Between Apr and Feb, over 10K cos strike off from RoC voluntarily

By: ENS Economic Bureau | Ahmedabad/gandhinagar/new Delhi, New Delhi |
March 11, 2021 3:00:28 am
OVER 10,000 firms voluntarily sought to have themselves struck off from the Ministry of Corporate Affairs’ (MCA’s) Registrar of Companies (RoC) between April 2020 and February 2021, in line with information collected by the Ministry.
Experts famous that strict monitoring of compliances, coupled with worsening enterprise prospects, might have contributed to a lot of non-operational firms making use of to be struck off from the RoC relatively than bearing the price of assembly compliances or fines.
“A total of 10,113 number of companies during the year 2020-2021 (from the month of April 2020 to February 2021) have been struck off under Section 248 (2) of the Act,” stated Minister of State for Corporate Affairs Anurag Singh Thakur in a written reply to the Lok Sabha.
Section 248(2) of the Companies Act offers with an organization voluntarily in search of to be struck off from the RoC, after extinguishing its liabilities and getting approval from 75 per cent of members by way of paid-up share capital. Companies that haven’t began operations one yr after registering the corporate or in the event that they haven’t had enterprise operations over the 2 previous monetary years can apply to be struck off underneath this Section.
Thakur added the MCA had not run any drive to strike off firms throughout 2020-21. The MCA had carried out a drive to strike off inactive and shell firms between FY18 and FY20, putting off about 55,000 firms from the RoC until March 2020.
Sunil Kumar Sinha, principal economist at India Ratings and Research, stated a basic tightening of monitoring mechanisms and worse prospects for enterprise might have contributed to the big variety of inactive firms being struck off voluntarily.

“Even if you have zero operations, you have to file annual returns, you have to go to a chartered accountant to file financial statements and all this becomes difficult proposition for a company not conducting any business,” stated Sinha, noting that the autumn in demand attributable to Covid can also have additional contributed to non-operational firms deciding towards beginning or restarting operations.