Lok Sabha Question No. 229 (UNSTARRED), answered on 2025-12-01
Subject: Shell Companies Identified under Section 248 of the Companies Act, 2013
Ministry: CORPORATE AFFAIRS
Asked by: Shri Lalji Verma

## GOVERNMENT OF INDIA

## MINISTRY OF CORPORATE AFFAIRS

## LOK SABHA UNSTARRED QUESTION NO. 229 ANSWERED ON MONDAY, DECEMBER 01, 2025 AGRAHAYANA 10, 1947 (SAKA)

SHELL COMPANIES IDENTIFIED UNDER SECTION 248 OF THE COMPANIES ACT, 2013

## QUESTION

229. Shri Laliji Verma:

Will the Minister of CORPORATE AFFAIRS

be pleased to state:

- (a) whether the Government  proposes  to introduce a formal definition of shell companies under the Companies Act, 2013;
- (b)  the  steps  taken/being  taken  by  the  Government  to  strengthen monitoring and compliance mechanisms to prevent illegal financial activities of the non-functional firms;
- (c) the current status of probe of online lending apps identified for regulatory scrutiny along with the expected outcomes thereof; and
- (d)  the  number of shell companies identified under Section 248 of the Companies Act, 2013 in Ambedkar Nagar district along with the details of the action taken against them?

## ANSWER

THE MINISTER OF STATE IN THE MINISTRY OF CORPORATE AFAIRS AND MINISTER OF STATE IN THE MINISTRY OF ROAD, TRANSPORT

AND HIGHWAYS

(SHRI HARSH MALHOTRA)

(a): The  term  'Shell  Companies'  has  not been  defined  in  the Companies  Act,  2013.  There  is  no  proposal  to  introduce  such  a definition in the Companies Act, 2013.

(b):  The  Registrars  of  Companies  take  action  against  defaulting companies  who  fail  to  file  their  Annual  Returns  and/or  Financial Statements by taking action under sections 92, 96 and 137 of the Companies Act, 2013 or by striking off the name of the companies under section 248 (1) of the Companies  Act  read with the Companies (Removal of name of Companies from the Registrar of Companies) Rules, 2016. Action is also taken against companies for diversion,  siphoning  of  funds  or  fraud  etc.,  as  the  case  may  be, whenever contravention of the provisions of the Companies Act is found. Further,  under  section  206  (4),  206  (5)  and  210  of  the  Companies Act,  2013,  the  Central  Government  orders  Inquiries,  Inspections, Investigations  respectively  on  the  basis  of  complaints,  references and information regarding non-compliances. Based on the findings of  the  above,  suitable  action  against  non-compliant  companies including  striking  off  of  companies  under  section  248(1)  of  the Companies Act, 2013 is done. This is monitored on a regular basis. (c):  Regulatory  action  for  inquiry,  inspection  of  books  of  accounts and investigation under the Companies Act, 2013 is taken from time to  time  against  companies,  including  the  ones  indulged  in  online lending activities through Loan Apps. Whenever any violation under the  Companies  Act,  2013  is  found  on  the  basis  of  the  above,  an appropriate legal action is taken. Ministry of Electronics and  Information Technology  (MeitY)  is empowered to issue blocking directions to block the Information for public access under section 69A of the Information Technology Act 2000.  So  far,  after  following  the  due  process, MeitYhas  blocked  a total of 87 illegal loan lending applications under section 69A of the Information Technology Act 2000. (d)  :As  the  term  Shell  Company  has  not  been  defined  under  the Companies Act, 2013, the desired information is not maintained.

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