Filing Overdue Returns Mandatory before closing a firm: MCA

The Ministry of Corporate Affairs has introduced new conditions for companies that want to remove their names from the Register of Companies. The changes state that companies must file their overdue financial statements and annual returns before filing for removal. If the Registrar initiates the process, companies must file all pending financial statements and annual returns before applying. The government aims to speed up the process of closing companies and has established the Centre for Processing Accelerated Corporate Exit. The purpose of these changes is to ensure that companies remain accountable for their actions, even after they cease operations. Under the law, a company can apply for removal if it is defunct, and it must extinguish all liabilities before filing the application. Experts believe that these amendments promote corporate transparency and compliance and safeguard stakeholders’ interests.