Easy Exit Scheme, 2010 [Circular No.2]

PrintPDF General Circular No. 2 /2010
F. No. 2/7/2010-CL V
Government of India
Ministry of Corporate Affairs
5th Floor, A Wing, Shastri Bhavan,
Dr. R.P. Road, New Delhi
Dated the 26th May, 2010
To
All Regional Director,
All Registrar of Companies.
Subject: Easy Exit Scheme, 2010
Sir,
It has been observed that certain companies have been registered
under the Companies Act, 1956, but due to various reasons some of them are
inoperative since incorporation or commenced business but became
inoperative later on and are not filing their due documents timely with the
Registrar of Companies. These companies may be defunct and are desirous
of getting their names strike off from the Register of Companies.
2. In order to give an opportunity to the defunct companies, for getting
their names strike off from the Register of Companies, the Ministry has
decided to introduce a Scheme namely, “Easy Exit Scheme, 2010” under
Section 560 of the Companies Act, 1956. The details of the Scheme are as
under:-
(i) The Scheme shall come into force on the 30th May, 2010 and shall
remain in force up to 31st August, 2010.
(ii) Definitions - In this Scheme, unless the context otherwise requires, -
(a) “company” means a company registered under the Companies
Act, 1956;
(b) “Collective Investment Management Company” means the
company as defined in clause (h) of sub-regulation of 2 of
Securities and Exchange Board of India (Collective Investment
Companies) Regulations, 1999;
(c) “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;
(d) “Non-Banking Financial Company” means a company as
defined under clause (f) of section 45-I of the Reserve Bank of
India Act, 1934;
(e) “Scheme” means the “Easy Exit Scheme, 2010”, being
specified through this Circular;
(f) “vanishing company” means a company, registered under the
Companies Act, 1956 and listed with Stock Exchange which,
has failed to file its returns with Registrar of Companies and
Stock Exchange for a consecutive period of two years, and is
not maintaining its registered office at the address notified with
the Registrar of Companies or Stock Exchange and none of its
Directors are traceable.
(iii) Applicability: -
(a) Any “defunct company” which has active status on Ministry of
Corporate Affairs portal may apply under EES, 2010 in
accordance with the provisions of this Scheme for getting its
name strike off from the Register of Companies;
(b) Any defunct company which is a Government Company shall
submit ‘No Objection Certificate’ issued by the concerned
Administrative Ministry or Department or State Government
along with the application under this Scheme.
(c) The purpose of the Scheme is to allow eligible companies to avail
of this opportunity to exit from the Register of Companies after
fulfilling the requirements laid down herewith and the decision of
the Registrar of Companies in respect of striking off the name of
company shall be final.
(iv) Scheme not applicable to certain companies: - The Scheme does not
cover the following companies namely:-
(a) listed companies;
(b) companies registered under section 25 of the Companies
Act, 1956;
(c) vanishing companies;
(d) companies where inspection or investigation is ordered and
being carried out or yet to be taken up or where completed
prosecutions arising out of such inspection or investigation
are pending in the court;
(e) companies where order under section 234 of the
Companies Act, 1956 has been issued by the Registrar and
reply thereto is pending or where prosecution if any, is
pending in the court;
(f) companies against which prosecution for a noncompoundable
offence is pending in court;
(g) companies accepted public deposits which are either
outstanding or the company is in default in repayment of
the same;
(h) company having secured loan ;
(i) company having management dispute;
(j) company in respect of which filing of documents have
been stayed by court or Company Law Board(CLB) or
Central Government or any other competent authority;
(k) company having dues towards income tax or sales tax or
central excise or banks and financial institutions or any
other Central Government or State Government
Departments or authorities or any local authorities.
(v) Procedure for making an application:-
(a) Any defunct company desirous of getting its name strike off
the Register under Section 560 of the Companies Act, 1956
shall make an application in the Form EES, 2010, annexed;
(b) The Form EES, 2010, should be filed electronically on the
Ministry of Corporate Affairs portal namely www.mca.gov.in
and there shall be no fee payable for filing of the same;
(c) In case, the application in Form EES, 2010, is not being
digitally signed by any of the director or Manager or Secretary,
a physical copy of the Form duly filled in, shall be signed
manually by a director authorised by the Board of Directors of
the company and shall be attached with the application Form at
the time of its filing electronically;
(d) In all cases, the Form EES, 2010, shall be certified by a
Chartered Accountant in whole time practice or Company
Secretary in whole time practice or Cost Accountant in whole
time practice;
(e) The company shall disclose pending litigations if any,
involving the company while applying under this Scheme;
(f) The Form shall be accompanied by an affidavit annexed at
Annexure- A of Form EES, 2010, which should be sworn by
each of the existing director(s) of the company before a First
Class Judicial Magistrate or Executive Magistrate or Oath
Commissioner or Notary, to the effect that the company has not
carried on any business since incorporation or that the
company did some business for a period up to a date (which
should be specified) and then discontinued its operations and
has not carried on any business after the 1st April, 2008, as the
case may be;
(g) The Form EES, 2010 shall further be accompanied by an
Indemnity Bond, duly notarized, as annexed at Annexure B of
Form EES, 2010, to be given by every director individually or
collectively, to the effect that any losses, claim and liabilities
on the company, will be met in full by every director
individually or collectively, even after the name of the company
is struck off the register of Companies;
(h) The Company shall also file a Statement of Account
annexed at Annexure C, prepared as on date not prior to more
than one month preceding the date of filing of application in
Form EES, 2010, duly certified by a statutory auditor or
Chartered Accountant in whole time practice, as the case may
be.
(vi) Simplified procedure for Registrar of Companies for removal of
name of defunct companies:-
(a) The Registrar of Companies, on receipt of the application,
shall examine the same and if found in order, shall give a notice
to the company under section 560(3) of the Companies Act, 1956
by e-mail on its e-mail address intimated in the Form, giving
thirty days time, stating that unless cause is shown to the
contrary, its name be struck off from the Register and the
company will be dissolved;
(b) The Registrar of companies shall put the name of applicant(s)
and date of making the application(s) under Easy Exit Scheme,
2010, on daily basis, on the MCA portal www.mca.gov.in, giving
thirty days time for raising objection, if any, by the stakeholders
to the concerned Registrar;