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May 30, 2010

Easy exit route for defunct unlisted cos

The Below shown information is the cutting article from Times of India Which sounds more important for the Unlisted companies.

Kindly go thru it and see the facts. The Original words of Times Paper has been Presented here.

NEW DELHI: The government on Friday introduced a scheme that would facilitate easy exit for unlisted companies willing to wind up their defunct businesses. A defunct company is one whose business is lying in a dormant state.

The new scheme will give such companies an opportunity to get their names struck off from the rolls of Registrar of Companies (RoC). The scheme, however, does not apply to listed entities, organisations formed not for profit, vanishing companies or firms facing investigation or prosecution.

According to the new scheme, which has been made open from May 30 to August 31 this year, any defunct company willing to get its name struck off from RoC will make an application without fee in a form electronically to the ministry’s portal. The application will have to be submitted along with a statement of accounts among others, it said.

“It will be an incentive for companies that want an easy exit. If they file it between the period, they will not have to go through strenuous procedure, fill forms, will not have to give explanations,” minister for corporate affairs Salman Khurshid said.

As per the existing policy, companies require to give various details and get no-objection certificates from different authorities and regulators for winding up their businesses. The process is lengthy and consumes a lot of time before name of a dormant business gets deleted from the rolls of the RoC. According to available data, over 10% of the seven lakh registered companies in India are defunct. This means that the scheme opens up a gateway for around 70,000 defunct firms to formally close down their business.