Chandigarh, June 1: Around 10,000 shell or khoka companies in Haryana, Chandigarh, Punjab and Himachal Pradesh are under the scanner of the government because of their dubious existence on the ground.
The Ministry of Corporate Affairs suspects that these companies exist only on the paper as they have skipped mandatory annual filings for two years or more. Often shell companies are created to evade taxes and dupe gullible clients.
The ministry has details of these companies and they are likely to face strict action, including deregistration after June this year, government officials said.
The ministry will soon issue notices to such suspect cases, including 4,968 companies in Haryana, 580 in Himachal Pradesh and 4,092 in Punjab and Chandigarh.
“The government does not know whether they are deliberately not filing returns. So, notices are being sent to know the status,” said an official in the Ministry of Corporate Affairs based in Chandigarh. According to an official data, around 10,000 companies in the northern region were deregistered in previous financial year. Currently, there are 50,200 registered companies in the region.
The Companies Act, 2013 provides for deletion of names of firms from the register of companies if they do not carry on any business or operation for a period of two consecutive financial years. Accordingly, the Ministry had initiated action against over about 2.9 lakh shell companies in 2016-17. After a thorough probe, names of 2.26 lakh companies were struck off from the register of companies by December last year. Besides, the Ministry had also disqualified more than 2 lakh directors of such companies from holding the post of directors in any company.
So far, the Ministry has identified 9,640 defunct companies in the northern states alone which have not submitted their financial statements for two years (2015-17) and details of their business activities are also unavailable. If they fail to file the reply in a stipulated period of 30 days, their names would be removed from the registrar of companies, officials sources said.
Across India, the Registrars of Companies (RoCs) in various states and Union Territories have issued notices to more than two lakh firms under the Companies Act, 2013. As per the regulations, the RoC can seek explanation from a company if the latter has not commenced business within one year of getting incorporated under the Act.
The Organisation for Economic Cooperation and Development (OECD) defines a shell company as a company which is formally registered or otherwise legally organised in an economy but that does not conduct any operation in that economy other than in a pass through capacity.
Sourced from The Tribune
