More than 17,200 new companies were set up in the country during April to June this year while a total of 13.7 lakh companies were active at the end of June, according to official data. Minister of State for Corporate Affairs Rao Inderjit Singh told the Lok Sabha on Monday that 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.
"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," Singh, who took charge as the MoS at the ministry earlier this month, said in a written reply.
There was an increase of 17,223 new companies compared to the year-ago period.
The minister's reply was to a query on whether the second wave of coronavirus pandemic has adversely impacted the economic conditions of the companies in the country.
Amid the pandemic, the ministry has also taken various steps, including allowing firms to conduct their annual general meetings through video conferencing or other audio-visual means.
As per data with the ministry, there were a total of 21,87,026 registered companies till June 30 this year.
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.
"There is no verifiable information which says that the closure of company is due to lack of business acumen," the minister said in another written reply. He was responding to a query on whether want of business acumen is also a reason for closure of companies.
According to a separate written reply, 80,270 independent directors were appointed by companies in the last three financial years.
"Appointment of independent directors is a continuous process. Whenever, the posts of the independent directors fall vacant the respective companies are required to comply with the provisions of Companies Act, 2013," Singh said.
In another written reply, the minister said 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".
He was responding to a question about the measures likely to be taken by the government to address the apprehension in some quarters of corporate world that this arrangement would weaken the position of promoters.
Under Regulation 17(1B) of Sebi (Listing Obligations and Disclosure Requirements), Regulations, 2015, the top 500 listed entities by market capitalisation are required to comply with the requirement of separation of the roles of chairperson of the board and MD/ CEO with effect from April 1, 2022.
The regulation will be applicable to 486 listed companies on BSE and 487 on NSE, as per the reply. However, specific details were not disclosed.
Copyright©2022 Living Media India Limited. For reprint rights: Syndications Today