Over 10,000 companies were shut down voluntarily in the country from April 2020 till February this year, also a period when the coronavirus pandemic and subsequent lockdowns had significantly disrupted economic activities. The latest data available with the Ministry of Corporate Affairs (MCA) showed that a total of 10,113 companies were struck off under Section 248(2) of the Companies Act, 2013, in the current financial year till February.
The Section 248(2) implies that the companies had shut their businesses voluntarily and not due to any penal action. The ministry administers the Act and maintains the registry of companies on the basis of documents and applications filed.
In a written reply to the Lok Sabha on Monday, Minister of State for Corporate Affairs Anurag Singh Thakur said the ministry does not maintain any record of the companies that have gone out of business. “A total of 10,113 number of companies during the year 2020-21 (from the month of April 2020 to February 2021) have been struck off under section 248(2) of the Act. MCA has not run any drive to strike off companies suo moto during 2020-21,” he.
As per the ministry’s data, a total of 2,394 companies were struck off in Delhi while the number stood at 1,936 companies in Uttar Pradesh. Tamil Nadu and Maharashtra saw shutting down of 1,322 companies and 1,279 companies, respectively, during the April 2020-February 2021 period.
As many as 836 companies were shut down voluntarily in Karnataka, while it was 501 in Chandigarh, Rajasthan (479), Telangana (404), Kerala (307), Jharkhand (137), Madhya Pradesh (111) and Bihar (104). The numbers in other states and Union territories are Meghalaya (88), Orissa (78), Chattisgarh (47), Goa (36), Pondicherry (31), Gujarat (17), West Bengal (4) and Andaman & Nicobar (2), the data showed.
The data was provided in response to a query by a member seeking state-wise details of the number of registered companies which have gone out of business during the year 2020-21. In the wake of the pandemic, the central government had imposed a nationwide lockdown in late March 2020 to curb spreading of coronavirus infections and the restrictions began to be eased in May that year. In the latter months, many states had also imposed restrictions on movements amid number of spiralling coronavirus cases.
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