New Schemes to Ease the Process of Closing a Business

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Jul. 12 – The Ministry of Corporate Affairs (MCA) will launch two schemes that will ease the process for companies wanting to formally close a business.

The Easy Exit Scheme 2010 will allow exiting companies to have their names taken out of the Registrar of Companies quicker and at lower costs applicable from May 30 to August 31.

According to MCA South Regional Director BK Bansal, with an affidavit, an indemnity bond and a statement of accounts duly certified by a chartered account, the company name can be struck off.

The Company Law Settlement Scheme 2010 will require companies to file documents and returns to authorities regularly. For defaulting companies, this means that they will be able to file their delayed documents at an additional cost of 25 percent of the actual additional fee based on the Companies Act 1956 thus also increasing collection rates for the MCA.

Based on Ministry estimates out of the 70,998 registered companies, 13,811 of those are undergoing the process of de-listing.