Govt gives defunct firms an exit route | india | Hindustan Times
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Govt gives defunct firms an exit route

india Updated: Jul 08, 2010 22:52 IST
HT Correspondent
HT Correspondent
Hindustan Times

Defunct companies have a window of opportunity to get their names struck off the Register of Companies.

The Ministry of Corporate Affairs on Thursday announced the “Easy Exit Scheme, 2010” for such companies.

The scheme, valid till August 31, does not however cover listed companies, section 25 companies, vanishing companies and companies under inspection/investigation.

A defunct company is one that is registered under the Companies Act 1956 but is not carrying any business activity on or after April 1, 2008.

“These companies may be defunct and are desirous of getting their names struck off from the RoC,” the note sent to the RoC by the ministry said.

Many companies that have not increased their paid up capital up to the threshold limit also come under the defunct companies category.

Also, several companies, failing to file their documents with the RoC on time, are burdened with additional fee and even face prosecution.

The ministry has given such companies an opportunity to become compliant with the legal requirements, in the form of the “Company Law Settlement Scheme, 2010” — under which they can file belated documents.

It condones belated filing of documents and grants immunity from prosecution on payment of an additional fee of 25 per cent over the actual fee payable for filing belated documents.