The Government has said that steps have been taken to enumerate or identify such registered companies which are inactive, dormant and have been in such mode for at least last ten years. Stating this in written reply to a question in the Rajya Sabha, Shri Salman Khurshid, Minister of Corporate Affairs, said that many promoters want to de-register these inactive companies to save themselves from perennial troubles.

Shri Khurshid informed the House that in this context the Central Government has announced ‘Easy Exit Scheme- 2010’, with a simplified procedure to enable defunct companies to exit from the Register of Companies. The scheme is in operation from 30.5.2010 to 31.8.2010.

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  1. murali says:

    unless effective
    steps are taken from day one
    there will be no end to this
    scam. what is the position
    of satyam as of date nothing
    has been done to catch the culprits
    who continue to cool their heels
    because of their money n muscle
    power.what is illegal has become
    with stamp of legality
    CA R. MURALI coimbatore

  2. CA B B SHETTY says:

    Yes, in our country white colour crime is more as they get away by sharing crime with law enforcing agencies who are corrupt and dishonest and mostly influenced by dirty politicians. Such company details including Auditor name should be published in Newspaper then only compnay should be derigistered

  3. Nisban says:

    July 31st, 2010 at 6:08 am
    I think Tira. T means Baksara village in Howrah dt. of West Bengal which in the 50s to the 80s was a very notorious place (no less today too) for name lenders’ addresses-all bogus. In fact, names and addresses of hundreds of companies of this place with and without registration were being used to introduce cash credits in the books of millionaires of those days on their way to become billionaires-all bogus. 99% of these entities never existed-those who did, sprouted with the connivance of ROCs. The Minister may, just for his enlightenment, enquire into these as a test case.
    The suggestions given by Tira.T are not very off the tangent, so to say, though the IAS mandarins of the Ministry and the totally unprofessional, ill-equipped and ill-trained RoCs and their corrupt officials will NEVER allow even a few of such suggestions to be considered. Incorporating defunct companies for purposes of siphoning off funds has been a very old practice. Many share broking firms, with the connivance of and at the instance of very bif groups, just get various companies incorporated (to be kept readily available for nefarious activities) and even file bogus annual returns for the sake of formality. These companies are later hived off, whenever strategically required by the huge companies for their use. For decades, such “companies”, showing marginal bogus incomes in their bogus income tax returns and paying some token tax, maintaining some current account with pliable banks with the connivance of pliable and corrupt bank managers, are being used for “hawala” business (also known as name lending business in tax parlance) and cerytainly for money laundering-a subject in which the SFIO civilians are a total novice. This is known to the income tax people for ages, but the relative subordinate status of CBDT and IT officials vis-a-vis the IAS, IPS, IA&AS, CSS, DRI, SFIO, RBI, CBI, CVC, IB, and such high profile outfits, coupled with the built-in corruption of and “cheaper rates” of the CBDT and IT officials have been the cause for the govt’s refusal to take any notice of whatever serious investigation has been made over the past by the IT people. The problem is the lower ranking of these officers as compared to the rank of those in the above mentioned services/departments, Even today CBDT chairman is lowe in rank than the DGP of a state or CBI director or the DRI head or even the IGP of a distt or ST commissioner. And the chief income tax commissioners are lower than the police SHOs. So the result is that the only department which is privy to the real mystery of such vanishing companies through their now-destroyed system of once solid investigation prowess is deliberately, systematically and strategically ignored. As a consequence, the results of the investigation made by the IT people never get published or known. And, like all such in-breeding societies, the assessment orders or appellate orders made by some officers of IT deptt are “traded” (albeit very cheaply) by their own bosses or, if that is not possible (in the event of a rare case of a very honest superior), at a much higher rate by the ITAT. There is simply no way of these results of serious and difficult investigations (for want of 3rd degree powers or powers of arrest uner IT ACT unlike police, CBI, DRI, Customs, etc.) ever being put up to those few well-meaning bureaucrats of levels higher in rank than the petty CBDT chairman/members, etc-what to talk of FM, or any minister or CBI/DRI/IB/RAW dirctor. This is not unintentional-all this is essentially built in the system with the ulterior motive of reaping benefits-politically and bureaucratically.

    What I mean is that the so-called “inactive” companies are not really as innocent as they are meant to appear. There is a very deep and menacing mystery behind these entities. The govt should be extra careful and beware in this area instead if being just naive to simply start striking off their names without making serious inquiries into the antecedents of the people who floted the companies and then decided to go underground. In fact, there should be launched serious manhunts. And wide publicity in newspapers-national, state, district, tehsil, small, medium newspapers, magazines, etc. There may be serious threat to the country otherwise.

  4. CA. Ashok Aggarwal says:

    Why ROCs not resorting to sec 560 of Companies Act and issuing notices to such companies for deletion from Register maintained by respective ROCs?

    May be expecting some money!

  5. Tira.T says:

    What will happen to the bogus cash credits introduced in the names of non-existing/bogus/fly-by-night companies in the income tax cases for decades? What action will be taken against the CAs/ITPs/Advocates/Taxpayers who have been indulging in this widespread practice for decades (many of them having become too powerful, respectable and even advisors to the govt., bank directors, recoipients of national/govt honour)? The govt should invite opinion from those who have handled such cases. West Bengal (even villages like Bak Shara in Hora were shown as regd offices of many such companies!), MP, Rajasthan, Gujarat (villages), and villages and small towns of in the whole country used to be shown as the addresses of companies and ROCs never furnished info as they were and are involved. Deregistration will not kill the menace of this-their names must be widely advertised for all public/authorities’ knowledge and their directors’ names too published and declared as criminals. Their auditors also must be held responsible. From now, every company’s application for registration must be compulsorily filed with (1) PAN of every promoter/director/initial shareholders, (2) full details of their bank accounts, (3) their photographs and fingerprints and (4) a sworn affidavit containing the full list of all their family members with addresses and all their assets-movables and immovables alike. They must also be compelled to furnish names of two identified guarantors (with their respective PAN and Bank a/c Nos.). Criminals must be treated as criminals only. And further there must be a inter-departmental nodal committee (or a committee of retired officers with integrity requisite experience) to advise the govt on this prosperous business which is responsible for money laundering too.

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