Union Minister of State for Corporate Affairs has informed that under the Special Drives taken by Registrar of Companies (RoC), 3,82,875 number of companies ware struck off u/s 248 (1) of the Companies Act till the financial year 2020-21.
The Minister stated that there is no definition of the term “Shell Company” in the Companies Act, 2013 (the Act). It normally refers to a company without active business operation or significant assets, which in some cases are used for illegal purpose such as tax evasion, money laundering, obscuring ownership, benami properties etc.
Giving more details, the Minister stated that the RoC struck off those companies after following the due process of law from the Register of companies when RoC has reasonable cause to believe that those companies are not carrying on any business or operation for a period of two, immediately preceding financial years.
The RoC also verifies that such company has not made any application within such period for obtaining the status of a dormant company under Section 455 of the Act.