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The capital market has witnessed a boom period during 1993-1994 when many new co͛s tapped the
capital market and collected funds from the public issue of shares and debentures. Some of these
companies defaulted in their commitments made to the public while mobilizing funds.

Earlier, if the managing director or any of the whole time directors could not be traced, the company
was termed as vanishing.

There are two methods through which vanishing companies can be identified

 
: directors and promoters of the co. represented by the servants, peons by the fake
documents and making a contract, running the company and gaining investors confidence by pooling
the funds from the public. Then incurring huge amount of losses n suddenly getting out of the picture
and being vanished.


: float a company, run it for some three years, show profits and then take it public, collect
horrendous amount of money from the people get it listed & after the 1st year slowly start erring or
publishing results and other basic CG requirements. There will be tones of legal notices getting piled up
by ignoring all of them. Then slowly just disappearing from the scene.






  

O^ A company could be classified as vanishing if it does not file

returns for two years. Earlier, the limit was three years.
^ If all communication remained undelivered or officials didn͛t find
anybody at the registered premises during on-site inspection
3^ A listed company, which has raised capital through IPO and has
stopped its operations, did not file returns either with RoC or SEBI
for 2 years, and did not exist on the registered premises.

è
 
  
 
There are various methods undertaken by mca to avoid the existence of vanishing co͛s The Ministry of
Company Affairs (MCA^ has launched a major e-Governance initiative ͚MCA 21͛. It envisages e-filing of all
documents related to company matters on the MCA portal.

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The Ministry of Corporate Affairs has introduced the MCA21 e-Governance programme with a
view to providing all services relating to ROC offices on-line in e-Governance mode. All filings
from September 16, 2006 can be done only under the Digital Signatures of the authorized
person (MD/ Director/ Company Secretary as the case may be^. There are various channels
 available to stakeholders to enable them to do the statutory filing with ROC offices across the
country
In short e-filling refers to computerized online data filling and data availability to all sources.

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The Information Technology Act, 2000 provides for use of Digital Signatures on the documents
submitted in electronic form in order to ensure the security and authenticity of the documents filed
electronically. This is the only secure and authentic way that a document can be submitted
electronically. As such, all filings done by the companies under MCA21 e-Governance programme
are required to be filed with the use of Digital Signatures by the person authorised to sign the
documents.

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Director Identification Number (DIN^ is a unique identification number for an existing director or
a person intending to become the director of a company. In the scenario of e-filing, DIN will be a
pre-requisite for filing of certain company related documents.

·

 

 

!Any person who is a director of a company or any who one intends/proposed to be a director
of company in future needs to apply for DIN
- As per the recent amendment in the Companies Act ,1956 ,DIN has become mandatory for all
the directors
- DIN is individual specific and not company specific, so only one DIN is required per
director/person

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Company act, Depository act, SCRA,SEBI are some of the regulatory bodies which helps to cease
the economic offences related to IPO.


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