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Studentsca (CA Practice ) 31 May 2014
Fast Track Exit mode 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.
kamal gupta (Chartered Accountant) 31 May 2014
A company can be closed by adopting the following ways:-
(A) Strike off a company under Section 560 :
Section 560, of the Companies Act, 1956, deals with strike off provisions of a defunct company. Any defunct company desirous to strike off its name from the register of Registrar of company can apply in Form FTE for strike off its name from the register maintained by ROC as per Guidelines for ‘FAST TRACK EXIT MODE’ issued vide General Circular No. 36/2011 dated 7.6.2011. Similarly, ROC has also power to strike off any defunct company after satisfying himself of the need to strike off a defunct company and has reasonable cause. But before passing any order in this regard, an opportunity of being heard must be provided to the defunct company by following the due procedure u/s 560.
(B) Winding up
Section 425, of Companies Act, 1956, deals with modes of winding up.
The winding up of a company may be either -
(a) By the Tribunal (also known as compulsory winding up)
(b) Voluntary winding up
(c) subject to the supervision of the Court
Voluntary Winding up : You can get a general picture from the following steps of winding up which are summarized below (except Voluntary winding up)
a) Issuing a written demand for debt payments to the target company.
b) Present a winding up petition to the court and the company
c) Court hearing for the petition
d) Granting of winding up order by the court
e) Meeting of creditors and other relevant parties
f) Appointment of liquidator.
g) Realization and distribution of company’s assets to the creditors
h) Realize of duties for liquidator
i) Dissolution of the company.
For more details please visit Company Liquidators website (http://www.companyliquidator.gov.in/)
Overview of Winding up :
Voluntary winding up which may be:
i) Member’s Voluntary winding up.
ii) Creditor’s Voluntary winding up.
In case of voluntary winding up, the entire process is done without court supervision. When the winding up is complete, relevant documents are filed before the court for obtaining the order of dissolution. A Voluntary winding up can be done by members or creditors. The circumstances in which company may be wound up voluntarily are:
a) When the period fixed for the duration of the company in its articles has expired
b) When an event on the happening of which the company is to be dissolved as per its articles happen.
c) The company resolves by special resolution at any general meeting to be voluntary winding up.