In the first half of the current fiscal year, 25,074 companies were deregistered by the Ministry of Corporate Affairs until September 2022. This is also 91 percent more than the number of companies that closed in the first half of 2019. 20; At that time 13111 companies were liquidated by MCA.
Delisting is the process of removing a company’s name from the Companies Register. Section 248 of the Companies Act, 2013 provides for the removal of a company’s name from the Register of Companies if it has not carried on any business or transaction and made no application during the two immediately preceding financial years. Within the specified period for obtaining the status of dormant company under Section 455 of the Act.
In FY21 and FY22, 4,080 and 12,855 companies were suspended in the country during the first and second waves of the pandemic, respectively. Currently, 7.8 million of the 24.1 million companies registered in the country have been removed from the list. In the first half of FY23, the maximum number of companies laid off in June was 13,479. This is actually 624 more companies than the number cut off in the first half of FY22.
Experts think there may be several reasons for this. “This could be pressure on the missile companies. There have been cases of individuals opening companies to avoid taxes. Abolishing them would be a good thing for the economy,” says Chanakya Shah, managing director of Holistique Business Consulting Pvt Ltd.
Lalit Kumar, partner at J Sagar Associates, agrees with Shah. “This could be a cleanup to close down dormant companies. The list can also include small companies that suffered a lot during the pandemic.”
“During September 2022, a total of 2,318 companies were suspended, of which 610 companies were removed from the Register of Companies by MCA, and 1,708 applications were received from companies to remove their names from the register,” MCA said. The September newsletter that came out earlier this year.
The MCA bulletins also show that 98 companies were liquidated or wound up between April and September 2022. It is one of 11,372 companies that have gone into liquidation in the country over several financial years. Liquidation is the process by which a company in debt ceases operations and sells its assets to pay off its liabilities. While 175 companies were liquidated in FY20, the number of companies liquidated in FY21 and FY22 were 28 and 55 respectively.