Lok Sabha Question No. 10 (UNSTARRED), answered on 2025-07-21
Subject: Removal of Non-operational Companies
Ministry: CORPORATE AFFAIRS
Asked by: Smt. Mala Rajya Laxmi Shah, Shri Narayan Tatu Rane, Shri Shankar Lalwani, Shri Gajendra  Singh Patel, Shri Chandan Chauhan, Shri Kripanath Mallah, Shri Amrinder Singh Raja Warring, Shri Trivendra Singh Rawat, Shri Imran Masood, Shri P P Chaudhary, Shri Parbhubhai Nagarbhai Vasava, Shri Sukhjinder Singh Randhawa, Shri Khagen Murmu, Shri Anurag Sharma, Shri Chhatrapal Singh Gangwar, Shri Vijay Kumar Dubey

## GOVERNMENT OF INDIA

## MINISTRY OF CORPORATE AFFAIRS

## LOK SABHA UNSTARRED QUESTION NO. 10 ANSWERED ON Monday, July 21, 2025

## Removal of Non-operational Companies

10. Shri Sukhjinder Singh Randhawa: Shri Chhatrapal Singh Gangwar: Shri Shankar Lalwani: Smt. Mala Rajya Laxmi Shah: Shri Narayan Tatu Rane: Shri Amrinder Singh Raja Warring: Shri Anurag Sharma: Shri Chandan Chauhan: Shri Parbhubhai Nagarbhai Vasava: Shri Gajendra Singh Patel: Shri Vijay Kumar Dubey: Shri Trivendra Singh Rawat: Shri P P Chaudhary: Shri Khagen Murmu: Shri Imran Masood: Shri Kripanath Mallah:

## Will the Minister of CORPORATE AFFAIRS be pleased to state:

- (a) whether it is a fact that several companies/shell companies have been struck off across the country and if so, the reasons therefor along with the total number of companies removed during the last two years and the current year, State-wise including Saharanpur in
- Uttar Pradesh;
- (b)  the  steps  taken  by  the  Government  to  ensure  that  genuine companies are not mistakenly deregistered;
- (c)  whether  the  Government  is  planning  to  introduce  a  formal definition  of  shell  companies  under  the  Companies  Act,  2013  to improve clarity and enforcement;
- (d) the steps taken by the Government to strengthen the monitoring and  compliance  mechanism  to  prevent  misuse  of  non-functional firms for illegal financial activities and to simplify the

registration/deregistration  and  reduce  regulatory  burden  on  small companies; and

(e) the role of SFIO in investigating financial frauds and the current status of implementation of MCA21 V3 for better enforcement?

## 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): The term 'Shell Company' is not defined in the Companies Act, 2013  (Act).  However,  from  time  to  time,  this  Ministry  carries  out Strike-Off drive under section 248(1) for striking off such companies which 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  of  the  Act  or  the  subscribers  to  the memorandum  have  not  paid  the  subscription  which  they  had undertaken to pay at the time of incorporation of a company and a declaration to this effect has not been filed within one hundred and eighty days of its incorporation under sub-section (1) of section 10A of the Act. The last strike-off drive was carried out in the year 2022-

23. Further,  under  section  248(2)  of  the  Companies  Act,  2013  such companies which voluntarily seek removal of their  name from the Registrar  of  Companies  after  extinguishing  all  its  liabilities  are struck-off by following due process in the prescribed manner. The number of Companies Struck-off under 248(2) of the Companies Act, 2013 during the last 2 years and the current year, state wise, including Saharanpur, UP are at Annexure A and B respectively.

(b):Due  process  for  strike-off  of  Companies  as  laid  down  under section 248(1) of the Companies Act, 2013 is adhered to. Any person aggrieved by the order of dissolution by the Registrar of Companies, may  file  an  appeal  to  the  National  Company  Law  Tribunal  for

restoration of its name in terms of Section 252 of the Act. (c): Presently, there is no proposal before the government to define 'Shell Companies'. (d):  The  Companies  Act,  2013  and  rules  made  thereunder  contain adequate provisions for ensuring accountability and transparency in the  management  of  companies.  It  provides  for  accountability  for management  of  companies  through  key  managerial  personnel, Board  of  directors  and  shareholders.  The  Act  &  Rules  require companies  to  maintain  books  of  account,  various  returns  and registers  etc  in  the  prescribed  form  and  keep  them  at  their registered offices. Compliances with applicable accounting standards have also been mandated under the Act. Thebooks of accounts are required to be audited  by  independent  Chartered  Accountant.  In  addition,  the Companies  are  required  to file various documents,  copies  of resolutions, returns etc., with the Registrar. Further, as a measure of Ease of Doing Business, the Ministry has set up a Centralized Registrar of Companies (CRC) for incorporation of  companies  and  LLPs  to  provide  uniformity  in  the  incorporation process. Definition  of  Small  Company  has  been  amended  by  increasing  the threshold limit of a small company from having a paid-up capital not exceeding Rs.2.00 Crore to Rs.4.00 Crore and turnover not exceeding Rs.20.00 Crore to Rs.40.00 Crore. Similarly, the concept of  small  LLP  has  been  introduced  which  is  subject  to  lesser compliances, lesser fee to reduce the cost of compliances. A  Centre  for  Processing  Accelerated  Corporate  Exit  (C-PACE)  has also  been  established  to  centralize  and  speed  up  the  voluntary strike  off  process  of  Companies  under  Section  248  (2)  of  the Companies Act, 2013 in a fast-track mode in order to facilitate 'Ease of Doing Business' in India w.e.f. 01.05.2023. The Ministry has also centralized  the  striking  off  of  Limited  Liability  Partnerships  (LLPs)

by  empowering  the  CPACE  for  processing  of  e-Forms  related  to striking off of LLPs, w.e.f. 27.08.2024. (e):  The  Serious  Fraud  Investigation  Office  (SFIO)  is  assigned investigations by the Central Government under Section 212 of the Act  to  investigate  the  affairs  of  a  company  on  formation  of  an opinion that such an investigation is necessary, based on:

