Directors of shell companies which have not filed tax returns for three or more years will be barred from taking similar positions elsewhere or getting reappointed, the government said, as it intensified the crackdown on firms that exist only on paper.
The government has struck more than 2 lakh shell companies off the Register of Companies and put restrictions on their bank accounts as part of its clampdown on black money.
Directors of the companies that were struck off the RoC could face up to 10 years in jail if they were found siphoning off funds, the government said on Wednesday.
The government said it is compiling the profiles of the directors at such companies in collaboration with enforcement agencies and expects the move to cover 2-3 lakh people.
The decisions were made at a review meeting chaired by the minister of state for corporate affairs, PP Chaudhary, to strengthen the rules and procedures of corporate governance, it said.
The move “would not only help in checking the menace of black money but also would promote an ecosystem of ‘ease of doing business’ and enhancing investors’ confidence”, Chaudhary said.
Enforcement agencies are compiling profiles of directors, including their background, antecedents and role in the operations and functioning of these companies.
