50 pc of companies fail to respond to CLSS

DCA has about 4,95,741 companies on its register and about 50 per cent of these have defaulted in complying with the company laws, including submission of annual balance sheets. The companies yet to avail the amnesty scheme would hopefully fall in line with compliance, he observed. Analysts feel that many of the companies which have not responded to the CLSS may not be existing.

The collection was maximum in the western region (Rs 46.370 crore) followed by the southern region (Rs 38.26 crore). As many as 42,808 companies from the western region responded while 32,696 companies from the southern region settled their problems.

Reddy said that the centre would soon place the new Insolvency Act and Competition Policy Act on the floor of the parliament which begins its winter session from November 20. The proposed act suggested setting up a National Tribunal Cell to deal with cases related to sell or auction of assets of the defaulted companies in order to pay back their debts to the public and institutions. The department is seriously considering for further simplifying the process relating to striking off the names of companies which genuinely are not carrying on any business.

On vanishing companies, Reddy said DCA and the Securities and Exchange Board of India have traced only 27 out of 147 such companies. A task force has been constituted to take necessary action, he added. He said it was also suggesting stringent action against any loss to the company by the managements.

As part of corporate excellence and to harmonise accounting standards like US GAAP, the department has initiated a memorandum of understanding between the three professional bodies – the Institute of Chartered Accountants of India, the Institute of Cost and Works Accountants and the Institute of Company Secretaries of India

He said “we are trying to involve the Reserve Bank of India to see that the accounting standards of companies are of international standards.”Another initiative being taken is drafting of legislative framework to enable formation of cooperative businesses into companies under a regulatory framework similar to that of private limited companies.

He said by this the options to co-operatives was being enlarged as many of them had expressed a desire to change into companies.

After PAN, now CIN for companies

MUMBAI: After the successful introduction of Permanent Account Number (PAN) by the Income-Tax Department for individual and corporate tax payers, the Department of Company Affairs has followed suit by unveiling a corporate identity number (CIN) for registration of companies.

The 21 digit CIN has been designed by the Centre for Monitoring Indian Economy to help easy identification of companies belonging to a particular state, type of industry, its ownership and age, according to CMIE director Mahesh Vyas.

DCA secretary P L Sanjeev Reddy said CIN has been introduced with effect from November one for new companies while the existing ones would be given their number from the new year.

Explaining the 21 digit number, Vyas said the first digit would indicate whether the company is listed/unlisted, the next five digits relate to the economic activity being carried out by it, the next two for registration, next four digits for the company’s age, three for ownership and the last six would be the serial number of the company. CMIE was also compiling a data base on CD-Rom which would list all the companies in India.