As many as 14,848 registered Indian companies were found defunct or were struck off official records in January, data released by the ministry of corporate affairs (MCA) showed, amid a government crack down on money laundering and tax evasion.

The total number of companies registered with the Registrar of Companies (RoC) at the end of January was 1.85 million. Of this, 670,318 companies were closed.

Within the overarching ‘closed’ category, 622,087 companies were either defunct or struck off under Section 248 of the Companies Act in January, compared to 607,239 in December, 2018.

Shell companies—entities that do not contribute to any economic activity—are often set up for money laundering or tax evasion.

Under Section 248 of the Companies Act, the RoC can remove a company from its records if it fails to commence business within a year of its incorporation, or has not carried out any operation for three years.

Data showed that of the 670,318 closed companies, 10,640 were dissolved or liquidated, 22,531 were merged or amalgamated, 10,086 were converted into limited liability partnerships (Llps) and 4,794 were converted into Llps and dissolved. The rest were either defunct or struck off the rolls.

Over 61% of the 1,850,860 registered companies were active at the end of January. Active companies are those that do not engage in fraudulent or illegal business, and carry on daily business operations or economic activity, while keeping a record of their financial statements.

As many as 12,464 companies were registered in January, of which 12,459 were non-government entities, while the remaining five companies were government entities, according to the data. State-wise, Maharashtra was in lead with 2,310 firms registered in January, followed by Delhi, UP , Karnataka and Tamil Nadu.

In terms of the spread of economic activity, 32,628 companies were involved in agriculture and allied activities, and 739,649 in services such as real estate, trading, finance and insurance. In the last five years, the government has taken certain steps to curb black money. It also cracked the whip on firms that remained dormant.

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