Government Set To Probe About 4.5 Lakh ‘Non-Compliant’ Companies
The government is set to probe about 4.5 lakh companies that failed to comply with its directive of submitting details such as their statutory auditors and pictures of registered offices, according to a senior government official.
Of the total 11.67 lakh registered companies, about 7 lakh companies have filled the INC-22A form that had to be filed by every company incorporated on or before Dec. 31, 2017, the official said on condition of anonymity. Around 4.5 lakh companies have failed to comply with the government's directive, and the Ministry of Corporate Affairs is investigating these companies to check if these are shell firms, the official said.
The government had notified Companies (Incorporation) Amendment Rules, 2019 in February, which required all firms to fill e-form ‘Active' or Active Company Tagging Identities and Verification by April 25, 2019. The deadline was later extended till June. Companies failing to file the e-form by the deadline had to be marked as “Active-non-compliant”.
This, according to Atul Pandey, partner at Khaitan & Co., will help the government in identifying shell companies and taking action against persons who use shell companies to illegally route funds.
Out of these 4.5 lakh companies, the corporate affairs ministry has found that around 20,000 companies have not yet appointed company secretaries, and have failed to fill the INC-22A form, the official said. The form asks companies to provide details of their company secretaries.
Pandey, however, said that companies which inadvertently could not file the INC-22A forms should be given time if the delay is justified.
The government suspects most of the remaining companies to be shell or dormant companies, and some of them to have compliance issues, the official cited earlier said, adding that the ministry is in the process of segregating these 4.5 lakh companies into different categories to take action against them.
The ministry, Pandey said, could make this as an annual or biannual exercise in the future to ensure a periodic clean-up of the system.
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