WEB DESK

Companies may soon have to geo-tag their registered offices in statutory filings with the Registrar of Companies (RoC), a move that will help identify shell companies from the same premises, reports Live-mint

By this the government seeks to prevent fraud by tightening regulatory systems.

Geo-tagging, or attaching data of the exact location of the office, will allow the online return filing system to alert government officials wherever it detects far too many companies are registered in the same premises, a trend noticed in past investigations into shell companies.

“This will help us identify instances of one building being used by hundreds of shell companies as their registered office or of companies citing vacant plots as their registered office address. It will serve as an early warning system for detecting mushrooming of shell companies,” minister of state for corporate affairs P.P. Chaudhary said in an interview. “We are seriously thinking of introducing this requirement.”

Many companies that exist only on paper with the same address were found in the past offering what is referred to as “accommodation entries” or bogus transactions without commercial substance. A special investigation team led by Justice M.B. Shah, a former judge of the Supreme Court, in 2015 highlighted the role played by such entities in money laundering.