The Registrar of Companies is set to drop over 25,400 firms from official records for their failure to file annual returns for two years in a row, as per the corporate affairs ministry's latest monthly update.
In January, the Registrars of Companies (RoCs) removed 369 companies from its records for default in filing annual returns. So far this financial year, over 8,600 companies have been removed for this default, the data showed.
Analysts said the RoCs can strike off a company's name for various reasons. These include the company is not in operation or has not started business within one year of incorporation; the company is inactive or has not conducted any business for the previous two financial years.
A company can also apply to ROC to strike off its name. To do this, the company must pass a special resolution; get the consent of 75 per cent of members (in terms of the paid-up capital); extinguish all liabilities; a company must have fulfilled all its tax obligations and file all necessary tax returns before applying for strike-off.
A company status strike-off means that a company has been legally dissolved by the ministry of corporate affairs (MCA).
This is done when a company is no longer carrying on business is not compliant with certain legal requirements or is not paying its dues to the government or creditors.
The MCA may also strike off a company after a certain period of inactivity or when it has failed to file its annual returns or financial statements with the Registrar of Companies.
Removal of dead wood makes the registry more manageable for the authorities amid a steady rise in new registrations.
In January, 14,327 new companies were registered, with a paid-up capital of Rs 1,134 crore.
So far this financial year, over 1,18,250 companies have been registered, taking the number of active companies to over 1.66 million.
Nearly a fourth of the new company registrations in the month were in the industrial sector.
The ministry has now centralized the incorporation and voluntary winding up of businesses as well as processing of 12 statutory filing requirements.
