Government introduces settlement/exit schemes for defaulting companies

The ministry of corporate affairs has introduced a 'Company Law Settlement Scheme, 2010' to give defaulting companies an opportunity to make their default good by filing belated documents and to become a regular compliant in future.

The ministry has also introduced an 'Easy Exit Scheme, 2010' under section 560 of the Companies Act, 1956, that offers an opportunity to defunct companies for getting their names struck off the register of companies.

Under the settlement scheme, the Registrar of Companies will condon the delay in companies filing documents with it and grant immunity from prosecution and charging of additional fee of 25 per cent of actual additional fee payable for filing belated documents under the Companies Act, 1956.

After granting the immunity, the registrar concerned will withdraw prosecutions pending, if any, before the concerned courts.

The scheme will be in operation from 30 May to 31 August 2010 and at the conclusion of the scheme, the registrar will take necessary action under the Companies Act, 1956 against the companies that have not availed of this scheme and are in default of filing of documents in a timely manner.

The `Easy Exit Scheme, 2010' does not inter-alia cover the listed companies, section 25 companies, vanishing companies, companies under inspection/investigation, companies against which prosecution for a non-compoundable offence is pending in court, companies having outstanding public deposits or secured loan or dues towards banks and financial institutions or any other government departments etc or those having management dispute or those companies that are barred by courts from filing documents or CLB, the central government or any other competent authority.