After making Aadhaar mandatory for Permanent Account Number (PAN) and social schemes, the government will soon make it a mandatory document for businesses and non-governmental organisations (NGO).
The Ministry of Corporate Affairs (MCA) has proposed amendments to the Income Tax Act and Prevention of Money Laundering Act for the same, a report in the Times of India said.
As per the report, Aadhaar of top management personnel will be needed at the time of registration of companies and partnership entities. This will make directors and promoters easily traceable and make it difficult to form shell companies.
PAN is already mandatory while registering the company. Making Aadhaar mandatory will bring partnerships and trusts under the same regulations, which is not the case currently, the report said.
The aim is to curb black money and the government is looking for a mechanism to get entities with cumulative transactions of over Rs 2 lakh annually under a regulatory regime.
These amendments will help check possibility of any misuse in the system, the report said.
Till now, the PAN was treated as the unique identification number for all the businesses.
In its battle against the shell companies, the government recently banned nearly 2 lakh defunct companies and also identified 106,578 directors of shell companies to be disqualified.