Applicability of EES, 2010.

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Guest (Querist)

05 June 2010 Dear Experts,

Please see the following query and do the needful :

ABC Ltd. was incorporated on 05.01.2009.

The company is fully inoperative till date.

In fact, the company did not even collected the Certificate for Commencement of Business.

But, after the letter of RoC only, the company filed the necessary form and collected the Certificate for Commencement of Business.

TILL DATE, THERE IS NO BUSINESS AND THE COMPANY IS FULLY INOPERATIVE.

Query : Whether the said company shall come under EES, 2010, as somewhere I noticed the expression that

'Only eligibility criteria is “being inoperative” or “not carrying on any business” for atleast two years'.

My doubt is with regard to 'two years'.

The said company is just 18 months old.

Experts may express their views on the applicability of EES, 2010 for the above said company.

I shall wait for your views.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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05 June 2010 Sir
Clause (ii)(c) of MCA general cirular 2/2010 dated May 26,2010 says as follows:-
“defunct company” means a company registered under the Companies Act, 1956 which is not carrying over any business activity or operation on or after the 1st April, 2008 and includes a company which has not raised its paid up capital as provided in sub sections (3) and (4) of section 3 of the Companies Act, 1956;

What I understood from the above is, company should be registered under co's Act 1956 and it should not have carried on business on or after 1/4/2008.

Here,in the cited issue, the company is registered and after 1/4/2008 (ie., from 5/1/2009) inoperative. Accordingly the company can choose EES,2010.

If the intention of the legislature was EES,2010 is for company's aged more than 2 years, the definition of defunct company would have been drafted as follows:-
“defunct company” means a company registered ON OR BEFORE IST APRIL 2008 UNDER THE COMPANIES ACT,1956 AND which is not carrying over any business activity or operation and includes a company which has not raised its paid up capital as provided in sub sections (3) and (4) of section 3 of the Companies Act, 1956.
Conclusion:- I believe that the company is eligible for EES,2010.