Lok Sabha Question No. 2252 (UNSTARRED), answered on 2024-12-09
Subject: De-Registering of Defunct and Inactive Companies
Ministry: CORPORATE AFFAIRS
Asked by: Shri Madhavaneni Raghunandan Rao

## GOVERNMENT OF INDIA

## MINISTRY OF CORPORATE AFFAIRS

## LOK SABHA UNSTARRED QUESTION NO. 2252 ANSWERED ON MONDAY, 9 th DECEMBER 2024 Agrahayana 18, 1946 (Saka)

De-Registering of Defunct and Inactive Companies

2252.  Shri Madhavaneni Raghunandan Rao :

Will the Minister of CORPORATE AFFAIRS be pleased to state:

- (a) whether the Government has any scheme to permit winding up of inactive companies across the country;
- (b)  the  number  of  companies  registered  as  on  date  with  Registrar  of companies in Telangana;
- (c)  the  number  of  such  companies  have  been  deemed  to  be  inactive; and
- (d) the steps taken/proposed to be taken to assist entrepreneurs to deregister defunct and inactive companies in Telangana?

## ANSWER

Minister of State in the Ministry of Corporate Affairs; Minister of State in the Ministry of Road Transport and Highways

(Shri Harsh Malhotra)

- (a)  to  (d):  As  per  Section  455(1)  of  the  Companies  Act,  2013,  any company which has not been carrying on any business or operation or has  not  made  any  significant  accounting  transaction  during  last  two Financial  Years  (FYs)  or  failed  to  file  Financial  Statements  (FS)  and Annual  Returns  (AR)  for  last  two  FYs  is  considered  as  an  inactive company.

Under  Section  248(2)  of  the  Act,  a  company  may  voluntarily  file application for strike off if it has not commenced business within one year of incorporation or not been carrying on any business or operation for  a  period  of  two  immediately  preceding  FYs  without  obtaining  the status of a dormant company. The Ministry  has  set  up  Centre  for  Processing  Accelerated  Corporate Exit  (C-PACE)  centralizing  the  voluntary  strike  off  process  of  inactive companies  in  a  fasttrack  mode  in  order  to  facilitate  'Ease  of  Doing Business'. All  such  inactive  companies  may  now  file  application  for voluntary  strike  off  with  RoC,  C-PACE  after  extinguishing  all  of  their liabilities. As  on  30 th   November  2024,  there  are  164,471  registered  companies with  the  Registrar  of  Telangana,  which  includes  active  and  inactive companies and companies closed, under liquidation, under process of striking off, dormant etc. As per MCA 21 data,33,922 companies for the FY 2022-23 and 55,329 companies for FY 2023-24 have not filed their FS and AR in the Telangana state. There is no requirement for introducing any scheme relaxing filing of pending  returns,  since  as  a  permanent  measure  a  proviso  has  been added to Rule 4(1) of the Companies (Removal of Names of Companies From  the  Register  of  Companies)  Rules,  2016  vide  notification  dated 10.05.2023  relaxing  the  requirement  of  filing  of  overdue  Financial Statements  and  overdue  Annual  Returns  after  the  Financial  year  in which the company ceased to carry its business operations as a further measure of ease of doing business. Hence, an inactive company may file application for strike off without any requirements of filing FS and AR after the FY in which it ceased to carry on any business. This relaxation in the Rules is applicable to all eligible companies including companies of Telangana.

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