A big figure to India’s corporate sector Lok Sabha I have come forward. In the last five financial years, closure of more than 2,00,000 private companies (Indian Companies Shutdown Data) has been confirmed. According to the government, these companies either got involved in processes like merger-conversion, or closed down automatically due to being non-dynamic for a long time. In some cases the companies themselves expressed their desire not to continue in business and sought permission to withdraw from the registry.

A total of 2,04,268 private companies were struck down in the last five years under the provisions of the Companies Act, 2013, out of which a large number were inactive firms that were removed during the strike-off drive conducted by the ministry, a written reply by Minister of State for Corporate Affairs Harsh Malhotra said.

How many companies were closed in which year?

According to the data presented in the Lok Sabha, the situation for the last five years is as follows –

2020-21: 15,216 companies closed

2021-22: 64,054 companies closed

2022-23: 83,452 companies closed (highest)

2023-24: 21,181 companies closed

2024-25: 20,365 companies closed

In this way, a total of 2,04,268 private companies were locked between 2020-21 and 2024-25.

Biggest strike-off drive

More than 82,000 companies were found non-viable in 2022-23 and were largely deregistered (Indian Companies Shutdown Data). A large part of the total companies that were closed this year were the result of this campaign.

Data of companies removed from records

The Corporate Ministry said that 1,85,350 companies have been removed from the official registration records in the 5 years starting 2021-22.

In the current financial year, 8,648 companies have been removed from the records till July 16, 2025.

A company may be removed from the registry when—

She may not be doing business for a long time,

Wish to voluntarily withdraw after completing regulatory compliance.

Were these shell companies?

The government clearly said that there is no definition of the term “shell company” in the Companies Act, 2013 (Indian Companies Shutdown Data). Therefore, a company cannot be called a shell merely because it has been removed from registration.

Was it a case to shell companies?

The government also clarified its position on the question of money laundering or shell company.

Minister Harsh Malhotra told-

The number of companies struck down from 2021-22 to July 2025, where there is no legal category of “shell company”, was the highest in 2022-23 due to the identification and strike-off process of inactive companies by the ministry.

What did the government say on the rehabilitation of employees?

It was also asked in the Lok Sabha whether there is any government scheme for the rehabilitation of employees of such a large number of closed companies? The minister’s reply was – “The government does not have any such proposal.”

This response has sparked widespread debate as it is believed to have a possible indirect impact on millions of employees, while the government is calling it an ‘independent corporate decision’ of the companies.