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Company Law Settlement Scheme, 2010

Easy Exit Scheme,  2010

 

 

Is the Ministry of Corporate Affairs concerned about

  • “defaulting company” means a company registered under the Companies Act, 1956 and a foreign company falling under section 591 of the Act, which has made a default in filing of documents on the due date(s) specified under the Companies Act, 1956 and rules made there under;  and
  • “defunct company” means inactive company existing in the Registers of ROC ?

 

It is felt by the Ministry so, then  it came out on 25.05.2010 with panacea in

  • the scheme called “‘Company Law Settlement Scheme 2010″ for the defaulting companies and
  • the scheme called  ‘Easy Exit Scheme- 2010’  for the defunct companies.

  

Both the schemes will be in operation from 30 May 2010 to 31 August 2010.

 

The observations of Ministry of Corporate Affairs on “defaulting companies” are :

  • that a large number of companies are not filing their due documents timely with the Registrar of Companies and also
  • there are many companies, who have not increased their paid up capital up to the threshold limit provided in sub-section (3) and sub-section (4) of Section 3 of the Companies Act, 1956.

 

And the very Ministry came out with following observations on “defunct companies” as follows:

  • It is stunning to note that the total number of defunct companies are 23185.
  • The anxiety of the Ministry is clear when it said that the steps ( it has taken to implement the scheme ) include conducting seminars and workshops involving all stakeholders, to sensitize the scheme and advertisements in newspapers, banners, etc. All facilities have been provided to receive the applications and process the same electronically and also
  • ‘Easy Exit Scheme- 2010’ has a simplified procedure to enable defunct companies to exit from the Register of Companies. 

 

Now, what image does the Ministry of Corporate Affairs want to project by these steps?  

 

What does it want to derive from identifying the default companies and defunct companies, ignoring conveniently the functionalism of Registrar of Companies?    

 

Is the ROC not empowered to act periodically and take action, proactively?    

 

Has the approach of ROC to Defunct Companies or Default Companies ever been encouraging to become them compliant or exit from the Register of Companies?

 

Why has the ROC been silent for quite a long period, till the number of defunct companies reach to this staggering figure?    

 

Hope, let not the ROC be inactive anymore.

 

It is hilarious to read following conclusion of the Ministry:

 

Action Post Closure of Scheme:

At the conclusion or the Scheme, the Registrar shall take necessary action under the Companies Act, 1956 against the companies who have not availed this Scheme and are in default in filing of documents in a timely manner.

 

Is the Registrar of Companies not empowered, prior to this to take action under the Companies Act, 1956 against the companies both Defunct and Default?

 

Due to various economic reasons, may be valid from the situations undergoing by the concerned default companies or  defunct companies, there might be lapses in observing the rules and provisions of the Companies Act, 1956.   Let us not think that there was no effort from these companies to get regularized and be compliant.

 

It is unfortunate that the Ground reality is very harsh to digest how rigmarole are our procedures in the case of  the default companies to  become  compliant by filing of documents on the due date(s) specified under the Companies Act, 1956 and rules made there under and even to exit from the Registrar of  the ROC.

   

 

Helpless are our professionals in voicing the same on concerned forums, in turn causing irreparable loss to our economic wealth.

 

Let the Ministry ignore the time limit, proposed for these Both schemes that the same will be in operation from 30 May 2010 to 31 August 2010 and put the sincere efforts at every ROC.

 

From

Venkateswara Rao Sapare, Hyderabad – 500 008, 31.07.2010.

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Category Corporate Law, Other Articles by - Venkateswara Rao Sapare 



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