Govt taking action against shell companies

Govt taking action against shell companies
14/08/2017 , by , in News/Views

Speedy steps are being taken against shell companies but a balance needs to be maintained between the ease of doing business and ensuring that the firms are not misused, Union Minister Arun Jaitley said.

Jaitley, who is also the Corporate Affairs Minister besides holding the Finance and Defence portfolios, told the Lok Sabha that there is no definition for shell companies under the Companies Act but such enitities are used for round tripping of money.

The real owners behind such entities need to be identified and expeditious steps are being taken under the benami and Income Tax laws, the minister said during Question Hour.

Replying to supplementaries, Jaitley mentioned about markets regulator Sebi‘s action against suspected shell companies on the stock exchanges, saying “baazaar mein thoda uthal puthal hua (there was some turmoil in the markets)”.

On August 7, Sebi had asked the stock exchanges to take action against 331 suspected shell companies which were referred to it by the corporate affairs ministry.

While noting that a company can be registered in two days, Jaitley said a balance should be there in terms of ease of doing business and ensuring that the companies being set up are not misused. With technology, it is not difficult, he added.

Responding to a supplementary question by Congress member Shashi Tharoor, the minister said there is a distinction between dormant and shell companies.

There is potential for dormant companies being misused as shell companies but there is an additional instrument to deal with such entities, Jaitley said.

About admin