Did Over 37,000 Companies Really Choose Voluntary Strike-Off in Two Years?
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Synopsis
Explore the significant trend of company closures in India as over 37,000 companies voluntarily removed themselves from official records in just two years. What does this mean for the corporate landscape? Discover insights and implications behind these numbers.
Key Takeaways
- 37,212 companies opted for voluntary strike-off from 2023 to 2025.
- Companies must settle all liabilities before applying for strike-off.
- Section 248(2) facilitates a smoother exit process for non-operational firms.
- The last government-led strike-off drive occurred in 2022-23.
- Voluntary closures differ significantly from involuntary ones.
New Delhi, July 29 (NationPress) Between May 1, 2023, and June 30, 2025, a total of 37,212 companies voluntarily opted to remove their names from the official register under Section 248(2) of the Companies Act, 2013, as reported to Parliament on Tuesday.
According to Harsh Malhotra, the Minister of State for Corporate Affairs, in a written reply during a Rajya Sabha session, "During the period from 01.05.2023 to 30.06.2025, a total of 37,212 companies have availed the exit process under Section 248(2) of the Companies Act, 2013."
These companies opted to exit the registry after settling all their liabilities, following the legal procedures outlined by the law, the minister explained.
Section 248(2) enables companies to apply for a strike-off if they have ceased operations and have cleared all outstanding dues.
In response to inquiries, the minister noted that while a previous government-led strike-off initiative under Section 248(1) occurred during 2022-23, no such mass action is currently taking place.
"Under Section 248(1), the Registrar of Companies has the authority to strike off companies that have not engaged in business or operations for two consecutive financial years and have not filed for dormant status, or where subscribers failed to pay the promised share capital within 180 days of incorporation," he stated.
A voluntary strike-off occurs when a company independently decides to dissolve, with shareholder approval, after ensuring all debts and dues are settled.
The company then submits a request to remove its name from the official companies register, signifying its cessation.
This process differs from an involuntary strike-off, where the Registrar of Companies (ROC) initiates closure due to non-compliance or inactivity.
Point of View
It is evident that the significant number of voluntary strike-offs highlights both challenges and opportunities within the corporate sector. It reflects a conscious decision by companies to exit responsibly, ensuring all liabilities are managed. This trend could indicate a critical shift in business strategies, warranting further examination.
NationPress
19/08/2025
Frequently Asked Questions
What is a voluntary strike-off?
A voluntary strike-off is when a company chooses to close down with the consent of its shareholders after settling all its debts and liabilities.
What is Section 248(2) of the Companies Act, 2013?
Section 248(2) allows companies to apply for a strike-off if they are no longer conducting business and have cleared all their dues.
What distinguishes voluntary and involuntary strike-offs?
Voluntary strike-offs occur at the company's request, while involuntary strike-offs are initiated by the Registrar of Companies due to non-compliance or inactivity.
How many companies opted for voluntary strike-off recently?
Between May 1, 2023, and June 30, 2025, a total of 37,212 companies opted for voluntary strike-off.
Is there an ongoing mass strike-off drive?
No, the last government-led strike-off drive under Section 248(1) occurred in 2022-23, and no similar initiative is currently active.
