The Limited Liability Partnership Act to make winding up of cos easier, faster

Our Bureau

Mumbai, April 25

The Ministry of Company Affairs will issue a tender for enabling e-liquidation of companies.

The tender will possibly be as big as the MCA 21 e-governance project which cost Rs 343 crore and took 60 weeks to implement, Ms Komal Anand, Secretary, Ministry of Company Affairs, said on the sidelines of the inauguration of the Mumbai registry of MCA 21.

There are 7,000 companies in India under liquidation, she said. "This involves a huge amount of documentation and this year we have decided that we should address the issue."

The Ministry intends to make it easier and faster to wind up companies through the Limited Liability Partnership Act, which is in the process of being drafted. The Ministry is also drafting the Competition Act, she said.

New Companies Act

The Ministry will soon tender for digitisation and implementation. But it will be the new Companies Act, which will pave way for the Limited Liability Partnership Act, she said.

The new Companies Act provides for a National Company Law Tribunal, which will take over many of the functions currently served by the Board for Industrial and Financial Reconstruction and the High Courts. "We hope to bring down the time taken for winding up companies to three years; currently it takes more than 11 years," she said.

The draft of the new Companies Act will be taken to the Union Cabinet, but is unlikely to be presented in Parliament when it sits this May, she said.

(This article was published in the Business Line print edition dated April 26, 2006)
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