image

Clarification regarding Easy Exit Scheme

General Circular No:12/2011 dated 7th April, 2011

The Ministry of Corporate Affairs has notified the revised simplified procedure for dealing with the applications received under easy exit scheme issued for striking off the name of the Company under Section 560 of the Companies Act 1956 vide its general circular no 12/2011 dated 7th April 2011 against proposals received for simplification.

Guidance has been issued to ROCs to follow revised procedure on the basis of issues faced by them in the current Easy Exit Scheme

1. Prosecution if pending has to be compounded or disposed by Court.

If the pending prosecutions are only for non-filing of Annual Returns U/s 159 and Balance Sheets U/s 220 of the Companies Act, 1956 and the company is actually a defunct one as reflected in the Statement of Accounts submitted along with their application under EES Scheme, such application may be accepted., provided the applicants have already filed compounding application or has furnished an undertaking that the compounding application will be filed before closing of EES Scheme. Steps for final strike of the name of the company should be taken only after disposal of compounding application by the competent authority.

2. How to deal with Companies having assets and liabilities is not specifically discussed in the scheme.

Ministry cannot advise directors and shareholders for waiver of their liabilities and distribution of assets, to the shareholder other then the process provided in the Act. It is for the management of the company to take action, as permissible under law of the land.

3. Directors should be as per database.

Application with certificates from practicing Chartered Accountants, Cost Accountants and Company Secretaries giving their membership number and certifying that the applicants are present Directors of company can be considered.  In such cases, the applicants shall not be asked to file Form 32.

4. As per the procedure signatories details are checked from the database and sometimes it does not match  and  needs  clarification /documentary evidence in this regard.

Application with certificates from practicing Chartered Accountants, Cost Accountants and Company Secretaries giving their membership number and certifying that the applicants are present Directors of company can be considered.

5. Indemnity Bond and affidavit needs to be furnished by the directors

Foreign nationals and NRIs have to get their Indemnity Bond and Affidavit notarized as per their respective country™s law.


profile image

About eMinds Legal

eMinds Legal

eMinds Legal is a Corporate Law Firm based in Gurgaon, India specializing in Corporate Legal, Corporate Secretarial and Compliance. The Firm comprises of a team of Corporate Lawyers and Company Secretaries with in-depth subject matter knowledge and participative industry experience of over 15 years.

Corporate Law Referencer

Recent Articles

Recent Legal updates

Recent Gst Updates