Home / News / India /  Nearly 41,000 companies face removal from official records

New Delhi: Nearly 41,000 companies are facing removal from the government’s official records for defaulting on filing annual returns for the past two years, showed latest data from the ministry of corporate affairs.

As on 31 August, the total number of companies that are in the process of getting struck off from the register has touched 40,942, the ministry said in its latest monthly newsletter. This is in addition to 2,455 companies that have so far obtained ‘dormant’ status.

The government routinely removes companies that have not filed annual returns for the preceding two years as part of a clean up drive.

Official data showed that the total number of active companies at the end of August has nearly touched 15 lakh including over 2.62 lakh companies set up in the last 18 months. Their annual statutory filings are not yet due. In August alone, 14,471 companies were set up, including 838 one-person companies. They together have an authorized capital of over 2,800 crore.

During August, Maharashtra reported the maximum number of company registrations with 2,660 firms, followed by Uttar Pradesh with 1,473 companies and Delhi with 1,378 companies. Business services topped the class of newly formed companies that were incorporated in August.

Companies that are not carrying on with any economic activity, and hence called defunct, 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.

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