The Companies keen to exit their business for various economic reasons can now hope for quick regulatory clearance with the government operationalizing the newly set up Centre for Processing Accelerated Corporate Exit (CPACE). The Ministry of Corporate Affairs has notified the Companies (Removal of Names of Companies from the Register of Companies) Amendment rules, 2023 authorising CPACE to handle this work, taking over the task from RoCs across the country. CPACE is set up at the Indian Institute of Corporate Affairs, an institution attached to the ministry. The amended rules for removal of companies from the official register will be effective 1st May. The move of shifting voluntary closure of companies to a centralised agency is part of a revamp of the approval process for various corporate filings aimed at uniform and quick decision-making process. The ministry also replaced three forms that are related to the process of striking off the names of companies while giving the all-India jurisdiction to CPACE for voluntary closure of companies. The forms entail some changes, including provision for disclosing pending litigation. Companies chose to go for voluntary closure for various economic reasons including unviability of the business or changed circumstances. For closure, the companies should not have any unmet liability. Voluntary closure is different from government's action of removing a company from the register for defaulting on filing statutory documents for two consecutive years, although most such defaulting companies may also be defunct.
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