While the term 'shell company' is not defined under the Companies Act, Corporate Affairs Minister Arun Jaitley told the Lok Sabha that many such entities have been found to be indulging in large scale tax violations.
Over 1.62 lakh companies that have not been carrying out business activities for long have been deregistered and a series of actions are being taken against shell firms, the government said today.
While the term 'shell company' is not defined under the Companies Act, Corporate Affairs Minister Arun Jaitley told the Lok Sabha that many such entities have been found to be indulging in large scale tax violations.
"However, the Registrars of Companies (RoCs) have removed 1,62,618 companies from the register of companies as at July 12, 2017 after following the due process under Section 248 of the Companies Act, 2013," he said during Question Hour.
His response was to a query on whether a large number of shell companies and entities that are primarily used as conduits for dealing in black money and hawala transactions have come to the notice of the government.
Section 248 provides powers to the RoC to remove the name of a company from the register on various grounds including that the entity was not carrying out any business for two preceding financial years.
Responding to supplementary queries, the minister said the task force on shell companies has submitted its recommendations and actions are being taken.
To a query about action taken against the directors of companies that indulge in such violations, the minister said where there is infraction of law, action is taken under the relevant provisions.
(This article has not been edited by DNA's editorial team and is auto-generated from an agency feed.)
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