With more than 26,000 companies vanishing from the radar of the Registrar of Companies (RoC) in Andhra Pradesh, the ministry of company affairs (MCA) has come up with a scheme to help defunct companies complete formalities for a proper closure.
The `Easy Exit Scheme – 2010‘ gives companies such an opportunity but officials of the RoC are now finding that there are few takers for it. The scheme became operational on May 30, 2010 and is to end on August 31, 2010.
Interestingly, Andhra Pradesh with 26,414 has the third largest number of defunct companies in the country after Maharashtra’s 48,419 followed by Delhi’s 39,831. Following the state are Tamil Nadu’s 24,110 and Gujarat’s 15,942.
“It is quite strange that so far only 50 defunct companies completed the procedures,” an official source said. Senior RoC officials had even gone to Vijayawada and Visakhapatnam in a bid to popularise the scheme. In the last 10 years or so, several companies that were incorporated under the Companies Act failed to file the balance sheet and annual returns as required by law.
Officials of the RoC also sent reminders to some of the companies to comply with the rules. “The companies have literally vanished into thin air as the letters are being returned. The companies do not exist at the addresses given in our records,” an official said.
The problem for the RoC is that if they are unable to trace the defunct companies, it cannot prosecute them as per the Companies Act provisions.
While the punishment could range from a cash penalty to a jail term, that hardly is making directors of the defunct companies to make use of the `Easy Exit Scheme – 2010.’
According to some observers, the defunct and inactive companies seem to have their owns fears as winding up a company on record might land them in more problems if they are traced. An official, however, pointed out that if directors of the defunct companies were to be prosecuted, they would never be able to float a company again.
“We expect more defunct companies to respond to the scheme by the time it expires at the end of the month,” a senior official in the RoC told TOI. It remains to be seen how many will actually come forward.
I want to know that how the gratuity implement in a company what the procedure and how to inform & formalities related to epf department
I want to know that how it implement in a company what the procedure and how to inform & formalities related to epf department
The Basic fear in the minds of the Directors of the defunct Companies is that after complying with the provisions of the “Easy Exit Scheme, 2010” they will be prosecuted for non-filing of the returns with ROC and such other annual compaliances which are strictly to be adhered under the provisions of the Companies Act, 1956.
If the MCA can assure the Directors of such companies that they won’t be prosecuted if they make there default good as instructed in the “Easy Exit Scheme, 2010” then there are some chances that more and more such companies shall participate and gets there name stricked off from the register of the RoC.