The Registrar of Companies has struck off 2,361 companies off the register which under the law cease to exist, Registrar D.K. Hettiarachchi told the Sunday Times FT.
These companies had failed to re-register under the New Companies Act No.7 of 2007. Mr Hettiarachchi said a recent position paper by Transparency International (TI) on the Companies Act No. 7 of 2007, raising concerns in particular over Section 487, was their opinion (See page 4). TI said many stakeholders likely to be impacted have no recourse through the Act to prevent errant business persons and directors of companies from misusing section 487 to defraud.
TI added that it gives significant opportunities for errant directors and controlling shareholders to avoid and evade liabilities and penal sanctions; due to the fact that when a company is struck off the register it ceases to be a legal entity and therefore action cannot be brought against it thereafter.
However, Mr. Hettiarachchi said there is recourse under subsection 4 of section 487 for creditors and stakeholders through subsection 4 which allows anyone who has a legitimate money claim pending in court or arbitration proceedings, to apply themselves to re-register the company. Mr. Hettiarachchi said there have been applications for re-registration by creditors under subsection 4 of Section 487 and that re-registration certificates have been issued. He added that any creditors who apply to the Registrar under subsection 4 to have a new number assigned to the company must show the steps they have taken to recover their claims.
According to information provided by the Department, 24,948 applications have been received for re-registration during the period 3 May 2007 to 30 September 2009. During that same period, 17,862 certificates for re-registration were issued and 7086 applications were held for shortcomings. From the 24,948 applications received fore re-registration, 11,303 were submitted in 2007, 12,932 were submitted in 2008 and 713 were submitted in 2009 (up to 30 September).
Of the 17,862 certificates issued by the Department for re-registration, 1,928 were issued in 2007 while 9,784 were issued in 2008. There were 6,150 certificates issued in 2009 (up to 30 September). |