Number of companies voluntarily seeking removal of their name from the Registrar of Companies has already reached 54 per cent of last fiscal’s total in first three and half months of FY26, data presented in the Rajya Sabha showed. It is interesting to note that the number of new registrations has seen a growth of over 18 per cent in July.
Under section 248(2) of the Companies Act, 2013, such companies which voluntarily seek removal of their name from the Registrar of Companies after extinguishing all its liabilities are struck-off by following due process in the prescribed manner. Data, part of a recent written response by Minister of State in Corporate Affairs Ministry, Harsh Malhotra, showed that while the number of such companies was over 15,800 in FY25, in the current fiscal, as on July 16, it reached over 8,600.
Although the Minister has not given any reason for companies voluntary seeking names to be struck off by the Ministry, it is believed that one reason could be a weak consumption pattern, especially in urban areas. It is also believed that disruptions due to geo-political uncertainties might have pushed some businesses to down their shutter. It is important to note that the names of 24 companies were struck off between April 1 and July 16 as against 30 in entire fiscal of 2024-25 and 29 in 2023-24.
Apart from striking off names based on request from companies, there is also a provision under section 248(1) of the Companies Act, 2013 that names can be taken off through a special drive. Under this section there are three conditions for the companies which can be included in the special drive.
Firstly, such companies are not carrying on any business or operation for a period of two immediately preceding financial years. Secondly, they have not made any application within such period for obtaining the status of a dormant company under section 455 of the Act. Finally, the subscribers to the memorandum have not paid the subscription which they had undertaken to pay at the time of incorporation of a company.
“The last strike-off drive was carried out in the year 2022-23. Presently no such drive is going on,” Malhoyra said.
Meanwhile, monthly report by Corporate Affairs Ministry showed that 17,555 Indian and foreign companies were incorporated in July, which is 18 per cent higher than 14,887 a year earlier. Similarly, the number of LLPs that got registered in July rose by a quarter to 7,343.
