Simplification of Procedure for Removal of Name of Defunct Companies.

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....ons of Section 560 in such a way that the Registrar of Companies (ROCs) can weed out the defunct and dormant companies. This was done vide circular nos.9/7/83-CL.III dated 17.2.1987 and 1/3/91-CL.V / 5/4/91-CL.III dated 19.2.1991. This enabled the ROCs to strike off the names of defunct companies exercising, suo moto, the powers vested in them and on application made by directors confirming that the company has no assets and liabilities and they have no intention to carry on the business and undertaking that they would be personally liable for claims arising in future. 2. The Department subsequently amended Section 3 which came into force w.e.f. 13.12.2000, requiring private companies to increase their paid up capital to Rs.1 lakhs and pub....

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....c companies have not even taken commencement of business certificate as required u/s 149 of the Companies Act. 6. Therefore, the Department has considered providing an easy exit route to small, non-functioning or defunct companies. It has accordingly been decided to introduce a Simplified Exit Scheme (SES), simplifying the procedures to be adopted by companies as well as ROCs in striking off the name of defunct companies, with in-built safeguards to ensure that unscrupulous promoters/directors/managers do not escape their liabilities. 7. There should be an incentive for the companies to exit, and a penalty for continuing to remain on the register without complying with the requirements of section 3. It is, therefore, also proposed that co....

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.... has not carried on any business and has no assets or liabilities. Draft enclosed as Annexure 'B'. (iv) The application should further be accompanied by an indemnity bond, duly notarized, from at least two directors, including managing or whole-time director, if there is one, to the effect that should there be any liabilities on the company, such liabilities will be met in full by them, even after the name of the company is struck off the register of the companies. Draft is enclosed as Annexure 'C'. 10. The Registrar of Companies on receipt of application shall publish in the prescribed proforma (Annexure 'D') in one local and in one national daily, the list of companies that have applied, and are under consideration, for being struck of....

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....--- (Name of the State) Sir, The Company after carefully considering all aspects has duly resolved in the Board meeting held on___________ to make an application for striking the name of our company off the Register u/s 560 of the Companies Act, 1956, if there is a deadlock of having one member in the Board due to demise of other directors, even a single alive director may constitute the board as per Regulation 75 of Table A. (2) I/We furnish the following details and documents for considering the application. (i) Balance Sheet and Profit and Loss Accounts for the year ending _____ showing no assets and liabilities. (ii) An affidavit as per Annexure B of the General Circular No.17/78/2001-CL.V dated 25.3.2003 of D/o Company Affairs. ....

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.... are the directors of ________________________________________Private / Limited. 3. The Company has been inoperative right from the date of its incorporation / for the past __________________ years due to diverse reasons. 4. That a resolution has been passed to approach the Registrar of Companies to strike off the name of company under section 560 he Companies Act, 1956, in the meeting of Directors held on.......... 5. As on date the Company is not having any dues towards Income Tax / Sales Tax / Central Excise/ Banks and Financial Institutions or any other Central or State Government Departments / Authorities or any local authorities. 6. That an application is hereby filed for action under section 560 of the Companies Act, 1956, before....