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Firms defaulting on filing returns on the rise,608 of them are dormant

Though there 31,376 registered companies in Pune district,only 28,948 are active and functional.

Written by Partha Sarathi Biswas | Pune |
October 12, 2013 4:35:16 am

Though there 31,376 registered companies in Pune district,only 28,948 are active and functional. The records with the Pune office of the Registrar of Companies (ROC) shows that for the last two years,608 firms are dormant (as on October 9) and have not filed their annual returns or balance sheets.

The ROC has declared as defaulters 1,820 registered companies and initiated action against them. Meticulous details are maintained at the ROC’s Pune office about the companies that get registered under the Companies Act. The law mandates that companies apart from filing their annual reports also comply with norms laid down in the Act.

Failure to comply with the norms lands the companies in the defaulter’s list and can attract penal action,including a fine up to Rs 1 crore and prison term up to three years. ROC records point out that in the last three years more than 3,500 directors of various companies have been termed as defaulter. Similar penal action can be initiated against the directors,who are additionally debarred from holding any other position in future. Senior officials of the ROC office said in many cases,the companies who have come into dormant list have failed to carry out any business since their inception. “In some cases,the companies have merged with other companies but have failed to notify the ROC office. Such companies are put in the dormant list,” said an official.

To safeguard against possible defaulting,stringent laws on borrowing have been enacted for the companies to follow.

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Of late,ROC officials have come across companies defaulting and thus the list of defaulting companies is getting longer. In many cases,the same company has been found to be a habitual defaulter,which prompts the ROC officials to initiate criminal action.

But Director General of Mahratta Chamber of Commerce Industries and Agriculture (MCCIA),Anant Sardeshmukh,said many companies in the list are defaulters by mistake.

“These are small companies who are struggling to make their ends meet and often end up defaulting in some of the many norms and bylaws of the Act. We require simplification of the Act and to make it user-friendly,” he said.

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