Meaning of Vanishing Company

Vanishing company means a company, registered under the Companies Act, 1956 and listed with Stock Exchange which, has failed to file its returns with Registrar of Companies and Stock Exchange for a consecutive period of two years, and is not maintaining its registered office at the address notified with the Registrar of Companies or Stock Exchange and none of its directors are traceable.

Criteria for identification of a vanishing company:

A company would be deemed to be a vanishing company, if it is found to have:

(a)     Failed to file returns with Registrar of Companies (ROC) for a period of two years;

(b)     Failed to file returns with Stock Exchange (SE) for a period of two years (if it continues to be a listed company);

(c)     It is not maintaining its registered office of the company at the address notified with the Registrar of Companies/ Stock Exchange; and

(d)     None of its Directors are traceable.

Notes:

(i)    All the conditions mentioned above would have to be satisfied before a listed company is declared as a vanishing company;

(ii)   The conditions mentioned at (a), (c) & (d) would suffice to declare a company as vanishing if such company has been de-listed from the Stock Exchange.

*******

On 17 ^th July, 2014, The Minister of Corporate Affairs, Shri Arun Jaitley in a written reply to a question in Lok sabha had stated 238 companies were identified as ‘Vanishing Companies’. They had raised funds through Public issues and had stopped filing financial statements and annual returns with the concerned regulators. Of these, 128 companies were removed from this category and placed under a ‘Watch List’, as they had started filing their financial statements and annual returns. In addition, 32 companies are presently under liquidation. As on date, there are 78 companies that continue to be classified as ‘vanishing companies’. The total amount of Public Issues made by these 78 companies comes to approximately Rs 310.21 crores .