The Ministry of Corporate Affairs (MCA) has announced that, over the last three financial years, a total of 40,949 companies have been removed from the corporate registry under the Companies Act, 2013. This initiative aims to eliminate non-operational and shell entities, thereby enhancing the integrity of the corporate landscape.
Minister of State Shri Harsh Malhotra, in answer to a Lok Sabha unstarred question dated July 21, 2025, shows that the Ministry of Corporate Affairs (MCA) has conducted strike-off drives pointing the companies that did not undergo any business or operations for the preceding two fiscal years and are unable to follow the regulatory liabilities like filing declarations or subscribing to the capital at incorproation.
In the financial year 2022-23, the strike-off drive was conducted.
The data of the government state-wise exhibit an action specifically in Maharashtra (8,329 companies), Delhi (5,873), Karnataka (4,803), Tamil Nadu (2,771), and Uttar Pradesh (2,838).
23 companies alone in Saharanpur district, Uttar Pradesh, were struck off between 2023 and mid-2025, reflecting localised enforcement.
MCA to safeguard genuine companies from accidental deregistration complies with the procedural safeguards u/s 248(1) of the Companies Act. For the restoration of company names, dissatisfied parties can appeal before the National Company Law Tribunal. From this procedure, the due process can be ensured and prevent the incorrect removal from the corporate registry.
In the Companies Act, there is no formal legal definition of a shell company at present. The government specified no immediate plans to define the same term, even after its relevance in financial crime investigations.
Various measures have been executed by the government to make statutory compliance stronger and ease corporate governance.
The implementation of enhanced accountability measures involves setting requirements for key managerial personnel and ensuring effective supervision by the board. This framework includes the mandatory maintenance of comprehensive books of accounts, conducting regular audits by independent chartered accountants, and the requirement to file resolutions and returns with the ROC. These practices are designed to promote transparency and uphold financial integrity within organisations.
Introduction of the Centralised Registrar of Companies (CRC) to standardise the company and LLP incorporation processes all over the country. Changes to the definition of small companies and the introduction of small LLPs with relaxed compliance and fee structures to lessen statutory burdens.
Development of the Centre for Processing Accelerated Corporate Exit (C-PACE) to quicker company strike-offs and ease a faster exit process, supporting ease of doing business since May 2023, and Extension of C-PACE authority in August 2024 to cover Limited Liability Partnerships (LLPs).
The Serious Fraud Investigation Office (SFIO) plays a vital role in detecting and addressing financial fraud. It investigates companies flagged for suspicious activity based on inputs from registrars, special resolutions, matters of public interest, or government directives. Comprising a team of multidisciplinary experts, the SFIO leverages advanced technological tools to conduct its inquiries.
With the rollout of the MCA21 Version 3 platform in July 2025 and the e-adjudication module in September 2024, compliance monitoring and adjudication have become more automated and efficient—enhancing transparency, speeding up enforcement, and strengthening regulatory oversight.
The same crackdown on dormant companies signifies the devotion of the government to keep a clean and trustworthy corporate sector is significant for enhancing the confidence of investors and ensuring the integrity of the financial ecosystem of India.
Source: Ministry of Corporate Affairs, Government of India, Lok Sabha Unstarred Question No. 10 Answered July 21, 2025.
