49,000 ghost companies exist in southern region


Express News Service

Chennai:

More than 17,000 companies in Chennai region have flouted statutory norms including submission of balance sheets as well as annual general body reports over the last five years, according to Ministry of Corporate Affairs director B K Bansal.



Addressing a press conference on Friday, he said in Tamil Nadu there are 70,998 companies that are registered as of June 30, 2010 and of them about 54,402 are active. There are about 13,811 companies, which are already in the process of being struck off from the register under section 560 of the Companies Act.



He said as of now there are 49,000 ‘ghost’ companies or the firms that exist only in paper of the 2.04 lakh companies in southern region. Bansal said by August 31, he expects about 25,000 companies will be struck down from the register of companies after complying with the Easy Exit scheme which was introduced on May 30 along with the Company Law Settlement Scheme.



He said the ministry has introduced these two schemes to provide waiver of 75 per cent of additional fee besides granting the defaulters amnesty and an easy platform for defunct companies for getting their names struck off from the register of companies. Both the schemes will be in force till August 31, 2010. “After August 31st, we will be initiating legal action against the erring firms,” Bansal said.



“Under the Company Law Settlement Scheme, we will provide an opportunity to the defaulting companies to file their belated documents by paying addition fee of 25 per cent of the actual additional fee payable for filing belated documents under the Companies Act 1956,” Bansal said.



The scheme, which was introduced after 10 years, has already generated interest among the entrepreneurs and we have collected Rs 2.83 crore under the scheme in Chennai region and 9.17 crore in southern region from 1st June 2010 to 8th July 2010.



Under the Easy Exit Scheme the ministry is providing an easy platform for defunct companies for getting their name s struck off from the register of companies. The first of its kind was introduced in 2000 as Fast Track section 560 scheme and thereafter two more schemes were introduced in 2003 and 2005. The objective is to provide defunct companies an easy exit route rather than pursuing the protracted process of voluntarily winding up of the companies which involved and high cost and was time consuming.



Bansal said about 3,488 companies have availed the Company Law Settlement Scheme in Chennai and 12,442 companies in the southern region.



He said the schemes are to account all companies in the Companies Act. “If the erring companies don’t avail of the scheme then we will take legal action,” he added.