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Over 2.38 Lakh Shell Companies Identified, Struck-Off Between 2018-21: Govt Tells Parliament
Indian Currency (Representative image)
More than 2.38 lakh 'shell' companies have been identified and struck-off between 2018 to 2021, the government told the Rajya Sabha on Tuesday (27 July).
In a written reply to a question in Rajya Sabha, Union Minister of State for Corporate Affairs Rao Inderjit Singh said that there is no definition of the term “Shell Company” in the Companies Act and it normally refers to a firm without active business operation or significant assets, which in some cases are used for illegal purpose such as tax evasion, money laundering, obscuring ownership, benami properties etc.
The minister further stated that the Special Task Force set up by the government to look into the issue of “shell companies” has among other things recommended the use of certain red flag indicators as alerts for identification of shell companies.
"The government has undertaken a Special Drive for identification and striking off Shell Companies during the last three years," the ministry said, according to a Ministry of Corporate Affairs release.
The minister also tabled data of the number of the companies struck-off between 2018 and July 2021. According to the data, as many as 2,38,223 shell firms have been struck-off across the country in the last three years.
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