Over a third of 1.7 mn registered firms closed due to illegal activities

More than one-third of the total 1.7 million registered companies in the country were shuttered as on end of October, latest official data showed.

While authorities step up their clampdown on companies suspected of being used as a conduit for illegal activities, the number of active firms stood at little over 11.30 lakh as on October 31.

The corporate affairs ministry, which is implementing the Companies Act, has so far struck off the names of around 2.24 lakh entities that have not been carrying out business activities for long.

"The total number of companies registered in the country as on October 31, 2017, stood at 17,04,319... there were 11,30,784 active companies as on October 31, 2017," the ministry said in a report for the month of October.

According to the report, out of the total, 5.35 lakh companies were closed down, 1,123 were assigned dormant status, 5,957 were under liquidation and 31,666 were in the process of being struck-off, among others.

"Out of the 5,34,674 closed companies, about 10,443 companies were liquidated/ dissolved; 4,92,735 companies were defunct (and hence struck-off); 19,984 companies were amalgamated/ merged with other companies; 6,719 companies were converted to LLP (Limited Liability Partnership) and 4,793 companies were converted to LLP and dissolved," it noted.

Among the active companies, the maximum were into business services with the number of such entities touching 3.34 lakh, followed by manufacturing (2.30 lakh), trading (1.50 lakh) and construction (1.03 lakh).

In the report, the ministry said a total of 7,556 companies were registered this October compared to 6,542 firms in the year-ago period.

"An analysis of registration of new companies during October 2015 to October 2017 indicates that monthly registration of companies has increased after hitting its lowest of 3,994 in April 2016," it added.

The companies registered in October 2017 had a collective authorised capital of Rs 1,394.61 crore.

"Of them 7,524 companies were registered as companies limited by shares with authorised capital of Rs 1,394.09 crore; 32 companies were registered as limited by guarantees with authorised capital of Rs 52 lakh," the report said.