Company Incorporation VPP scam

What is Company Incorporation VPP scam?

An entrepreneur starts their new business by getting their company registered as the final step to fulfil their dreams. But chances are that they fall prey to VPP scams. Once a private limited company get incorporated or a LLP (Limited Liability Partnership) gets registered the details of its promoters, shareholders and directors like name, email ids, registered office etc. become available online through MCA (Ministry of Corporate Affairs) website. The scammers use this information to send VVP Posts.

What is VVP Post?

Value Payable System also known as VVP post, is a service from India Post that collects payment for articles sent by post from the receiver. You can send registered parcels, registered letters, registered book packets and newspapers through VVP post which require the receiver to make the payment for the articles upon delivery. Accepting or rejecting the package is then up to the receiver. The scammers usually send useless packages that need to be paid containing books or DIN letters that are never useful.

You can receive such packages at two stages through:-

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

Upon application of DIN at the MCA office basic details like name, mail-ID and address of registered office become accessible publically online.

Scammers take the opportunity here to send registered posts through VVP parcels. These parcels usually contain DIN rules, Acts, printed copy of DIN letter, etc. for a hefty price. These details are available on the MCA website for free.

If accepted these fraud parcels cost the receivers hefty price for no reason. The entrepreneurs need to reject such parcels. DIN is available online as letter which can even be downloaded from the MCA website for free.

2. Upon Incorporation of a company/Registration of an LLP -

Once more information related to a company or LLP such as name, address, director’s address is made public online through the MCA Website.

The scammers use this information to send a VPP posts that contain nothing constructive or important. If the parcel is accepted the receiver has to pay a huge price for something that is just junk.

How Should Entrepreneurs or start-ups deal with such scams?

• First and foremost, you need to know that except for a notice, the MCA or the registrar does not provide any certificate/document in hard copy. Thus there is surely no letter or document being sent by the department in form of a hard copy.
• Second, any parcel or document sent by MCA would never be chargeable. If department ever sends you a communication, it will be sent to you either by way of registered post/speed post/normal post or courier.
• Third, accepting or rejecting the VVP post is up to the receiver. These posts never contain anything important so you can strongly reject such posts. If the department sends a document to the company it will be sent through registered post, speed post or normal post. Everything is available on the MCA website for free which can be downloaded any time you need.