October 17, 2019 | 4:36 PM IST
Market

Over 6L firms ‘closed’ in FY19 said FM Sitharaman

Over 6.8 lakh companies registered with the the Ministry of Corporate Affairs –primarily located in Maharashtra and Delhi- shut down in the Financial Year 2019, finance minister Nirmala Sitharaman recently updated the Parliament. It may be noted that there were around 19 lakh companies registered with the ministry and the ‘closed’ companies make for 36 per cent of the total firms registered with the MCA. The actual data states 6,83,317 firms called it a day out of 18,94,146 registered ones.

This was after the government had undertaken a rigorous ‘special drive’ to identify and score off companies that failed to file their financial statements or annual returns for more than two straight financial years. They were termed as ‘defunct’ under Section 248(1) of the Companies Act, 2013 and could be majorly the reason for the increased numbers, she said.

The FM added that the numbers saw a slight increase in the FY 2018 there is a huge leap from the 20 per cent shutdown recorded prior to that period. While Maharashtra topped the chart with 1,42,425 firms, Delhi followed at 1,25,937. The other two states that followed closely included Tamil nadu and West Bengal. Reports claimed that in FY18 and FY19, the Registrars of Companies scrapped the names of 2,26,166 firms and 1,12,797 firms respectively from the two cities.

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