Indian companies to face Huge Problems

New Delhi, June 16: 25 to 30 percent of companies will be shut down soon. The government plans to shut down the companies for the last couple of years without any business activity. Looking to cancel their registrations. This decision was taken as part of a government initiative against shell companies.

The Corporate Affairs Ministry hopes to abolish registrations for companies that have not been inactive for the past two years using some of the provisions of the Companies Act. If a company has not been able to do any business for two years, it is in the provision of the regulator to decree those companies without getting any revenue. The government will issue notices to such companies to enforce it. Companies will need to respond within 30 days.

Officials have discovered that some companies have not been cynical over the past two years in order to identify the companies. Such companies are around 3 to 4 lakhs nationwide, almost 35 per cent. The central government hopes to take action on them. If they cancel their registrations, all those companies will be closed. Recently 2.25 lakh companies have been identified as hollow companies by the government.