Lok Sabha Question No. 227 (UNSTARRED), answered on 2025-12-01
Subject: Closing of Private Companies and Rehabilitation of employees
Ministry: CORPORATE AFFAIRS
Asked by: Shri Ramashankar  Vidharthi Rajbhar

## GOVERNMENT OF INDIA

## MINISTRY OF CORPORATE AFFAIRS LOK SABHA UN-STARRED QUESTION NO. 227 ANSWERED on MONDAY, 01   December, 2025 AGRAHAYANA 10, 1947 (SAKA)

Closing of Private Companies and Rehabilitation of employees

## QUESTION

227. Shri Ramashankar Vidharthi Rajbhar:

Will the Minister of CORPORATE AFFAIRS be pleased to state:

- (a)  the  number  of  private  companies  closed  down  during  the  last five years;
- (b)  whether  the  employees  of  the  said  companies  have  been rehabilitated, if so, the details thereof;
- (c)  whether  the  Government  proposes  to  implement  any  special scheme for the rehabilitation of employees working in the companies which are being closed, if so, the details thereof;
- (d) the number of shell companies identified in the country and the details of the action taken by the Government against them so far; and
- (e)  whether  the  Government  proposes  to  formulate  any  policy  to provide  tax  exemption  or  incentives  to  Corporate  companies  for setting up industries in backward and rural areas, if so, the details thereof?

## 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) 2,04,268 private companies have closed down during the last 5 years  on  account  of  amalgamation,  conversion,  dissolution  and strike off under the relevant provisions of the Companies Act, 2013 as under:

| Financial Year   | Companies Closed   |
|------------------|--------------------|
| 2020-21          | 15,216             |
| 2021-22          | 64,054             |
| 2022-23          | 83,452             |
| 2023-24          | 21,181             |
| 2024-25          | 20,365             |

(b) & (c): There is no proposal before the Government.

(d): The term 'Shell Company' is not defined in the Companies Act, 2013  (Act).  However,  from  time  to  time,  this  Ministry  carries  out Strike-Off companies under section 248(1) of the Act against 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 that not been filed within one hundred and eighty days of its incorporation under sub-section (1) of section 10A of the Act.

(e): It is the stated policy of the Government to gradually phase out exemptions and deductions while rationalizing tax rates to create a simple, transparent, and equitable tax regime instead of providing region-specific tax incentives. Moreover, the Government has undertaken  several  reforms  to  promote  investment  and  ease  of doing  business,  including  substantial  reductions  in  corporate  tax rates for both existing and new domestic companies.

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