Over 7,700 firms voluntarily exited biz since setting up C-PACE: Centre

NEW DELHI: More than 7,700 companies have voluntarily closed down their business in the country since the setting up of the Centre for Processing Accelerated Corporate Exit (C-PACE) in May this year, and the time taken for voluntary exit has come down to around 110 days, according to the government.

The corporate affairs ministry operationalised the C-PACE on May 1, 2023, to facilitate and expedite the applications filed for voluntary exit under the provisions of Section 248 (2) of the Companies Act, 2013.

The applications for voluntary closure under C-PACE are processed in a centralised manner for an efficient and uniform outcome, Minister of State for Corporate Affairs Rao Inderjit Singh said on Monday.

“Since the setting up of C-PACE, 7,721 companies have been struck off till 05.12.2023, under section 248(2) of the Act... the time taken under C-PACE for voluntary exit has reduced to around 110 days during the current year,” he said in a written reply to the Lok Sabha.

In a separate written reply, Singh said the CSR-related disclosures are filed by the companies in the MCA 21 portal.

He said whenever a violation of CSR provisions is reported, action against such non-compliant companies is initiated as per provisions of the Companies Act after due examination of records and following due process of law.

Under the Act, certain class of profitable companies are required to shell out at least two per cent of their annual average net profit towards CSR (Corporate Social Responsibility) activities.

“So far, sanction for prosecution has been accorded in 366 cases. Of these, 175 applications for compounding have been made and 131 cases have been compounded.

“Now, the non-compliance of CSR provisions has been converted as a civil wrong wef 22nd January 2021,” he added.