Regarding disclosure of company

This query is : Resolved

Pratiksha khandelwal (Querist)
Follow

19 September 2014 Dear Sir,

We want to file form FTE for closure of a pvt. ltd. company. we are facing a problem that form is not accepting any value other than that for 0 for assets and liabilities.
And we have some balance in cash .

Please help us.

With regards

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
Follow

19 September 2014 Can't opt for FTE if company has cash balance as asset.

Pratiksha khandelwal

Pratiksha khandelwal (Querist)
Follow

21 September 2014 Then what will we do further for closure of such company?

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
Follow

20 July 2025 You're absolutely right to raise this concern — and yes, under the Fast Track Exit (FTE) Scheme (now governed under Section 248 of Companies Act, 2013 through Form STK-2), a company must have nil assets and nil liabilities at the time of application.

✅ Why Form STK-2/FTE Is Rejected with Cash Balance:
STK-2 requires zero balance sheet — even cash/bank balance is considered an asset.
Hence, the system won’t accept the form unless both assets and liabilities are shown as ₹0.
🔧 What You Can Do Now — Step-by-Step Solution:

1. Utilize or Withdraw the Cash Legally
You must reduce the cash balance to zero through legitimate expenses or distribution:

Option A: Pay Off Any Liabilities or Expenses

If you have any:

Professional fees
ROC late filing fees
Auditor remuneration
Stationery, closure filing fees, etc.
Option B: Distribute Remaining Cash as Shareholder Capital Refund (Voluntary)

You may treat the remaining cash as part of a capital refund to shareholders.
Pass a board resolution for such withdrawal/distribution.
Ensure the books reflect cash drawn by shareholders, leaving cash balance as zero.
Option C: Donate to a Registered Trust (with resolution)

If the amount is small and not worth reclaiming, you may choose to donate and write it off legally.
2. Update Books and Final Accounts
Prepare final accounts showing zero assets and liabilities.
Close all ledger balances: cash, bank, receivables, etc.
3. File Form STK-2
After the books show nil balance:

Hold board and shareholder meetings.
File Form STK-2 with required attachments:
Affidavit & Indemnity Bond from directors
Statement of accounts (certified by CA) showing zero assets/liabilities
Board & shareholders’ resolutions
🧾 Important Note:

Do not show false figures. Complete the above steps genuinely and legally. If MCA finds discrepancies, the strike-off may be rejected or revoked in future.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now