BEWARE OF THE COMPANY REGISTRATION SCAM

Starting up is a time when most people fall prey to numerous shams. This is primarily due to their lack of knowledge of basic legal compliances. Some scammers specifically take advantage of this and con startups with their money. Many of our clients have already faced this scam. While we could help most of them out since we had prior intimation from them about this, there remains a large section who are not even aware of this scam. Resultantly, they fall prey to this unknowingly.  

What is this scam all about?

 

Once you start incorporating your company/registering your LLP, the various basic details relating to the directors/shareholders of the company are available to the general public. Anyone can access this information from the MCA website. Scammers are also using this public information system to obtain this information from the MCA and use it to scam the startups. Scammers are sending parcels through VPP to these startups containing useless materials which can be accepted only on payment of a certain amount. They label these VPP such as to give an impression that the material has been sent by MCA. Startups end up paying for these and unduly and accepting the packages. These packages contain nothing but useless reading material, company law rules and acts, which are public resources and available for download for free in the MCA website itself.

There are two stages when you can receive such packages:

1) On application of Director’s Identification Number (DIN):

When a DIN is applied, the basic details of the applicant, like name, address, etc is publically accessible. Scammers send a VPP parcel usually containing DIN rules, Acts, printed copy of DIN letter, etc by way of registered post to the startups. These parcels can be accepted on payment of a certain price which may be as high as Rs. 2000-3000.

2) On Incorporation of a company/Registration of an LLP

Again, information relating to a company or LLP, with regards to its name, address, director’s address is publicly accessible through the MCA Website. Here again, scammers use this information to send a VPP. These posts again do not contain anything of relevance.

How to deal with such scam?

 

• First and foremost, what you need to know is that MCA or the Registrar does not provide any certificate/document in hard copy except notices. Hence, there is absolutely no chance of the department sending you any hard copy of any parcel.

• Secondly, no parcel sent by MCA or any other Govt department would EVER be chargeable. If department ever sends you a communication, it will send you either by way of registered post/speed post/normal post or courier.

• Thirdly, it is always upto you whether to accept or reject such VPP. These VPPs do not contain anything of use or anything that is not available for free in the MCA website.

 

We, at Taxmantra, constantly thrive to make lives hassle free for businesses. We hope that this article reaches a large number of businesses, especially startups and they can save themselves from the clutches of such scammers.

 

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