The government is working on a simplified exit-scheme for companies that would allow them to exit within 60 days.

In addition, smaller companies along with companies which have not commenced business, are expected to be exempted from procedural formalities such as submitting an affidavit of a first class magistrate and detailed audited accounts of the company.

"Learning lessons from the failure of the earlier Simplified Exit Scheme, introduced in March 2003, we have decided to work on new scheme that is well balanced but workable. We are holding discussions with various bodies such as Institute of Chartered Accountants of India, Institute of Company Secretaries of India and other trade and commerce associations," Premchand Gupta, minister of company affairs told Business Standard.

The minister added that ideally a company should be able to voluntarily wind up within two months of filing an application with the Registrar of Companies.

The Naresh Chandra Committee recommendations for simpler dispensation for private limited company and limited liability partnerships had also suggested that amendments be introduced to section 560 of the Companies Act, to provide simplified exit route that enables companies to exit within 120 days.

Even though the ministry is in the process of formulating a Bill for amending the Companies Act, sources said that the government would not wait till the amendments are passed and would introduce a new scheme through an administrative order.

The SES 2003 was introduced to help defunct companies to escape mandatory filing of returns every year by striking off their names from the RoC list. The scheme, however, elicited a poor response during one year it was in operation till March 2004, due to procedural difficulties faced by the companies applying.

Ministry sources said that a special category of companies would be identified, which comprise smaller companies and those that have not raised any paid-up capital.

Such companies could submit a certification from Institute of Chartered Secretary of India, with the application to the RoCs rather than going through the cumbersome procedure of procuring an affidavit from a first class magistrate. These companies could be exempt from other procedural formalities such as submitting detailed audited accounts.

According to sources, around 15,000 companies had availed themselves of SES 2003 as on March 2004, while around 60 per cent of total registered companies had defaulted with various provisions of Company Law, including non-filing of returns with the RoCs.