More than 51,600 companies removed from the registers

At the end of September, more than 2,450 companies were given inactive status and will not face any action for not filing annual returns, the ministry said in a monthly update. He also said that 51,693 companies are in the process of being deregistered.

Companies run the risk of being struck off the official registers under Section 248 of the Companies Act if the Registrar of Companies has reason to believe that a company has carried on no business in the two financial years previous ones and did not request inactive status.

Action against failing companies is important as it may also expose the directors of those companies to regulatory action.

“One of the consequences of failing to file annual reports or financial statements for three consecutive years is that it results in the disqualification of directors,” said Noorul Hassan, partner at Lakshmikumaran & Sridharan Attorneys.

Unlike in the recent past, the government has not waived additional fees imposed on companies for late filing of financial statements and annual returns this year, as the economy has stabilized and the country is on the verge of emerging from the pandemic.

Companies are required to hold their annual general meeting (AGM) within six months of the end of the financial year and they have one month from the date of the AGM to file financial statements and 60 days from from the date of the AGM to file the annual declarations. The supplement is ₹100 for each day late.

The ministry is currently in the process of revamping its e-filing portal with a new version aimed at facilitating data analysis, research and monitoring for the regulator.

The new security features implemented in the MCA21 Portal are designed to facilitate real-time technology monitoring of company incorporation and statutory filings, so that government officials can detect entities that meet risk parameters.