Over 2 lakh company directors cannot hold board position in new ventures

More than 2 lakh directors on the board of companies whose names were struck off by the Registrar of Companies (RoC) will not be able to hold any board position in new ventures, but can continue to serve on the board of other companies where they are directors at present, according to a Times of India report.

"There is no intention to create problems in other companies. So we are for the moment staying away from acting against the boards of other companies," a source told ToI.

The RoC is an office under the Ministry of Corporate Affairs, and mainly looks after company registration in India: It completes reporting and regulation of companies, their directors and shareholders.

The names of 2.1 lakh companies have been struck off by the government office after about 2.97 lakh companies received notice for not filing returns and not completing other formalities related to compliance.

This number is expected to surge in the coming months, and the crackdown against these directors will commence in a few days. RoC's decision to remove the names of the companies will also help pinpoint shell companies that exist only on papers and are often used for money laundering.

The Reserve Bank of India and the Indian Banks' Association had received the list of names of companies RoC had scrapped in order to stop the flow of funds.