Non-maintenance of registered office to trigger de-registration process

New Delhi, Sept 1 (KNN) In a bid to curb offences under the Companies Act 2013, an expert committee reviewing the provision of Companies Act recommended that those firms which do not maintain registered offices should be struck off the Registrar of Companies (RoC).

It means that the companies which are not maintaining their registered offices at the given address to the Registrar of Companies, the government will declare them shell companies.

The above recommendation was made by the committee to enhance corporate compliance and governance in order to promote ease of doing business.

A shell corporation is a company or corporation that exists only on paper and has no office and no employees, but may have a bank account or may hold passive investments.

Till the end of December 2017, over 2.26 lakh companies were deregistered for various non-compliances and being inactive for long.

Besides, holding of directorships beyond permissible limits to trigger disqualification of such directors, Committee recommended.

The panel has also recommended “imposition of a cap on independent director’s remuneration in terms of percentage of income in order to prevent any material pecuniary relationship, which could impair his independence on the board of the company.”

It has said the remuneration of an independent director should be capped at 20% of their gross annual income.

Apart from this, panel has recommended ways to declog the National Company Law Tribunal.