Govt imposes ₹55 cr penalties on 703 companies for Companies Act violations

The government imposed penalties totalling over ₹55 crore on 703 companies for non-compliance with the provisions of the Companies Law in the first nine months of the current financial year.

While providing the data in a written reply to the Lok Sabha on Monday, Minister of State for Corporate Affairs Harsh Malhotra said there was no trend indicating an increase in non-compliance with the provisions of the Companies Act, 2013.

For non-compliance, the Corporate Affairs Ministry penalised 703 companies during the nine-month period ended December 31, 2025.

During the same period, the total penalties imposed on these companies stood at little over ₹55.49 crore.

For 2024-25 fiscal, as many as 1,066 companies were penalised and the total fines amounted to ₹109 crore.

The data also showed that little over ₹7.51 crore was recovered as penalties in the first nine months of 2025-26 financial year.

Meanwhile, a total of 2,03,107 companies were struck off the official records under the Companies Act in the last nearly six years till December 31, 2025.

Out of them, 1,05,962 companies were struck off under Section 248(1) and 97,415 companies were removed under Section 248(2).

Section 248(1) allows a Registrar of Companies (RoC) to strike off a company on various grounds while Section 248(2) permits a company to seek removal from the official records.

According to the minister, the Companies Act has adequate provisions to ensure financial accountability and transparency in the management of companies.

"Enforcement actions, including adjudication, compounding and court convictions, have led to the penalisation of such companies for non-compliance. These enforcement actions are monitored regularly," he said.

In a separate written reply, Malhotra said the ministry uses Red Flag Indicators, including features such as nil /insignificant business, nil/ insignificant assets and company not maintaining registered office for suitable regulatory actions.

Under the ministry's MCA-21 portal, a risk profiling rule-based analytical system for compliances has been developed, he added.