New Delhi (IANS) The Ministry of Corporate Affairs (MCA) has identified and struck off over 3.8 lakh shell companies during FY18-20.
In a reply to the Rajya Sabha, Minister of State for Finance and Corporate Affairs, Anurag Singh Thakur stated that there is no definition of the term "shell company" in the Companies Act, 2013.
It normally refers to a company without active business operation or significant assets, which in some cases are used for illegal purposes such as tax evasion, money laundering, obscuring ownership, benami properties among others.
The Special Task Force set up by the government to look into the issue of "shell companies" has 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 such companies, he said.
"Based on non-filing of Financial Statements (FS) consecutively for two years or more, 'shell companies' were identified and after following due process of law, 3,82,875 number of companies were struck off during the last three years up to financial year ended 2020," Thakur said.
The Minister further said that no companies have been struck off during the current financial year.