More than 17,200 new companies were set up in the country from April to June this year while a total of 13.7 lakh companies were active at the end of June, Minister of State for Corporate Affairs Rao Inderjit Singh on Monday told the Lok Sabha. Citing official data, he said that a total of 17.7 lakh companies were active at the end of June. The MoS for Corporate Affairs said that the incorporation of new companies and closure thereof is a routine affair depending upon the objectives of incorporating the company on a case-to-case basis.
Inderjit Singh said, "The number of new companies incorporated in the country under the provisions of the Companies Act, 2013 from April 2021 to June, 2021 is 36,191 as compared to 18,968 number of new companies in the corresponding period of last year."
Rao Inderjit Singh, who took charge as the MoS at the ministry earlier this month said that there was an increase of 17,223 new companies compared to the corresponding period of last year. This statement by the Minister was in response to a query on whether the second wave of COVID-19 had adversely impacted the economic conditions for the companies in the country.
Informing that amid the COVID-19 pandemic, The Ministry of Corporate Affairs had taken various steps, including allowing firms to conduct their annual general meeting through video conferencing or other audio-visual means, Singh said that according to the data, there were a total of 21,87,026 registered companies till June 30, 2021.
He said, "Out of them, 13,76,366 companies were active and remaining 8,10,660 were not active due to various reasons like liquidated/ dissolved, amalgamated/ merged with other companies, struck-off and converted to Limited Liability Partnership (LLP). In 2020-21, as many as 14,674 companies were closed down, while the number stood at 70,972 in 2019-20. A total of 1,43,223 companies were shuttered in 2018-19."
Remarking that there is no verifiable information that says that the closure of the company is due to a lack of business acumen, the Minister said that 80,720 independent directors were appointed by companies in the last 3 financial years. He said that the appointment of independent directors is a continuous process and whenever the post of the independent directors falls vacant, the respective companies are required to comply with the provisions of Companies Act, 2013. The separation of post of chairperson from MD/CEO "is considered to enhance corporate governance, therefore, apprehension that it would weaken the position of promoters is misplaced", Singh added.