The provisions of the Companies Act, 2013 are yet to be notified for the removal of the name of the Company and winding up of the Company. In accordance with the Companies Act, 1956 following are the two options to remove the name of the Company from the register of companies maintained with Registrar of Companies (ROC):
Fast track exit mode
“Striking off the name”
Winding up of the Company
1. Striking off the name of the Company under “Fast Track Exit Mode”.
a. Ministry of Corporate Affairs, Government of India, vide its General Circular No. 36/2011 dated 07th June, 2011 had launched the “Fast Track Exit Mode Scheme 2011” for declaring the company as defunct company. Further, the procedure for getting the name of a Company struck off under “Fast Track Exit Mode” is as follows:-
b. The Company has to hold a Board Meeting and pass resolution for applying & filing application to Registrar of Companies (ROC) for declaring the Company as defunct company.
c. A Company eligible to apply for striking off its name needs to apply to Registrar of Companies in Form FTE.
d. The Form FTE, should be filed electronically on the Ministry of Corporate Affairs portal namely www.mca.gov.in and by making payment of Rs. 5000/- as the ROC fees;
e. In case, the digital signature of any of the Director or Manager or Secretary is not available for affixing to Form FTE, a physical copy of the Form duly filled in, shall be signed manually by a Director authorised by the Board of Directors of the Company and shall be attached with the application Form at the time of its filing electronically;
f. Form FTE, shall be certified by a Chartered Accountant in whole time practice or Company Secretary in whole time practice or Cost Accountant in whole time practice;
g. If the applicant’s name doesn’t match with the database of Directors maintained by the Ministry, the application shall be accompanied by the certificate from the practicing CA/CS/CWA certifying that the applicants are present directors of the Company;
h. Any pending litigations involving the Company should be disclosed while applying under this Scheme;
i. The attachments to Form FTE are as follows:-
- An affidavit sworn by each of the existing Director(s) of the Company to the effect that the Company has not carried on any business since incorporation or that the company did some business for a period up to a date (which should be specified) and then discontinued its operations and has not carried on any business since last one year, as the case may be as per (Annexure A) of the guidelines;
- An Indemnity Bond, duly notarized, to be given by every Director individually or collectively, to the effect that any losses, claim and liabilities on the Company, will be met in full by every Director individually or collectively, even after the name of the company is struck off the register of Companies as per (Annexure B) of the guidelines;
- Statement of Account prepared as on date not prior to more than one month preceding the date of filing of application in Form FTE duly certified by a statutory auditor or Chartered Accountant in whole time practice, as the case may be as per (Annexure C) of the guidelines.
- Copy of Board resolution showing authorization given for filing the application.
- Physical Copy of Form FTE duly signed by Director/MD/Manager/ Secretary authorized by Board of Directors if no DSC is available.
j. 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;
k. The Registrar of companies shall put the name of applicant(s) and date of making the application(s) under Fast Track Exit mode, on daily basis, on the MCA portal www.mca.gov.in, giving thirty days’ time for raising objection, if any, by the stakeholders to the concerned Registrar;
l. In case of company(s) like Non-Banking Financial Company(s), Collective Investment Management Company(s) which are regulated by other Regulator(s) namely RBI, SEBI, the Registrar of Companies, at the end of every week, after the Scheme commences, shall send intimation of such Companies availing Fast Track Exit mode, during that period to the concerned Regulator(s) and also an intimation in respect of all companies availing Fast Track Exit mode, during that period to the office of the Income Tax Department giving thirty days’ time for their objection, if any;
m. The Registrar of Companies immediately after passing of time given in above sub- paras and on being satisfied that the case is otherwise in order, shall strike its name off the Register and shall send notice under Section 560(5) of the Companies Act, 1956 for publication in the Official Gazette and the applicant company under this Scheme shall stand dissolved from the date of publication of the notice in the Official Gazette.
2. Members Voluntary Winding-Up of the Company.
The procedure of Voluntary Winding-Up of the Company is as follows:
Convene a Board Meeting to transact the following business:
a. Make sure that the Company can pay its debts in full within a period of three years if put into liquidation.
b. Declaration in Form No. 149 under Rule 313 of the Companies (Court) Rules, 1959, and verified by an affidavit, by the Directors sworn before a Judicial Magistrate on non-judicial stamp paper of Rs. 20/-
c. Declaration will be accompanied by:
- The Audited Balance Sheet and Profit & Loss Account commencing from the date of last audited Balance Sheet and Profit and Loss account and ending with the latest practicable date before the date of declaration.
- A statement of the Company’s Assets and Liabilities as at that date; and
- A copy of the report of the Auditors of the Company on the above two documents.
d. Approve at the meeting, the draft resolution for Member’s Voluntary Winding up and for appointing Liquidator and fix remuneration and also fix the date, time, place of the General Meeting.
