The government said it has identified chartered accountants, company secretaries and cost accountants linked with some shell companies -- firms that exist only in paper and have no real business.
Continuing its effort to curb black money, the government said more shell companies will be identified and the "actual beneficiaries and persons" behind these organisations will be arrested.
The Corporate Affairs Ministry has struck off the names of over 2.09 lakh companies from the records as they have not been carrying out business activities for a long time. The authorities have told banks to freeze their accounts.
The government said if the fraud involves public interest, the punishment would not be less than three years imprisonment.
During a review meeting chaired by Minister of State for Corporate Affairs PP Chaudhary in New Delhi today, it was also decided that directors of shell firms would be barred from being reappointed in any of the companies where they had been directors, "thereby compelling them to vacate office".
"It is expected that as a result of this exercise, at least two to three lakh of such disqualified directors shall get debarred," the statement said.
Weeding out shell companies will help clean up India's business environment, Mr Chaudhary said.