**Executive Summary**
This document summarizes answers provided in Lok Sabha Unstarred Question No. 229, answered on December 01, 2025, regarding shell companies identified under Section 248 of the Companies Act, 2013. The response addresses the definition of shell companies, actions taken against non-compliant firms, the status of probes into online lending apps, and data on shell companies in Ambedkar Nagar. No specific deadlines or dates are mentioned.
**Key Points / Main Content**
* **Definition of Shell Companies:**
* The term "Shell Companies" is not defined in the Companies Act, 2013.
* There is no proposal to introduce such a definition in the Companies Act, 2013.
* **Action Against Defaulting Companies:**
* Registrars of Companies take action against defaulting companies that fail to file Annual Returns and/or Financial Statements.
* Actions are taken under sections 92, 96, and 137, and section 248(1) of the Companies Act, 2013, read with the Companies (Removal of name of Companies from the Registrar of Companies) Rules, 2016.
* Action is taken against companies for diversion, siphoning of funds, or fraud when violations of the Companies Act are found.
* The Central Government orders Inquiries, Inspections, and Investigations under sections 206(4), 206(5), and 210 of the Companies Act, 2013.
* Suitable action, including striking off companies under section 248(1) of the Companies Act, 2013, is taken based on findings and monitored regularly.
* **Probe of Online Lending Apps:**
* Regulatory action for inquiry, inspection of books of accounts, and investigation under the Companies Act, 2013, is taken against companies involved in online lending activities through loan apps.
* Appropriate legal action is taken whenever any violation under the Companies Act, 2013 is found.
* The Ministry of Electronics and Information Technology (MeitY) blocks illegal loan lending applications under section 69A of the Information Technology Act 2000.
* MeitY has blocked a total of 87 illegal loan lending applications.
* **Shell Companies in Ambedkar Nagar:**
* As the term Shell Company has not been defined under the Companies Act, 2013, data on shell companies in Ambedkar Nagar is not maintained.
**Impact Analysis**
**Stakeholder: Registrars of Companies**
* **Impact:** Responsible for taking action against defaulting companies and ensuring compliance with the Companies Act, 2013.
* **Action Required:** Continue monitoring and taking action against companies failing to file returns or involved in illegal financial activities, according to the established procedures.
**Stakeholder: Central Government (via Ministry of Corporate Affairs)**
* **Impact:** Responsible for ordering inquiries, inspections, and investigations related to non-compliance.
* **Action Required:** Continue oversight and investigations based on complaints, references, and information regarding non-compliance, and take action based on the findings.
**Stakeholder: Ministry of Electronics and Information Technology (MeitY)**
* **Impact:** Empowered to block access to illegal loan lending applications.
* **Action Required:** Continue monitoring and blocking illegal loan lending applications under section 69A of the Information Technology Act 2000.
**Stakeholder: Companies involved in online lending**
* **Impact:** Regulatory action and potential legal consequences for companies involved in illegal online lending activities.
* **Action Required:** Ensure compliance with the Companies Act, 2013, and other applicable laws to avoid regulatory action.
**Stakeholder: Public using online lending applications**
* **Impact:** Greater protection from illegal loan lending applications
* **Action Required:** Not explicitly mentioned in the document.
Key Entities Referenced
Companies Act, 2013: Primary legislation under discussion, concerning shell companies and corporate governance.
Section 248 of the Companies Act, 2013: Specific section of the Companies Act related to identifying and taking action against shell companies.
Ministry of Corporate Affairs: Government ministry responsible for administering the Companies Act and addressing the issue of shell companies.
Information Technology Act 2000: Act under which illegal loan lending applications are blocked by MeitY.
Companies (Removal of name of Companies from the Registrar of Companies) Rules, 2016: Rules for taking action against companies by removing their name from Registrar of Companies.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
LOK SABHA
UNSTARRED QUESTION NO. 229
ANSWERED ON MONDAY, DECEMBER 01, 2025
AGRAHAYANA 10, 1947 (SAKA)
SHELL COMPANIES IDENTIFIED UNDER SECTION 248 OF THE
COMPANIES ACT, 2013
QUESTION
229. Shri Laliji Verma:
Will the Minister of CORPORATE AFFAIRS
be pleased to state:
(a) whether the Government proposes to introduce a formal
definition of shell companies under the Companies Act, 2013;
(b) the steps taken/being taken by the Government to strengthen
monitoring and compliance mechanisms to prevent illegal financial
activities of the non-functional firms;
(c) the current status of probe of online lending apps identified for
regulatory scrutiny along with the expected outcomes thereof; and
(d) the number of shell companies identified under Section 248 of
the Companies Act, 2013 in Ambedkar Nagar district along with the
details of the action taken against them?
ANSWER
THE MINISTER OF STATE IN THE MINISTRY OF CORPORATE AFAIRS
AND MINISTER OF STATE IN THE MINISTRY OF ROAD, TRANSPORT
AND HIGHWAYS
(SHRI HARSH MALHOTRA)
(a): The term “Shell Companies” has not been defined in the
Companies Act, 2013. There is no proposal to introduce such a
definition in the Companies Act, 2013.(b): The Registrars of Companies take action against defaulting
companies who fail to file their Annual Returns and/or Financial
Statements by taking action under sections 92, 96 and 137 of the
Companies Act, 2013 or by striking off the name of the companies
under section 248 (1) of the Companies Act read with the
Companies (Removal of name of Companies from the Registrar of
Companies) Rules, 2016. Action is also taken against companies for
diversion, siphoning of funds or fraud etc., as the case may be,
whenever contravention of the provisions of the Companies Act is
found.
Further, under section 206 (4), 206 (5) and 210 of the Companies
Act, 2013, the Central Government orders Inquiries, Inspections,
Investigations respectively on the basis of complaints, references
and information regarding non-compliances. Based on the findings
of the above, suitable action against non-compliant companies
including striking off of companies under section 248(1) of the
Companies Act, 2013 is done. This is monitored on a regular basis.
(c): Regulatory action for inquiry, inspection of books of accounts
and investigation under the Companies Act, 2013 is taken from time
to time against companies, including the ones indulged in online
lending activities through Loan Apps. Whenever any violation under
the Companies Act, 2013 is found on the basis of the above, an
appropriate legal action is taken.
Ministry of Electronics and Information Technology (MeitY) is
empowered to issue blocking directions to block the Information for
public access under section 69A of the Information Technology Act
2000. So far, after following the due process, MeitYhas blocked a
total of 87 illegal loan lending applications under section 69A of the
Information Technology Act 2000.
(d) :As the term Shell Company has not been defined under the
Companies Act, 2013, the desired information is not maintained.
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