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Office not registered? It may be classified as a shell firm, says panel

The government has already struck off 226,000 companies from the register for not filing statutory returns

Veena Mani  |  New Delhi 

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The panel has also made recommendations on remuneration for independent directors

If the office of your company is not at the registered address you have given to the (RoC), it might soon be categorised as a shell firm.

An expert committee reviewing various provisions in the Act has recommended that those firms which do not maintain a registered office should be struck off the Earlier, the government had struck off names of only those that had not filed returns.

Committee members said this would prompt the government track the directors of such companies. Till now, the government has been cancelling registration only to track “vanishing” firms — firms that exist only on paper.

The government has already struck off 226,000 companies from the register for not filing statutory returns. Notices to another 225,000 companies are being sent for similar lapses.

ALSO READ: After targeting over 200,000 shell firms, govt is trying to weed out LLPs

As far as “vanishing” companies are concerned, the government has another drive to track each of them.

As many as 77 out of the 200 “vanishing” companies that came under the scanner between 1996 and 2004, continue to remain missing, even as others have been traced. Many of these untraceable companies did not list after filing for an initial public offering (IPO).

About 100 firms responded to notices issued on them. The is still trying to track the missing firms.

According to government records, these companies have been termed as “vanishing” as their directors are also not traceable. First information reports have already been filed against 70 of them.


ALSO READ: Over 226,000 shell companies de-registered in FY18, says Finance Ministry

The panel has also made recommendations on remuneration for independent directors.

It has said the remuneration of an independent director should be capped at 20 per cent of their gross annual income. Apart from this, the committee has recommended ways to declog the

First Published: Thu, August 30 2018. 22:58 IST
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