Corporate exits now happening in 70-90 days under C-PACE, says govt in LS

The average time for processing such applications has reduced to 70-90 days from over six months earlier

A total of 11,855 companies have been struck off till November 15 of the current financial year 2024-25 (FY25) through the Centre for Processing Accelerated Corporate Exit (C-PACE), the government told Lok Sabha in response to a query.

 

The average time taken for processing such applications has come down to 70-90 days from over six months earlier.

 

India has a total of 27,75,567 registered companies and the number of active companies was 17,83,418 as on November 14, 2024.

 

The C-PACE was launched to facilitate ‘Ease of Doing Business’ with an idea to eliminate the necessity for physical interactions with stakeholders. It was established to facilitate and speed up the voluntary winding up of these companies to less than six months with process re-engineering. Earlier the STK forms, which deal with removal of companies, were dealt by the state registrar of companies. 

 

According to the data given in the Parliament, 13,560 companies were struck off under section 248(2) of the Companies Act, 2013 through C-PACE in FY24.

 

In a notification dated August 5, 2024 the Ministry of Corporate Affairs had empowered the C-PACE for processing of eForms related to striking off Limited Liability Partnerships (LLPs) as well. 

 

As on 15th November, 2024, 3,264 LLPs have been struck off under section 75 of the Limited Liability Partnership Act, 2008, according to MCA. 

 

The MCA, in the last five years -- from FY20 to FY 24 -- has also struck off 2,33,566 companies for defaults such as failure to commence business within one year of incorporation, not obtaining the status of a dormant company among others. 

 

The information was provided by Minister of State for Corporate Affairs Harsh Malhotra in response to a Lok Sabha question. 

 

The Registrar of Companies which can take action against the defaulting companies who fail to file their Annual Returns or Financial Statements has filed 322 prosecutions against such entities in the last five years, according to a Lok Sabha reply.    ON Fast track 

11,855 companies struck off in FY25 under C-PACE

Earlier, STK forms, which deal with removal of companies, were dealt by the state registrar of companies 

C-PACE now processes limited liability partnerships (LLPs) strike-offs

3,264 LLPs struck off under Section 75 of the LLP Act

Since FY24, 13,560 companies struck off under Section 248(2) of the Companies Act, 2013

Over 233,566 companies struck off in the past five years for non-compliance