4 lakh shell companies to face deregistration | Fusion - WeRIndia

The government has launched an offensive strike against shell companies which are used for transmission of black money.

As they started it, about 4 lakh out of the 11 lakh active Indian companies are facing the threat of being deregistered. These 4 lakh companies are facing action because they failed to file their returns for three financial years.

Since one month, notices were being sent to these 4 lakh companies since they failed to file returns for 2013-14 and 2014-15 with the registrar of companies.

They did not file for 2015-16 financial year either, but they still have time to do it. These companies are now given 30 days to make sure they file their returns. If they don’t do it, the government is planning to deregister them immediately.

Furthermore, the ministry of corporate affairs (MCA) is also planning to announce the names of companies who do not file to make sure that the defunct companies cannot do transactions.

The names along with their director’s names will also be sent to the income tax department, banks and the Reserve Bank of India.

For the sake dormant companies which are legitimate, the Companies Act allows a dormant tag. However, not many companies chose to opt for it.

According to MCA, these 4 lakh companies may or may not be doing any business and could just be shell companies. This is why they are trying to find out their status.

After this move, the government will be finding companies that have low turnover but have issued shares at a hefty premium or have high reserves.

These are the kind of companies which are usually are shell companies.

They accept cash issue shares at a premium rate and then they send the funds through a series of companies to make the money legitimate.

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