Government sets up centralised facility for voluntary closure of companies
1 min read . Updated: 18 Mar 2023, 02:41 PM IST
Premium- The new facility will make decisions on corporate requests for winding up and companies will no longer have to go to the Registrar of Companies (RoCs) in the state where they are registered
New Delhi: The corporate affairs ministry has set up a facility to enable quick and faceless decision-making on requests from companies for winding up operations and exit.
The move is part of efforts to improve the overall regulatory framework and to ensure predictability of regulatory decisions. The ministry said in a notification that a Centre for Processing Accelerated Corporate Exit (C-PACE) has been set up at the Indian Institute of Corporate Affairs (IICA) in Haryana.
The new body set up under section 396 of the Companies Act comes into force from 1 April, the ministry said. The new centralised facility will make decisions on corporate requests for winding up and companies will no longer have to go to the Registrar of Companies (RoCs) in the state where they are registered.
Businesses closing down for various reasons only need to file online requests at this new facility. The government believes that ease of exit for businesses that have either failed to take off or want to close operations for various economic reasons will be a key consideration that investors take into account while making investment decisions. The government is also keen to reduce the time taken for voluntary closure of companies from about one to two years to less than six months. The faceless approach to decision-making in this regard is expected to reduce human discretion and any subjectivity in the process.
Voluntary closure of companies is different from winding up of companies by the government for default on filing annual reports for two consecutive years.
