Lok Sabha Question No. 5861 (UNSTARRED), answered on 2026-03-30
Subject: Strengthening Corporate Governance Framework
Ministry: CORPORATE AFFAIRS
Asked by: Dr. Alok Kumar Suman

## GOVERNMENT OF INDIA

## MINISTRY OF CORPORATE AFFAIRS

## LOK SABHA

## UNSTARRED QUESTION NO. 5861 ANSWERED ON MONDAY, 30TH MARCH, 2026 CHAITRA 09, 1948 (SAKA)

## STRENGTHENING CORPORATE GOVERNANCE FRAMEWORK

5861. DR. ALOK KUMAR SUMAN :

Will the Minister of Corporate Affairs be pleased to state:

- (a) The number of companies registered during the last three years;
- (b) The measures taken by the Government to improve corporate governance standards;
- (c) The action taken against shell companies in the country;
- (d) The implementation status of Corporate Social Responsibility provisions; and
- (e) The reforms introduced under the Companies Act?

## ANSWER

THE  MINISTER  OF  STATE  OF  THE  MINISTRY  OF  CORPORATE  AFFAIRS  AND MINISTRY OF ROAD TRANSPORT AND HIGHWAYS.

(SHRI HARSH MALHOTRA)

- (a) The number of companies registered during the last three years are as under:
- (b) The  Government  of  India  has  been  taking  several  steps  towards optimising regulatory compliance, addressing of corporate governance issues for    overall    transparency,    strengthening   transparency etc. Some of the important measures taken in this regard are as under:
- (i) The provisions of the Companies Act, 2013 [CA-13 or Act] and the rules made thereunder have provisions to ensure financial accountability and transparency in the management of companies.

| Financial Year   | Total number of Companies registered   |
|------------------|----------------------------------------|
| 2022-23          | 1,59,302                               |
| 2023-24          | 1,85,318                               |
| 2024-25          | 1,81,138                               |

These provisions inter alia require maintenance of books of accounts and  statutory  registers  at  the  registered  offices,  preparation  of financial statements in accordance with applicable financial reporting/accounting  standards  and  filing  them  with  the  Registrar after  due  approvals.  The  financial  statements  are  required  to  be audited by an independent chartered accountant. Crucial parameters such  as  risk  management,  state  of  company's  affairs,  material changes  affecting  company's  financial  position  are  required  to  be reported  in  the  Board's  Report.  The  Registrar  of  Companies  takes suitable action against the defaulting companies who fail to file their Annual Returns and/or Financial Statements under the provisions of the Act.

- (ii) The Act also requires listed and public companies meeting specified thresholds  with  respect  to  paid  up  capital  or  turnover  or  debt  to appoint independent directors and constitute various committees of the  Board  viz.  Audit  Committee,  Nomination  and  Remuneration Committee, Stakeholders Relationship Committee etc.
- (c)   The term 'shell company' is not defined under the Companies Act, 2013 hence the requisite information is not maintained. However, from time to time, this Ministry carries out Strike-Off drive under section 248(1) for striking off such companies  which have failed to commence its business within one year of its incorporation, 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 or the company is not carrying on any business or operations, as revealed after the physical verification carried out under section 12(9) of the said Act.
- (d)    The legal framework for Corporate Social Responsibility (CSR) has been provided under Section 135 of the Companies Act, 2013 ('Act'), Schedule VII of the  Act  and  Companies (CSR Policy) Rules, 2014. Under the Act, every CSR mandated  company  has  to  constitute  a  CSR  Committee.  The  Committee formulates  and  recommends  the  CSR  policy  and  the  Board  of  the  company plans, decides, executes and monitors the CSR activities of the company. The Board of the company is required to disclose the CSR Policy implemented by the  company  in  its  Board  report  and  has  to  satisfy  itself  that  the  funds  so disbursed have been utilised for the purposes and in the manner as approved by it,  and  the  Chief  Financial  Officer  or  the  person  responsible  for  financial

management shall certify to this effect. The CSR framework is disclosure based and expenditure on CSR activities is required to be audited by the statutory auditors of the company. During the year 2023-24, a total amount of ₹34,908.75 crores  has  been  the  expenditure  incurred  on  CSR  activities  by  the  eligible companies. (e) The Companies  Act, 2013 (the Companies  Act)  was  enacted to consolidate and amend the laws relating to companies. The said Act introduced changes  related  to  disclosures  to  stakeholders,  accountability  of  directors, auditors  and  key  managerial  personnel,  investor  protection  and  corporate governance. The said Act has been amended in 2015, 2017, 2019 and 2020 to decriminalise certain offences, facilitate ease of doing business, rationalise compliance requirements and recognise new concepts. Some of the important amendments to the Companies Act, 2013 are at Annexure.

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Annexure Refer to Part (e) of Lok Sabha Unstarred Question No. 5861 for 30 th  March 2026. (i) Amendments made in CA-13 in 2019 and 2020 and in the LLP Act, 2008 in 2021 to decriminalize 63 offences. While providing relief to corporates, one of the objectives of decriminalization has also been reduction of litigation burden in judicial courts and shifting the prosecution cases towards adjudication. (ii) Exemptions  from  various  provisions of  Companies  Act  to  Private companies,  Government  Companies,  Charitable  companies,  Nidhis  and  IFSC (GIFT city) companies have been provided through issue of notifications under section 462 of the CA-13 during 2015, 2017 and 2020. (iii) The requirement of minimum paid up capital, i.e. Rs. I lakh for a private company and Rs. 5 lakh for a public company, has been done away with. (iv) Extension  of  fast-track  process  of  mergers  under  the  Companies  Act, 2013  to  cover  mergers  of  Startups  with  other  Startups  and  with  small companies,  so  that  the  process  of  mergers  &  amalgamations  is  completed faster for such companies. Now this process can also be availed in cases where a holding company incorporated outside India is to be merged with its wholly owned subsidiary incorporated in India. (v) New section 446B for lesser penalties for One Person Companies, small companies, startups and Producer Companies. (vi) Private companies which list non-convertible debt instruments on stock exchanges not to be regarded as listed companies so as to ensure development of corporate bonds market. (vii) Provisions relating to Producer Companies (earlier Part IXA of Companies Act, 1956) included in the Companies Act, 2013.

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