Govt introduces 2 schemes to ease defunct companies' exit

CHENNAI: Ministry of Corporate Affairs ( MCA) expects corporates to benefit from the two schemes it has introduced — Company Law Settlement Scheme 2010 and Easy Exit Scheme 2010. The ‘Easy Exit’ scheme is to help defunct companies to get their names struck off from the Registrar of Companies (RoC). Such a process will assist companies in not pursuing the high-cost, time-consuming voluntarily winding-up route. This procedure was introduced in 2000, which was later simplified in 2003 and 2005.

Now, the ministry has again introduced the scheme operative from May 30 to August 31 by scrapping off the fees payable by any defunct company desirous of getting its name struck off the register, MCA regional director (south) BK Bansal told reporters here. Against the production of an affidavit, an indemnity bond and a statement of accounts duly certified by a chartered account, the name can be struck off, he said, adding the implementation of the scheme is aimed at removing the need to legally prosecute such defunct companies.

As on June 30, 2010, the total number of registered companies was 70,998, of which 54,402 were active. There are 13,811 companies that are already in the process of striking off under Section 560 of the Act. The ministry expects 25,000 firms to avail the exit route scheme, Mr Bansal said, adding South had 2.04 lakh such companies. The national figure is 8.10 lakh, out of which around 55% belong to the active category. Likewise, the Company Law Settlement scheme is meant to make firms regular with their compliance in filing the documents and returns with the regulators. This provides an opportunity to the defaulting firms to file their delayed documents by paying an additional fee of 25% of the actual additional fee as per Companies Act 1956, Mr Bansal said. The filing fee is a nominal Rs 500, but delayed submission would mean the company would have to pay Rs 4,500 more.

Companies that have not filed their accounts over the past two or three years are around 17,278 in Tamil Nadu. After the introduction of the scheme, the ministry has been able to collect Rs 2.83 crore from 3,488 companies. In the south, Rs 9.17 crore was collected from 12,442 companies.