Narendra Modi government set to deregister another 50,000 companies to curb illicit money

Amid intensified efforts to curb illicit fund flows, the government expects to deregister this fiscal another 50,000 companies that have not been carrying out business activities for long, according to a senior official. The names of more than 2.26 lakh companies have already been struck off from official records and almost an equal number has been identified for further action. In 2018-19, the Corporate Affairs Ministry has identified nearly 2.26 lakh companies for continuously not submitting requisite filings for two or more years.

A senior ministry official said that around 70,000 companies that have not been carrying out business activities for long have been deregistered so far in the current fiscal. Another 50,000 such entities are expected to be deregistered during this financial year, the official added. The fiscal ends on March 31, 2019. Last month, Minister of State for Corporate Affairs P P Chaudhary said Registrars of Companies (RoCs) have identified around 2.26 lakh companies which have not filed their financial statements or annual returns for a continuous period of two or more financial years.

Exclusion of companies from the records would be done by the RoCs as per the rules and that it is a continuous exercise, he had said. Section 248 of the Companies Act -- implemented by the ministry -- provides powers to strike off names of companies from the register on various grounds, including for being inactive for long. 

There are concerns that shell entities are being used as conduits for illegal fund flows.