- Copies of item (b) and (c) to be filed and registered with the Registrar at least 5 weeks before the General Meeting.
- Issue notice for convening the General Meeting proposing a Special Resolution, with suitable Explanatory Statement.
- Hold the General Meeting and pass the Special Resolution for winding up. The winding up commences from the time of passing the resolution.
- Within ten days of passing of the resolution, file notice with the ROC for the appointment of the liquidator after paying the requisite fee.
- Submit to the liquidator a statement on the Company’s affairs in Form No.57 in duplicate, duly verified by affidavit in Form No. 58 within twenty-one days of the commencement of winding up.
- File the Special Resolution passed for winding up with Explanatory statement with the ROC within 30 days of its passing in E-Form MGT-14 with requisite fee.
- Within 14 days of passing the resolution for voluntary winding up, give notice of the resolution by advertisement in the Official Gazette and also in some newspaper circulating both in English and in Hindi, in the district where the registered office of the company is situated.
- The Liquidator to publish in the Official Gazette the Notice of his appointment in Form No. 151 of Company Court Rules, 1959 and file with Registrar the Notice of his Appointment in Form No. 152 of Company Court Rules, 1959.
- Liquidator to give notice of his appointment to the concerned Income-tax Officer under Section 178 of IT Act, 1961. No prescribed format for this intimation. Letter would be sufficient.
- If the liquidator is of the opinion that the Company will not be able to pay its debts in full within the period stated in the declaration of solvency, or if the period stated in the declaration of solvency has expired without the debts being paid in full, the liquidator has to summon a meeting of the creditors, and table before the meeting a statement of the Assets and Liabilities of the Company in Form No. 150 of the Companies (Court) Rules, 1959.
- Where the winding up process continues for more than a year, Liquidator should call a General Meeting within 3 month from the end of every year from the date of commencement of winding up, and table before the meeting an account of his acts and dealings along with statement in form No 153 of the Companies (Court) Rules, which should be duly verified in Form 154 of the Company Court Rules.
- If the liquidator is of the opinion that the Company will not be able to pay its debts in full within the period stated in the declaration of solvency, the Liquidator to call a meeting of creditors also within 3 months from the end of the year.
- The Liquidator to file statements in the prescribed manner together with the Audit Report in the prescribed format, with the concerned Registrar of Companies twice in every year, if the liquidation is not completed within one year from the commencement of the winding up.
- Complete the winding up by realizing all assets and paying off all liabilities and returning share capital and surplus, if any. The provisions of sections 426, to 432, 487, 491, 494, 511, 511A, 512, 517 to 520, 528 to 549 and 553 and those of rules from Nos. 124 to 134 and Nos: 312 to 361 of the Companies (Court) Rules 1959 should â€‹also be noted in this respect.
- As soon as the affairs of the Company are fully wound-up, liquidator to prepare his account of the winding up in Form No. 156 of the Companies (Court) Rules 1959 and get the same audited. The audit report should be in the format suggested by ICAI for this purpose.
- Liquidator to call the final General Meeting by giving notice stating the time, place and object of the meeting, in Form No. 155 of the Companies (Court) Rules, 1959 by advertisement in the official Gazette. The Notice in the Gazette to be given not less than one month before the meeting. In addition, the notice should also be published in some newspaper circulating in the district where the registered office of the Company is situated.
- At the meeting, place the accounts prepared under Form No. 156 of the Companies (Court) Rules 1959.
- At the meeting also pass a Special Resolution for disposal of the books and papers of the Company when the affairs of the Company are completely wound up and it is about to be dissolved.
- Within a week of the final General meeting, file the copy of the account with the ROC as well as with the Official Liquidator (OL) and also file a return with both in Form No. 157 of the Companies (Court) Rules 1959. If a quorum is not present at the meeting, file the return in Form No. 158 of the Companies (Court) Rules, 1959.
- File the Special Resolution with the ROC, within 30 days of passing Special Resolution in E-Form MGT- 14 after paying the requisite fee.
SUBSEQUENT COURSE OF ACTION FROM THE ROC AND OFFICIAL LIQUIDATOR
The Registrar of Companies, on receiving the account and the return shall forthwith register them.
The Official Liquidator on receiving the account and the return would make a scrutiny of the books and papers of the Company to ascertain as to whether the affairs of the Company has not been carried on in a manner prejudicial to the interest of its members or public, and makes a report to the concerned High Court. From the date of the submission of the report to the concerned High Court the company is deemed to be dissolved.
The process of removal of the name of the Company from the Register of Companies under “Fast Track Exit Mode” is easy & fast. While the winding up of the Company is a time consuming and cumbersome process.
Tags Corporate Law