Out of the total number of 17.95 lakh registered companies, 6.11 lakh were closed as on August 31, and 1,488 were classified as dormant.
Around 63% of the 17.95 lakh companies registered in India were active at the end of August, data from the ministry of corporate affairs showed amid the government continuing its clampdown on shell companies. There were more than 11.28 lakh active companies as of August-end. Active companies are those carrying out normal business activities and make their statutory filings to the stock exchanges on time.
Out of the total number of 17.95 lakh registered companies, 6.11 lakh were closed as on August 31 and 1,488 were classified as dormant. As many as 47,538 companies were in the process of being struck-off while 6,197 were under liquidation. Among those struck-off, 102 companies were in the process of being reactivated, according to the ministry.
Of the 6.11 lakh closed companies, 10,562 companies were liquidated, 5,65,342 companies were declared defunct. As many as 21,704 companies were merged with other companies, 9436 companies were converted to Limited Liability Partnership (LLP) and 4,794 were converted to LLP and dissolved.
In terms of economic activities, around 3.60 lakh companies were into business services and 2.31 lakh entities were engaged in manufacturing and other lines of work. Business services include IT, research and development, law and consultancy.
According to the corporate affairs ministry, Maharashtra has the highest number of companies (2,34,406), followed by Delhi (1,96,173) and West Bengal (1,34,005), as on August 31.
In June, the task force on shell companies set up by the government had identified more than 2.25 lakh such firms which will be removed from the register of companies in the current fiscal. These companies have not filed their financial statements or annual returns for the two financial years FY16 and FY17 and hence are chosen for removal from the register of companies under section 248 of the Companies Act. The move is part of a drive to weed out entities that do no economic activity and are a burden on the system. The ministry also combs through the database of companies to see if any of the companies are used for economic offenses like money laundering.
The corporate affairs ministry has already struck off over 2.26 lakh companies in previous fiscal for non-filing of financial statements or annual returns for a continuous period of 2 years or more.
To check tax evasion and prevent money laundering especially in the wake of demonetisation, the government had constituted a task force last year under the chairmanship of revenue and finance secretary Hasmukh Adhia and corporate affairs secretary Injeti Srinivas.
The task force has compiled a database of shell companies by the Serious Fraud Investigation Office. The authorities have frozen the accounts of those shell companies which have been removed from the list and their directors have been restricted from accessing the bank accounts of these companies, the government had said.