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Company law

Ram Subramaniam, e-mail

The amnesty scheme of the Company Law Board (CLB) for compliance/regularisation with filing, is too unreasonable and irrational for the amounts it is seeking for non-compliance. There needs to be serious rethinking on it.

The sole aim of the scheme seems to be fund raising of Rs. 25 crores for the southern region (as put forward by Mr. V. Sreenivasa Rao, Regional Director (South), Dept. of Company Affairs, DCA.)

With thousands of companies across the country being the culprits (17,300 in the southern region alone), the causes for non-compliance by such a large number of companies need careful examination. The majority of these have registered as new companies an d have not even undertaken any business activity since they were registered.

The DCA and CLB need to recognise this, and distinguish between the active and inactive companies, as well as public and private limited companies and have a different set of filing norms and penalty for them under this amnesty scheme. Companies in the p ublic sector that have been active, whether in business or not, could pay the prescribed penalty since they have been active. Those private companies that have been inactive, can be given a relief by a nominal penalty/fee.

The CLB/DCA could give these defaulting companies a choice of either paying the nominal amount of fine or cancelling their registration. This way, the compliance and collection of fines would be better. This would help thousands of small and private comp anies across the country.