When MCA had come out with a draft suggestion paper on requirement of companies to file their annual accounts before filing any event based filings, they had invited comments from stakeholders. I had made a suggestion that companies should have the facility of closing down if they are not doing any business and this should be available on the tap for all such companies. It seems MCA has accepted this suggestion and made available a scheme for easy exit of companies which are not doing any business for the last one year or which has not done any business since its incorporation/ inception and this is available on tap across any period without any closure time limit. Circular no. 36/2011 dated 7th June 2011 has been issued by MCA in this regard, which is available on the MCA portal viz. www.mca.gov.in
Listed companies, however cannot take advantage of this Scheme as also companies where the promoters are fighting amongst each other, among other exceptions to the Scheme. Of course there are the usual conditions such as no asset, no liability, no secured loan, no government tax dues etc. and documentary requirements such as statement of account, affidavit, indemnity bond etc. Fees has been hiked to Rs.5000/- per application, which I would say, is quite okay to get a company off your shoulders.
Scheme conditions are quite okay, so it would be in the interest of companies and their promoters, who are not doing any business in such companies or which has been incorporated and kept idle without doing any business to bury the company by following this procedure. Hithertho, conditions were more onerous such as the previous one required no business rule from 2008 onwards and even otherwise the provisions of liquidation of a company is quite cumbersome in Indian company law.
Listed companies, however cannot take advantage of this Scheme as also companies where the promoters are fighting amongst each other, among other exceptions to the Scheme. Of course there are the usual conditions such as no asset, no liability, no secured loan, no government tax dues etc. and documentary requirements such as statement of account, affidavit, indemnity bond etc. Fees has been hiked to Rs.5000/- per application, which I would say, is quite okay to get a company off your shoulders.
Scheme conditions are quite okay, so it would be in the interest of companies and their promoters, who are not doing any business in such companies or which has been incorporated and kept idle without doing any business to bury the company by following this procedure. Hithertho, conditions were more onerous such as the previous one required no business rule from 2008 onwards and even otherwise the provisions of liquidation of a company is quite cumbersome in Indian company law.
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