Thursday, August 10, 2017

9,625 shell firms in Gujarat lose registration

In a major crackdown on shell companies, registrations of 9,625 shell companies in Gujarat have been cancelled. As on July 21, 2017, 1,62,618 shell companies across India have been removed from the register of companies.

The ministry of corporate affairs' data recently tabled in Lok Sabha shows that Gujarat is among the top 10 states when it comes to deregistration of shell companies. Registrar of Companies (ROC) in Mumbai, Delhi and Hyderabad have deregistered 33,000, 22,863 and 20,588 shell companies respectively.
"The ROCs have removed 1,62,618 companies from the register of companies as of Juy 12 after following the due process under section 248 of the Companies Act, 2013," minister of state for corporate affairs Arjun Ram Meghwal stated in a written reply to Lok Sabha. The government is leaving no stone unturned to turn the heat on shell companies. Recently, stock exchanges, following the Sebi directive, have stopped trading in as many as 331 suspected shell companies, of which 34 are from Gujarat.

As part of its drive against shell or bogus companies, sta te commercial tax department in April this year had carried out searches and unearthed transactions worth Rs 1,300 crore by 29 bogus companies. "Over 500 shell companies were identified and their registration was cancelled by the end of July ," said Bhavin Pandya, additional commissioner, state GST department.

"Many a time, traders ta ke registration number but they do not carry out business activities and indulge in bogus billing. Most of the ca ses are related to bogus billing so we strike off the registration from the same date on which the company was re gistered by the department.The procedure is called `Void Ab Initio' which means the company never existed," said VV Dave, joint commissioner of State GST department.

"Apart from this, entities found involved in Hawala or money-laundering through fake companies were also deregistered and they usually face legal actions," he added.

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