- a) A report from the Registrar or Inspector under Section 208 of the Companies Act, 2013;
- b) A special resolution passed by the company for such investigation;
- c) Public interest; or
- d) A request  from  any  department  of  the  Central  or State Government.

SFIO  comprises  of  experts  in  various  fields  such  as  accountancy, forensic  auditing,  law,  information  technology,  capital  markets, banking, and taxation. e-Forms related to Companies and LLPs filings have been migrated from  MCA-21  Version  2  to  Version  3  w.e.f.  14.07.2025.  The  Eadjudication module was also launched under MCA21 in September 2024 to establish a technology driven adjudication mechanism, for speedy and transparent adjudication of cases pertaining to offence(s) committed under the Act.

- *******

Annexure-A The number of Companies Struck-off under 248(2) of the Companies

## Act, 2013:

|   Sl No. | Name of the State / UT                   | FY 2023-2024   | Number of FY 2024- 2025   | Companies FY 2025- 2026 [till 16th July 2025]   | Grand Total   |
|----------|------------------------------------------|----------------|---------------------------|-------------------------------------------------|---------------|
|        1 | Andaman and Nicobar Islands              | 6              | 3                         | 2                                               | 11            |
|        2 | Andhra Pradesh                           | 400            | 224                       | 136                                             | 760           |
|        3 | Arunachal Pradesh                        | 4              | 2                         | 2                                               | 8             |
|        4 | Assam                                    | 90             | 86                        | 34                                              | 210           |
|        5 | Bihar                                    | 185            | 176                       | 97                                              | 458           |
|        6 | Chandigarh                               | 51             | 89                        | 44                                              | 184           |
|        7 | Chattisgarh                              | 67             | 97                        | 57                                              | 221           |
|        8 | Dadra and Nagar Haveli and Daman and Diu | 13             | 7                         | 2                                               | 22            |
|        9 | Delhi                                    | 2,151          | 2,372                     | 1,350                                           | 5,873         |
|       10 | Goa                                      | 78             | 72                        | 31                                              | 181           |
|       11 | Gujarat                                  | 665            | 891                       | 541                                             | 2,097         |
|       12 | Haryana                                  | 585            | 732                       | 360                                             | 1,677         |
|       13 | Himachal Pradesh                         | 27             | 70                        | 29                                              | 126           |
|       14 | Jammu & Kashmir                          | 29             | 30                        | 24                                              | 83            |
|       15 | Jharkhand                                | 185            | 92                        | 55                                              | 332           |
|       16 | Karnataka                                | 2,317          | 1,615                     | 871                                             | 4,803         |

| 17.   | Kerala         | 459    | 508    | 246   | 1,213   |
|-------|----------------|--------|--------|-------|---------|
| 18.   | Ladakh         | 0      | 0      | 1     | 1       |
| 19.   | Lakshadweep    | 2      | 0      | 0     | 2       |
| 20.   | Madhya Pradesh | 446    | 358    | 219   | 1,023   |
| 21.   | Maharashtra    | 3,276  | 3,290  | 1,763 | 8,329   |
| 22.   | Manipur        | 4      | 6      | 3     | 13      |
| 23.   | Meghalaya      | 7      | 2      | 4     | 13      |
| 24.   | Mizoram        | 2      | 0      | 2     | 4       |
| 25.   | Nagaland       | 6      | 3      | 2     | 11      |
| 26.   | Odisha         | 81     | 159    | 71    | 311     |
| 27.   | Puducherry     | 18     | 22     | 12    | 52      |
| 28.   | Punjab         | 125    | 211    | 117   | 453     |
| 29.   | Rajasthan      | 426    | 572    | 293   | 1,291   |
| 30.   | Tamil Nadu     | 964    | 1,179  | 628   | 2,771   |
| 31.   | Telangana      | 1,763  | 860    | 463   | 3,086   |
| 32.   | Tripura        | 4      | 8      | 4     | 16      |
| 33.   | Uttar Pradesh  | 1,234  | 1,046  | 558   | 2,838   |
| 34.   | Uttarakhand    | 73     | 133    | 54    | 260     |
| 35.   | West Bengal    | 721    | 922    | 573   | 2,216   |
|       | Grand Total    | 16,464 | 15,837 | 8,648 | 40,949  |

Annexure-B The number of Companies Struck-off under 248(2) of the Companies

Act, 2013, in Saharanpur, UP:

| Financial Year          |   No. of Companies Struck-off |
|-------------------------|-------------------------------|
| 2023-24                 |                            10 |
| 2024-25                 |                            12 |
| 2025-26 till 16.07.2025 |                             1 |
| Total                   |                            23 |