Very-few-takers-for-the-easy-exit-scheme-2010.
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
“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
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.
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