India Creates Easy Exit Scheme for Inoperative Companies
Jun. 1 – India’s Ministry of Corporate Affairs (MCA) issued General Circular No. 2/2010 on May 26 which featured the establishment of the Easy Exit Scheme (EES), a process that will assist the Registrar of Companies (RoC) to remove inoperative companies from the Register.
With the addition of the EES, the RoC now has to:
- File the EES form
- Give 30 days notice to the company up for removal from the Register, during which time the company must state its case as to why its name should not be stricken from the list
- Update the names and dates of register applicants on the MCA web page, allowing 30 days for interested parties to submit objections
- Contact the Reserve Bank of India, the Securities and Exchange Board of India, and the Tax Department on a weekly basis, intimating to them the status of companies up for removal and allowing the establishments 30 days to submit objections
- After the 30 days expire, the RoC should strike the company name from the Register and publish the news in the Official Gazette
The EES is not applicable for listed companies, Section 25 companies, companies which are under investigation for non-compoundable offenses, companies which have secured loans or have accepted public deposits which are outstanding, and vanishing companies.
The EES was put into effect starting May 30, 2010 and will stay in effect until August 31, 2010.
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