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NEW DELHI: The government is in the process of removing 28,790 companies from official records at the end of July, for not having filed annual returns for two consecutive years, according to official data from the ministry of corporate affairs.
At the end of July, India had close to 15 lakh active companies, including 2.6 lakh firms which were incorporated in the preceding 18 months. Data showed that 2,448 companies have so far obtained ‘dormant’ status as per provisions of the Companies Act. Businesses that secure dormant status are not struck off from official records.
Data also showed that over 7,000 companies are currently under liquidation. Of the total 23.8 lakh firms so far registered in the country, over 8.4 lakh have been closed for various reasons, leaving only 14.95 lakh active in the country.
The companies that are being removed from records are defunct. Their removal is part of an exercise to weed out the system of inactive ones.
Data also showed that in July, over 15,000 companies including 853 one-person companies were registered with over ₹22,00 crore authorised capital. Authorised capital is the maximum a company can raise and shows the investment intentions of its promoters.
Companies not undertaking any economic activity, and hence called defunct, also often do not file their annual returns leading to their removal from records. These companies are not to be confused with bogus entities, which are used by crooks in financial crimes such as money laundering. Such companies meet legal compliance requirements on paper to avoid attention. They get red flagged because of certain discrepancies and irrational transactions.