 |
| Nagaland                    | 26        |        21 |        29 |        35 |        57 |                      44 |
| Sikkim                      | 2         |         0 |      2161 |      2049 |         0 |                       0 |
| Orissa                      | 1,525     |      1754 |         0 |         0 |      3147 |                    2189 |
| Tripura                     | 36        |        42 |       102 |       115 |       125 |                     118 |
| West Bengal                 | 4,751     |      4885 |      5726 |      5677 |      7198 |                    5501 |
| Chattisgarh                 | 537       |       510 |       656 |       837 |      1379 |                     951 |
| Dadra & Nagar Haveli        | 17        |        24 |        21 |        16 |        54 |                      31 |
| Daman and Diu               | 12        |        17 |     15928 |        18 |        25 |                      14 |
| Goa                         | 293       |       316 |       384 |       390 |       409 |                     278 |
| Gujarat                     | 4,628     |      4774 |      5642 |      5780 |      8188 |                    5727 |
| Madhya Pradesh              | 2,174     |      2356 |     23022 |      2942 |      4353 |                    2924 |
| Maharashtra                 | 17,507    |     19460 |        25 |     22686 |     28062 |                   20085 |
| Andaman and Nicobar Islands | 50        |        50 |        41 |        36 |        43 |                      39 |
| Andhra Pradesh              | 2,330     |      2425 |      2796 |      2815 |      3439 |                    2242 |
| Karnataka                   | 8,902     |      9755 |     11066 |     10439 |     12280 |                    8692 |
| Kerala                      | 3,067     |      3933 |      4716 |      4478 |      6409 |                    4154 |
| Lakshdweep                  | 0         |         0 |         4 |         2 |         7 |                       0 |
| Pondicherry                 | 93        |       122 |      1569 |       133 |       155 |                      83 |
| Tamil Nadu                  | 6,647     |      7411 |      8177 |      8212 |      9632 |                    7260 |
| Telangana                   | 6,568     |      7069 |      8202 |      8179 |     10128 |                    7030 |
| Total                       | 97,840    |    108075 |    123938 |    122721 |    155377 |                  109098 |

## Annexure in reply to Part (a) of Lok Sabha Unstarred Question No. 209 dated 29.11.2021 The total number of companies Closed from 1.04.2016 to 31.3.2021 and till date.

| State                | 2016-17   | 2017-18   | 2018-19   | 2019-20   | 2020-21   | 1.4.2021 to till date   |
|----------------------|-----------|-----------|-----------|-----------|-----------|-------------------------|
| Chandigarh           | 97        | 1,538     | 484       | 11,796    | 174       | 206                     |
| Delhi                | 2,107     | 45,581    | 1,360     | 2,260     | 2391      | 2054                    |
| Haryana              | 171       | 4,086     | 27,895    | 189       | 436       | 384                     |
| Himachal Pradesh     | 52        | 776       | 4,164     | 143       | 201       | 49                      |
| Jammu & Kashmir      | 6         | 1,539     | 497       | 607       | 1         | 81                      |
| Punjab               | 190       | 3,042     | 255       | 4,663     | 340       | 387                     |
| Rajasthan            | 508       | 5,455     | 2,247     | 6,013     | 510       | 345                     |
| Uttar Pradesh        | 328       | 7,978     | 4,210     | 85        | 1984      | 990                     |
| Uttarakhand          | 20        | 832       | 7,799     | 354       | 3         | 0                       |
| Arunachal Pradesh    | 5         | 15        | 20        | 43        | 3         | 0                       |
| Assam                | 59        | 202       | 277       | 572       | 78        | 5                       |
| Bihar                | 93        | 1,557     | 2,584     | 1,984     | 198       | 4                       |
| Jharkhand            | 49        | 633       | 1,334     | 415       | 143       | 179                     |
| Manipur              | 0         | 9         | 19        | 53        | 4         | 0                       |
| Meghalaya            | 4         | 30        | 33        | 59        | 10        | 0                       |
| Mizoram              | 3         | 2         | 4         | 8         | 0         | 0                       |
| Nagaland             | 1         | 10        | 30        | 48        | 2         | 0                       |
| Sikkim               | 0         | 0         | 2,022     | 0         | 0         | 0                       |
| Orissa               | 41        | 1,871     | 0         | 775       | 99        | 135                     |
| Tripura              | 2         | 16        | 24        | 48        | 2         | 0                       |
| West Bengal          | 2,248     | 8,238     | 10,132    | 8,552     | 538       | 4230                    |
| Chattisgarh          | 55        | 990       | 550       | 365       | 60        | 51                      |
| Dadra & Nagar Haveli | 1         | 46        | 2,057     | 9         | 2         | 5                       |
| Daman and Diu        | 1         | 15        | 30,855    | 327       | 1         | 2                       |
| Goa                  | 69        | 1,792     | 32        | 2,301     | 43        | 41                      |
| Gujarat              | 909       | 11,973    | 13        | 1,245     | 353       | 1585                    |
| Madhya Pradesh       | 381       | 5,000     | 258       | 9,103     | 152       | 445                     |
| Maharashtra          | 4,156     | 62,342    | 6,850     | 13        | 2661      | 5390                    |
| Andaman and          | 0         | 76        | 24        | 16        | 2         | 0                       |
| Nicobar Islands      |           |           |           |           |           |                         |
| Andhra Pradesh       | 15        | 3,863     | 3,891     | 1,001     | 9         | 662                     |
| Karnataka            | 122       | 18,924    | 4,397     | 2,955     | 1104      | 1593                    |
| Kerala               | 188       | 4,200     | 2,852     | 5,867     | 987       | 543                     |
| Lakshdweep           | 0         | 3         | 2         | 5,471     | 0         | 0                       |
| Pondicherry          | 13        | 586       | 40        | 3,511     | 35        | 9                       |
| Tamil Nadu           | 722       | 24,969    | 9,376     | 3         | 1374      | 1684                    |
| Telangana            | 192       | 18,073    | 16,646    | 118       | 774       | 1498                    |
| Total                | 12,808    | 236,262   | 143,233   | 70,972    | 14674     | 22557                   |

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