Government freezes bank accounts of over 2 lakh suspected 'shell' companies
06 September 2017
The government today said that the names of over 2 lakh firms have been struck off the register of the Register of Companies (RoC) for failing to comply with regulatory requirements and action has been initiated against these companies as part of its crackdown on illegal transactions and tax evasion.
The finance ministry said it has frozen the bank accounts of 209,032 suspected shell companies in the latest action against companies that have no active business operations or assets.
"Government has stepped up decisive action against companies falling within the ambit of Section 248 of the Companies Act. The names of 2,09,032 companies have been struck off from the Register of Companies (RoC)", the ministry said in a statement.
The announcement comes months after authorities ordered nearly 200,000 such firms to be shut down.
Directors and authorised signatories of these de-registered companies will not be able to operate bank accounts without the sanction of the National Company Law Tribunal (NCLT) as they will now become ex-directors or ex-authorised signatories, the finance ministry said.
The restoration, as and when it happens will be reflected by change in the status of the company from 'struck off' to 'active'.
The department of financial services has, through the Indian Banks Association (IBA), advised all banks that they should take immediate steps to put restrictions on bank accounts of such struck off companies, it said.
The statement further said that banks have been asked to employ 'enhanced diligence while dealing with companies' and keep a watch on companies which are defaulting in filing financial statements or annual returns.
Earlier, on 30 August, the finance ministry had said that the transactions of more than 3 lakh registered companies are under the radar while 1 lakh companies were struck off the list.
The government had already identified more than 37,000 shell companies which were engaged in hiding black money and hawala transactions.
Around 163 companies which were listed on the exchange platforms were also suspended from trading, pending submission of proof documents.