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The government has made significant strides in the process of corporate exit through the Centre for Processing Accelerated Corporate Exit (C-PACE), as shared in a recent Lok Sabha response. Here’s a structured summary of the developments:
Companies Struck Off in FY25
- 11,855 companies have been struck off under C-PACE by November 15, 2024, as part of efforts to streamline the process of winding up companies.
Improvement in Processing Time
- The average processing time for company strike-offs has improved significantly, now ranging from 70 to 90 days, compared to over six months earlier.
Total Registered and Active Companies
- As of November 14, 2024, India has a total of 27,75,567 registered companies, with 17,83,418 active companies.
Introduction of C-PACE
- C-PACE was launched to promote the ‘Ease of Doing Business’ by reducing the need for physical interactions during the corporate exit process. It was designed to expedite the voluntary winding up of companies to under six months through re-engineering of processes.
Corporate Exit Under Section 248(2) of the Companies Act
- In FY24, 13,560 companies were struck off under Section 248(2) of the Companies Act, 2013 through the C-PACE initiative.
C-PACE Now Includes LLPs
- In August 2024, the Ministry of Corporate Affairs (MCA) authorized C-PACE to process the eForms related to striking off Limited Liability Partnerships (LLPs).
- By November 15, 2024, 3,264 LLPs had been struck off under Section 75 of the Limited Liability Partnership Act, 2008.
Striking Off Due to Non-Compliance
- Between FY20 to FY24, the MCA struck off 2,33,566 companies for various defaults, including failure to commence business within a year of incorporation and not obtaining dormant status.
Prosecutions Against Defaulting Companies
- The Registrar of Companies has filed 322 prosecutions against companies that failed to file their Annual Returns or Financial Statements over the past five years.
Multiple-Choice Questions (MCQs):
- How many companies were struck off under C-PACE as of November 15, 2024?
- a) 10,000
- b) 11,855
- c) 15,000
- d) 12,500
- Answer: b) 11,855
- What is the average processing time for company strike-offs under C-PACE in FY25?
- a) 100-120 days
- b) 70-90 days
- c) 60-80 days
- d) 150-180 days
- Answer: b) 70-90 days
- How many companies were struck off under Section 248(2) of the Companies Act, 2013 in FY24?
- a) 12,000
- b) 13,560
- c) 15,000
- d) 10,000
- Answer: b) 13,560
- How many Limited Liability Partnerships (LLPs) were struck off by November 15, 2024, under Section 75 of the LLP Act?
- a) 3,000
- b) 3,264
- c) 4,000
- d) 2,500
- Answer: b) 3,264
- In which financial years were 2,33,566 companies struck off due to non-compliance?
- a) FY19 to FY23
- b) FY20 to FY24
- c) FY21 to FY25
- d) FY18 to FY22
- Answer: b) FY20 to FY24
- How many prosecutions were filed by the Registrar of Companies against defaulting companies in the last five years?
- a) 250
- b) 322
- c) 400
- d) 500
- Answer: b) 322