The Ministry of Corporate Affairs (MCA), in its latest regulatory action, is preparing to strike off the names of more than 3,300 companies from the national register. This decision follows applications received under Section 248(2) of the Companies Act, 2013, wherein companies themselves seek removal on grounds such as failure to commence business or two years of inactivity.
Public notices for these removals were issued by various Registrars of Companies (RoCs) in April 2025, inviting objections from stakeholders. According to official data, these companies span across several states and union territories, including:
- 700+ in Maharashtra
- 500 in Delhi
- 350+ in Karnataka
- 200+ each in Gujarat, Uttar Pradesh, and West Bengal
The Companies Act allows voluntary removal of a company’s name once all liabilities are cleared and a special resolution or 75% shareholder consent is obtained.
Legal Grounds for Strike-Off and the Process Involved
Section 248(2) provides a legal exit route for companies that either never began operations or ceased to function. To qualify for removal:
- The company must clear all liabilities
- Pass a special resolution or obtain 75% shareholder consent
- File an application with RoC through Form STK-2
Once the application is submitted, the RoC issues a public notice to ensure transparency and provide an opportunity for objections from creditors, investors, or other stakeholders.
This move is seen as part of a broader effort to clean up the corporate ecosystem, making data more accurate and reducing regulatory clutter.
Active vs Dormant: India’s Corporate Landscape at a Glance
As of March 2025, India had 28.5 lakh registered companies, of which 18.5 lakh were active, as per the MCA’s monthly information bulletin. Maharashtra continues to lead with 19% of active firms, followed by Delhi (14%) and West Bengal (8%).
There’s also been an uptick in new incorporations and active companies in states like Uttar Pradesh, Maharashtra, and Telangana. Even union territories like Jammu & Kashmir have witnessed a jump, adding 143 new companiesbetween February and March 2025.
These trends reflect a diverse and evolving corporate base, where state-wise growth in entrepreneurship contrasts with the exit of non-performing entities.
ALSO READ: Call for Cyber Experts: Join FCRF Academy as Trainers and Course Creators
Implications and the Bigger Picture
While strike-offs may sound like a red flag, regulatory experts argue this is a healthy sign. “Removing inactive companies improves governance,” says a corporate law analyst. “It clears the system of shell entities and provides more reliable corporate data for regulators and investors.”
For companies seeking voluntary exit, this process avoids long-drawn liquidation, helping promoters move on cleanly. However, the MCA remains watchful of companies attempting misuse and has imposed safeguards against entities striking off with unresolved liabilities or ongoing legal disputes.