MCA struck off approx 29000 Non-compliant Companies in FY21 and FY22

The Ministry of Corporate Affairs (MCA) had struck off as many as 29,059 non-compliant companies in FY21 and FY22, the Lok Sabha was told on Monday.

In response to an unstarred question, Rao Inderjit Singh, Minister of State for Corporate Affairs, stated that 3,21,325 new businesses were formed during the two financial years.

As of March 31, 2022, there are 23,26,640 registered businesses and 14,37,045 active companies. According to Section 248 (1) of the Companies Act of 2013, roughly 1.2 percent of all registered companies have been struck off.

Furthermore, according to MCA records, 97,023 companies had zero turnover in 2020-21 and 2021-22, he noted.

Non-compliances include failing to commence business within one year of incorporation, failing to carry on any business or operation for a period of two immediately preceding financial years and failing to make any application for obtaining the status of a dormant company within such period, failing to carry on any business or operations as revealed after physical verification, and so on.

Registrars of Companies (RoCs) take action to strike off the names of companies that have failed to submit statutory returns for the two immediately previous financial years, as it is assumed that the company is not carrying on business.

Singh, who is also Minister of State (Independent Charge) of the Ministry of Statistics and Programme Implementation and Minister of State (Independent Charge) of the Ministry of Planning, stated that the government has taken a number of steps to provide Ease of Doing Business, including the decriminalization of sections under the Companies Act 2013; lesser penalties for small companies, OPC, start-ups, Producer Companies, and so on; and a revision of the definition of listed companies.

The requirement for listed companies and NBFCs to invest 15% of the amount of debentures maturing in a specific year in specified instruments has been eliminated when such debentures are issued on a private placement basis, he noted.