What is Track Exit (FTE) Scheme?
Fast Track Exit Scheme is introduced by Ministry of Corporate Affairs for giving opportunity to non-operating companies for getting their names struck off from the records of Ministry of Corporate Affairs. Fast Track Exit mode is an easy mode of closing non-operating companies at cheaper cost with lesser formalities under section 560 of Companies Act 1956. Even after the enactment of Companies Act 2013 also, the scheme is still available.
Who can apply for FTE?
The companies satisfying following condition can apply for FTE
1. Should not be in any business operation for last one year prior to applying for the scheme or
Not commenced business activity after incorporation
2. Does not have any assets and liabilities as on the date of application except share capital and accumulated losses
3. Does not maintain any bank account as on the date of application
4. Should not have any statutory liabilities outstanding
However the following companies are ineligible for the scheme.
• Listed Companies
• De-listed Companies due to non- compliance of Listing Agreement or any other statutory Laws
• Section 25 Companies
• Vanishing companies
• Companies where investigation / inspection ordered and yet to be taken up or pending
• Companies where order u/s 234 has been issued by ROC and reply is pending
• Companies where prosecution for a non-compoundable offence is pending in court
• Companies accepted deposits which are outstanding or default in repayment
• Company having secured loan
• Company having management dispute
• Company for which filing of docs have been stayed by court or CLB or CG or any other competent authority
• Company having dues of Income tax / sales tax / central excise / banks / financial institutions / CG / SG / other local authorities
• Companies not having active / dormant status on MCA portal
What are the steps for applying the scheme?
The procedure for applying scheme are as follows.
1. Convene board meeting and pass resolution for applying for FTE and authorizing a practicing chartered accountant to Sign the Statement of accounts
2. Prepare Indemnity Bond and Affidavits by directors, sworn before notary. These shall be on stamp papers with a minimum value of Rs. 100.
3. Prepare Statement of accounts authenticated by a practicing Chartered accountant. The date of statement shall be on or after the date of Board.
How can file application for the scheme?
The application can be filed in form FTE which is available from the website mca.gov.in. The flowing are the mandatory attachments of form FTE.
1. Authenticated statements of accounts
2. Affidavits and Indemnity bond
3. Attested copies of PAN card, and an address proof
4. True copy of Board resolution passed.
The fees for applying for the scheme is Rs. 5000.
How much time it will take to complete the procedure after filing all necessary documents?
The Registrar of Companies shall examine the same and if found in order, shall give a notice to the Company under section 560 (3) of the Companies Act, 1956 by e-mail on its e-mail address intimated in the Form, giving thirty days’ time, stating that unless cause is shown to the contrary, its name be struck off from the Register and the Company will be dissolved.
Tags Corporate Law