As of November 14, 2024, there are 27,75,567 registered companies in India, with 17,83,418 active companies. Over the past five years, a significant number of companies have failed to file their annual returns and audited financial statements. For instance, in 2022-23, 5,30,076 companies did not file financial statements, and 5,14,343 failed to file annual returns. The Ministry of Corporate Affairs (MCA) takes various actions against these defaulting companies, such as filing prosecutions under sections 92, 96, 99, and 137 of the Companies Act, 2013, or striking off companies under Section 248(1). In the last five years, 322 prosecutions were filed, and 1,39,136 companies were struck off for non-compliance. The term “shell company” is not defined under the Companies Act, but the government takes action against companies involved in fraudulent activities, including diversion and siphoning of funds, when violations are found.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
LOK SABHA
UNSTARRED QUESTION NO. 36
ANSWERED ON MONDAY, 25TH NOVEMBER 2024/
Agrahayana 4, 1946 (Saka)
Action Taken against Defaulter Companies
36. Shri S Venkatesan :
Will the Minister of CORPORATE AFFAIRS ……… be pleased to state:
a. the number of registered companies exists in the country as on date;
b. the number of registered companies which have not filed returns with Audited Statements during the last five years;
c. the details of action taken against such defaulting companies; and
d. the number of companies which were detected as Shell companies or indulged in money laundering?
ANSWER
Minister of State in the Ministry of Corporate Affairs; Minister of State in the Ministry of Road Transport and Highways.
(Shri Harsh Malhotra)
(a) The number of registered companies as on 14thNovember, 2024 is 27,75,567 and the number of active companies in India as on 14th November, 2024 is 17,83,418.
(b) The number of Companies who have not filed the Annual Returns and Audited Financial Statements during the last five years are shown below:
| Financial Year | No. of Companies who have not filed Financial Statements | No. of companies who have not filed Annual Returns |
| 2018-19 | 1,79,697 | 1,75,034 |
| 2019-20 | 2,18,237 | 2,19,854 |
| 2020-21 | 2,61,785 | 2,58,961 |
| 2021-22 | 3,70,886 | 3,70,021 |
| 2022-23 | 5,30,076 | 5,14,343 |
(c) & (d) : Registrar of Companies take action against the defaulting companies who fail to file their Annual Returns and /or Financial Statements by either filing prosecution under sections 92, 96, 99, 137 of the Companies Act, 2013 or by striking off the name of the companies under section 248(1) of the Companies Act, 2013 read with the Companies (Removal of names of companies from the Register of Companies) Rules, 2016. Further, total 322 prosecutions have been filed during the last five years against the defaulting companies and total 1,39,136 companies have been struck off for non-filing their Annual Returns and audited Financial Statements. There is no definition of “Shell Company” under the Companies Act. However, action is taken against companies for diversion, siphoning or fraud etc. as the case may be, whenever a contravention of the Companies Act, 2013 is found.
ANSWER Minister of State in the Ministry of Corporate Affairs; Minister of State in the Ministry of Road Transport and Highways (Shri Harsh Malhotra) (a) to (d): As per Section 455(1) of the Companies Act, 2013, any company which has not been carrying on any business or operation or has not made any significant accounting transaction during last two Financial Years (FYs) or failed to file Financial Statements (FS) and Annual Returns (AR) for last two FYs is considered as an inactive company. Under Section 248(2) of the Act, a company may voluntarily file application for strike off if it has not commenced business within one year of incorporation or not been carrying on any business or operation for a period of two immediately preceding FYs without obtaining the status of a dormant company. The Ministry has set up Centre for Processing Accelerated Corporate Exit (C-PACE) centralizing the voluntary strike off process of inactive companies in a fast-track mode in order to facilitate ‘Ease of Doing Business’. All such inactive companies may now file application for voluntary strike off with RoC, C-PACE after extinguishing all of their liabilities. As on 30th November 2024, there are 164,471 registered companies with the Registrar of Telangana, which includes active and inactive companies and companies closed, under liquidation, under process of striking off, dormant etc. As per MCA 21 data,33,922 companies for the FY 2022-23 and 55,329 companies for FY 2023-24 have not filed their FS and AR in the Telangana state. There is no requirement for introducing any scheme relaxing filing of pending returns, since as a permanent measure a proviso has been added to Rule 4(1) of the Companies (Removal of Names of Companies From the Register of Companies) Rules, 2016 vide notification dated 10.05.2023 relaxing the requirement of filing of overdue Financial Statements and overdue Annual Returns after the Financial year in which the company ceased to carry its business operations as a further measure of ease of doing business. Hence, an inactive company may file application for strike off without any requirements of filing FS and AR after the FY in which it ceased to carry on any business. This relaxation in the Rules is applicable to all eligible companies including companies of Telangana.
more than 10 lakhs companies not filed their annual returns. This was mainly due to technical glitches and hefty penalty.
On the above, I like to bring, for a small company, who has not filed financial statement and annual return due to unavoidable circumstances has to pay around Rs.15,33,000.00 as additional fees to update the return as on date. I have herewith mentioned a small calculation regarding this for your reference
Year Financials Statements Annual Returns
2018-19 – Rs.2,19,000.00 Rs.2,19,000.00
2019-20 – Rs.1,82,500.00 Rs.1,82,500.00
2020-21 – Rs.1,46,000.00 Rs.1,46,000.00
2021-22 – Rs.1,09,500.00 Rs.1,09,500.00
2022-23 – Rs.73,000.00 Rs.73,000.00
2023-24 – Rs.36,500.00 Rs.36,500.00
Total – Rs.7,66,500.00 Rs.7,66,500.00
Total Fees Amount – Rs.15,33,000.00
So it is very much difficult and a big financial burden for small companies, whose total networth is very much less than that of the additional fees for the company.
Ministry Have no right to punish the defaulters.for following reasons:
*I paid well in advance to my CA/CS and constantly reminded them for compliances but they never did.
*My CA never registered himself in MCA and recently he said that he won’t be able to fill the company tax.
*Bank in an act of corruption ruined my business by abruptly closing my only account and made huge losses to my company.
*NCLT which in COVID day’s recruited railway background judge’s and in an act of corruption ruled against my company and later reversed the ruling.NCLT even the submitted documents were missing in the NCLT office.Complaints have been registered.
*Corruption in every department.
do any body think govt.after providing such filthy ecosystem for MSME has the rights to punish any defaulter entity???