Ministry of Corporate Affairs (MCA), Government of India had launched “Easy Exit Scheme, 2011” (EES 2011) under the Companies Act, 1956 (the Act) to provide a fast track exit for “defunct companies” to get their names struck off from the records of the Register of Companies (ROC). EES 2011 was operative for a limited period of 1 month i.e. from 1 January 2011 till 31 January 2011.

MCA has now extended the operative period of EES 2011 for another 3 months. Accordingly EES 2011 will now be available upto 30 April 2011.

Salient features of the EES 2011 are as under:

Operative period of EES 2011

Upto 30 April 2011

Companies eligible to avail EES 2011

A “defunct company” which has active status (for e-filing) on MCA portal can apply under EES 2011. For the purposes of the EES 2011, “defunct company” has been defined to mean a company registered under the Act which is not carrying over any business activity or operation on or after 1 April 2008 and includes a private company or a public company existing on 13 December 2000 which has not increased its paid up capital to Rs. 100,000 or Rs. 500,000 respectively, being the minimum paid up capital prescribed under the Act.

Brief procedure for availing EES 2011

•           Companies desirous of taking benefit of EES 2011 need to make an application to ROC in the prescribed Form EES 2011 along with filing fee of Rs. 3,000.

•           Following documents / information is to be provided along with the application:

–          Affidavit to the effect that the company has not carried on any business since incorporation (or) that the company did some business for a period upto a certain date and then discontinued its operations and has not carried on any business after the 1 April 2008;

–          Indemnity bond from all directors that losses, claim and liabilities on the company will be met in full by them director (individual y or collectively) even after company’s name is struck off by ROC ;

–          Statement of Account not older than 1 month preceding the date of filing application duly certified by a statutory auditor or practicing Chartered Accountant;

–          Disclosure of pending litigation, if any;

–          In case of Government Company, copy of no objection certificate from concerned administrative ministry / department / state government.

Procedure to be adopted by ROC on receipt of application

•           If the application is in order, the ROC will give a notice to the applicant company through e-mail to show cause within 30 days for not striking off the name of the company.

•           ROC shall put the name of the applicant and date of making application under the EES 2011 on daily basis on giving 30 days’ time to stakeholders for raising objections, if any.

•           Where a company is regulated by another regulator like RBI in case of Non-Banking Financial Company or SEBI in case of Collective Investment Management Company, the ROC shall send intimation of such companies availing EES 2011 to the concerned regulator on a weekly basis, giving 30 days time for their objection, if any.

•           ROC shall also intimate details of all companies that have applied under EES 2011 to Income tax Department giving 30 days’ time for their objection, if any.

•           ROC after passing of the time given to the other regulators, if any and to the Income Tax Department and on being satisfied that the case is otherwise in order, shall strike its name off the Register.

•           ROC shall send notice specified in Section 560 of the Act for publication in the Official Gazette and on such publication of the notice, the applicant company shall stand dissolved.

Companies ineligible under EES 2011

Following companies are not eligible to apply under EES 2011:

•           Listed companies

•           Companies that have been de-listed

•           Section 25 Companies i.e. companies which are formed pursuant to a license and which cannot pay any dividend to its members

•           Vanishing companies i.e. a listed company which has failed to file its returns with ROC and Stock Exchange for a consecutive period of 2 years, and is not maintaining its registered office at the address notified with ROC or Stock Exchange and none of its Directors are traceable

•           Companies –

–          where inspection or investigation is in process against which order under Section 234 of the Act has been issued by ROC and reply is pending or where prosecution if any, is pending in a court

–          against which prosecution for a non-compoundable offence is pending in a court

•           Companies which have accepted public deposits which are either outstanding or the company is in default in its repayment

•           Company having secured loan

•           Company having management dispute

•           Company in respect of which filing of documents have been stayed by court or Company Law Board or Central Government or any other competent authority

•           Company having dues towards income tax, sales tax, central excise or banks / financial institutions or central or state government departments or authorities or local authorities.


The EES 2011 will provide one more opportunity to “defunct companies” for an easy exit wthout following the lengthy winding-up process.

Considering very short time span available for making the application under EES 2011, the eligible companies should take preparatory steps in advance such as drawing up of statement of account etc.

Source: General Circular No. 6 /2010 dated 3 December 2010 and General Circular No. 1 /2011 dated 3 February 2011 issued by MCA.

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