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Easy Exit Scheme

04 January 2011

Hi all,

I need ur immediate attention in a matter regarding easy exit scheme.

One of my unlisted public ltd company wants to avail this easy exit scheme. The paid up capital of the company is Rs. 3lac n currently having two directors. Now my question is whether i hv to increase the paid up capital position of the company by filing form 2 or i cn directly avail the scheme. Also in case of directors, one of the ROC officer at mumbai told me that u cn co-opt one director for the time being to avail the scheme. Is it correct or hv to go by regular method of obtaining a DIN, than form32 and DIN 3.

Kindly giv ur valuable inputs. Response awaited.

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2 Replies

J. Manivannan (Advocate & IP) (242 Points)
Replied 04 January 2011

According to sub-section (5) of section 3 of the Companies Act, 1956 your company is already became a defunct company. There is no need to induct any new director or enhance your share capital for availing that scheme.

Sub section (5) of section 3

Where a private company or a public company fails to enhance its paid-up capital in the manner specified in sub-section (3) or sub-section (4), such company shall be deemed to be a defunct company within the meaning of section 560 and its name shall be struck off from the register by the Registrar.

Sub section (4) of section 3

Every public company, existing on the commencement of the Companies (Amendment) Act, 2000, with a paid-up capital of less than five lakh rupees, shall within a period of two years from such commencement, enhance its paid-up capital to five lakh rupees.

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Neetu Agrawal (PCS) (213 Points)
Replied 05 January 2011

Thanx a lot Sir,

Regarding increase of paid up capital i gt my doubts cleared bt u said in case of Director no need to induct third director. So while filing affidavits of the directors, did affidavit by two present directors wud serve my purpose? or hv to arrange affidavit for third director also...