In its first drive during financial year 2017-18, registrar of companies(ROCs) identified and removed the names of 2,26,166 shell companies from the register of companies, disqualifying around 3,09,619 directors.

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While in the second drive, which is to be launched during the current financial year, a total of 2,25,910 companies have been identified for being struck-off under section 248 of the Companies Act due to non-filing of financial statements for the years 2015-16 and 2016-17.

These companies will be given an opportunity of being heard on their default and appropriate action will be taken after considering their response.

The task force on shell companies’, which was constituted in 2017, is taking pro-active and coordinated steps to tackle malpractices by shell companies or fraudulent companies.

The task force has met around eight times since its constitution to check the menace of these companies indulging in illegal activities.

These illegal activities could include showing transactions on paper as legitimate business transactions, which helps turn black money into white. This lets the business person avoid paying tax on the laundered money.

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Among the significant achievements of the task force are the compilation of a database of shell companies that comprises of three lists namely- Confirmed List, Derived List and Suspect List. The Confirmed List has a total of 16,537 confirmed shell companies while the Derived List has 16,739 companies and the Suspect List has 80,670 suspected shell companies.

To help the genuine corporates in regularizing their pending returns, the Condonation of Delay Scheme was launched in 2018 which benefited a total of 13,993 companies.

The ‘task force’ was established under the joint chairmanship of the revenue secretary and secretary, MCA, that includes department of Financial Services, CBDT, CBEC, CBI, ED, SFIO, FIU-IND, RBI, SEBI, DG GSTI and DG-CEIB as its members.

These efforts, according to the government, are aimed at promoting the cause of ‘ease of doing business’ and enhance the trust of the public.

First Published:Jun 8, 2018 1:02 PM IST