New Delhi, Dec 1: The government on Monday said 2,04,268 private companies have closed down during the last five years.
These companies have been shut down on account of amalgamation, conversion, dissolution and struck off from the records under the Companies Act, 2013.
According to data provided in a written reply by Minister of State for Corporate Affairs Harsh Malhotra to Lok Sabha, 20,365 private companies were closed down in 2024-25 while the count was at 21,181 and 83,452 in 2023-24 and 2022-23, respectively.
The number of shuttered private companies stood at 64,054 in 2021-22 and 15,216 in 2020-21.
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To a query on whether employees of the closed down private companies have been rehabilitated, the minister said there is no proposal before the government.
Meanwhile, as many as 1,85,350 companies have been removed from the official records in five financial years starting from 2021-2022, with 8,648 entities struck off till July 16 this fiscal.
Generally, under the Companies Act, 2013, entities can be removed from the official records if they are not carrying out business activities for long or companies can also seek voluntary removal after fulfilling various regulatory requirements.
To queries about shell companies and whether they are being used for money laundering activities, Malhotra, in another written reply, said that the term ‘shell company’ is not defined in the Companies Act, 2013.
Providing details in another written reply, the minister said a total of 1,85,350 companies have been struck off during the period from 2021-22 to the current financial year till July 16.
Out of the total, the maximum of 82,125 companies were struck off from the records in 2022-23, also the fiscal when the corporate affairs ministry had carried out a strike-off drive to weed out companies that have not been carrying out business activities for a long time.
On whether the government proposes to strengthen inter-agency coordination with Enforcement Directorate (ED) and Income Tax Department for monitoring of activities such as shell companies being used for money laundering activities, the minister replied in the affirmative.
“Whenever such instances are reported, the same are shared with other government agencies for monitoring such activities,” he said.
Meanwhile, Malhotra also said it is the stated policy of the government to gradually phase out exemptions and deductions while rationalising tax rates to create a simple, transparent, and equitable tax regime instead of providing region-specific tax incentives.
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“Moreover, the government has undertaken several reforms to promote investment and ease of doing business, including substantial reductions in corporate tax rates for both existing and new domestic companies,” he said.
The minister was responding to a question on whether the government proposes to formulate any policy to provide tax exemption or incentives to companies for setting up industries in backward and rural areas. (PTI)
