The Maharashtra government has completed the scrutiny of nearly 80,000 companies declared inactive by the Government of India following a clampdown on “shell companies” last year. Sources in the State Industries Department said an alert mechanism has been set up in all the divisions of the State, declaring the companies invalid to carry out businesses. While their tax records are already frozen, the companies will not be allowed to carry out business or transaction in the State as per the directives of the Ministry of Corporate Affairs (MCA), officials said.

“We have ensured all necessary scrutiny was carried out on the firms declared inactive under Section 248 of the Companies Act, while striking off their names from the Registrar of Companies (ROC) last year. They will not be allowed to function in the State in any manner by the order of the Divisional Commissioners,” said a senior official of the State Industries Department.

Of the total 3,53,556 companies in Maharashtra, the MCA found 80,000 to be dormant. The list was forwarded to the State early last year. The companies registered under the Companies Act were defunct for a long period and were given the status of ‘under process of striking off’. Section 248 empowers the Registrar to remove the names of the companies from the ROC if he has reasonable cause to believe a company has failed to commence business within one year of corporation or has not been carrying out business for a period of two preceding financial years.

Senior officials said the Government has also devised a mechanism to ensure those companies who had approached the National Company Law Tribunal and got their names removed from the red list were considered in future. “We have a dozen odd cases where the firms have contended closure in tribunal. We have set up a mechanism to deal with such firms,” the official said.

Last year, the Government had identified nearly 35% of the 18 lakh companies registered in India to be inactive.