Skip to main content

Define'shell companies' in companies act, panel asks govt

Define'shell companies' in companies act, panel asks govt
At present, the term 'shell company' is not defined under the Companies Act, which is implemented by the corporate affairs ministry
A Parliamentary panel has asked the government to define "shell company" in the Companies Act and ensure distinction between those guilty of fraud and those irregular with filings.
The recommendation assumes significance at a time when the government is cracking down on companies that have not been carrying out business activities for long as well as those entities being allegedly used for illicit fund flows.As part of larger efforts to curb the black money menace, the corporate affairs ministry has already struck off the names of more than 226,000 companies from the official records besides disqualifying a large number of directors associated with such entities.
The Parliamentary Standing Committee on Finance, headed by senior Congress leader and former Corporate Affairs Minister M Veerappa Moily, has said that out of the 226,000 deregistered companies some may have been merely dormant ones without any fraudulent intent.
"Therefore, it is necessary that while cracking down on shell companies, the ministry needs to make distinction between those guilty of fraud and those irregular with filings," the panel said in a report tabled in Parliament on March 9.At present, the term 'shell company' is not defined under the Companies Act, which is implemented by the corporate affairs ministry.
"To avoid any legal ambiguity and pre-empt avoidable litigation in the absence of a clear cut definition of 'shell companies' may be suitably included in the Act itself by bringing in the element of 'fraudulent' intent," the committee said.According to the report, the ministry has decided to attempt a commonly accepted definition and attributes of shell companies.Amid instances of corporate frauds, the panel has also called for "real time data sharing" among the ministry and other agencies.
"To prevent corporate misfeasance/ malfeasance, there should be real time data-sharing amongst Ministry of Corporate Affairs and other regulatory enforcement agencies such as CBI, ED, DRI, CBDT, SFIO, Department of Financial Services, Financial Intelligence Unit, Central Economic Intelligence Bureau and Sebi," it said. In this regard, the committee has said that it may be apprised of the progress made within three months.
The Business Standard, New Delhi, 12th March 2018


Popular posts from this blog

At 18%, GST Rate to be Less Taxing for Most Goods

About 70% of all goods and some consumer durables likely to cost less

A number of goods such as cosmetics, shaving creams, shampoo, toothpaste, soap, plastics, paints and some consumer durables could become cheaper under the proposed goods and services tax (GST) regime as most items are likely to be subject to the rate of 18% rather than the higher one of 28%.

India is likely to rely on the effective tax rate currently applicable on a commodity to get a fix on the GST slab, said a government official, allowing most goods to make it to the lower bracket.

For instance, if an item comes within the 12% excise slab but the effective tax is 8% due to abatement, then the latter will be considered for GST fitment.

Going by this formulation, about 70% of all goods could fall in the 18% bracket.

The GST Council has finalised a four-tier tax structure of 5%, 12%, 18% and 28% but has left room for the highest slab to be pegged at 40%. A committee of officials will work out the fitment and the council…

Deposit gush:-CA Institute Bats for Special Audit

Obligation for the Month of April

Event DateActApplicable FormObligation07/04/2017Income TaxForm No.27C (TCS)Submission of Forms received in Mar  to IT Commissioner10/04/2017ExciseER-1Excise Return ER-1 for Non SSI assessees for Mar10/04/2017ExciseER-2Excise Return ER-2 for EOUs for Mar10/04/2017ExciseER-3Submission of Excise Return ER-3 by SSI units for Mar quarter10/04/2017ExciseER-6Excise Return ER-6 by units paying duty >  1 crore (CENVAT + PLA) for Mar12/04/2017D-VATBE - 2Advance information for 2nd fortnight of APR of functions with booking cost > Rs 1 lakh in Banquet Halls,hotels etc. in Delhi15/04/2017Income TaxForm 15CCStatement by Banks etc. in respect of foreign remittances during the quarter15/04/2017D-VATDVAT-20Payment of DVAT TDS for Mar15/04/2017Providend FundElectronic Challan cum Return (ECR)E-Payment of PF for Mar21/04/2017ESIESI ChallanPayment of ESI of Mar (Applicable for Salary upto Rs. 21,000 instead of 15,000 earlier)21/04/2017M-VATMVAT ChallanPayment of MVAT & WCT TDS for Mar21/04/201…