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Ankur Roy (MBA) (24 Points)

21 January 2014

Dear Friends,

Could any one plese guide me with Fast Track Exit Process and procedure.

Thank you,

Ankur

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2 Replies

Studentsca (CA Practice ) (3577 Points)
Replied 21 January 2014

Any company registered under the Companies Act, 1956 which satisfies the
following conditions can apply under the Fast Track Exit mode:-

• A Company having Nil assets & liability and
• has not commenced any business activity or operation since incorporation;
or is not carrying over any business activity or operation for last one year
before making application under FTE.

AND

B. Status on MCA portal
• The status of the Company is “active” or identified as the “dormant” by the
Ministry of Corporate Affairs

Studentsca (CA Practice ) (3577 Points)
Replied 21 January 2014

Guidelines for Fast Track Exit mode for defunct companies under
section 560 of the Companies Act, 1956
1. For Fast Track Exit mode (FTE), it is stated as under:-
(a) Any company will be called as “defunct company” for the purpose
of these guidelines, which has nil asset and liability and
(i) has not commenced any business activity or operation
since incorporation; or
(ii) is not carrying over any business activity or operation for
last one year before making application under FTE.
(b) Any defunct company which has active status or identified as
dormant by the Ministry of Corporate Affairs, may apply for
getting its name strike off from the Register of Companies;
(c) Any defunct company which is a Government Company shall
submit ‘No Objection Certificate’ issued by the concerned
Administrative Ministry or Department or State Government along
with the application;
(d) the decision of the Registrar of Companies in respect of striking
off the name of company shall be final.
(e) The fast track exit mode is not being extended to the following
companies namely:-
(i) listed companies;
(ii) companies that have been de-listed due to non-compliance
of Listing Agreement or any other statutory Laws,
(iii) companies registered under section 25 of the Companies
Act, 1956;
(iv) vanishing companies;
(v) companies where inspection or investigation is ordered and
being carried out or yet to be taken up or where completed
prosecutions arising out of such inspection or investigation
are pending in the court;
(vi) companies where order under section 234 of the Companies
Act, 1956 has been issued by the Registrar and reply thereto
is pending or where prosecution if any, is pending in the
court;
(vii) companies against which prosecution for a noncompoundable
offence is pending in court;
(viii) companies accepted public deposits which are either
outstanding or the company is in default in repayment of the
same;
(ix) company having secured loan ;
(x) company having management dispute;
(xi) company in respect of which filing of documents have been
stayed by court or Company Law Board (CLB) or Central
Government or any other competent authority;
(xii) company having dues towards income tax or sales tax or
central excise or banks and financial institutions or any other
Central Government or State Government Departments or
authorities or any local authorities.
Explanation: “vanishing company” means a company,
registered under the Companies Act, 1956 and listed with
Stock Exchange which, has failed to file its returns with
Registrar of Companies and Stock Exchange for a
consecutive period of two years, and is not maintaining its
registered office at the address notified with the Registrar of
Companies or Stock Exchange and none of its Directors are
traceable.
(f) Any defunct company desirous of getting its name strike off the
Register under Section 560 of the Companies Act, 1956 shall
make an application in the Form FTE, annexed electronically on
the Ministry of Corporate Affairs portal namely www.mca.gov.in
accompanied by filing fee of C 5,000/-;
(g) In case, the application in Form FTE, is not being digitally signed
by any of the director or Manager or Secretary, 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;
(h) In all cases, the 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;
(i) In case, the applicant name is not available in the database of
directors maintained by the Ministry, the application shall be
accompanied by certificate from a Chartered Accountant in whole
time practice or Company Secretary in whole time practice or
Cost Accountant in whole time practice alongwith their
membership number, certifying that the applicants are present
directors of the company. In such cases, the applicants shall not
be asked to file Form 32 and Form DIN 3.
(j) The company shall disclose pending litigations if any, involving
the company while applying under FTE;
(k) If the pending prosecutions are only for non-filing of Annual
Returns under section 159 and Balance Sheet under section 220
of the Companies Act, 1956, such application may be accepted
provided the applicants have already filed the compounding
application. However, steps for final strike of the name of the
company will be taken only after disposal of compounding
application by the competent authority.
(l) The Form FTE shall be accompanied by an affidavit annexed at
Annexure- A, which should be sworn by each of the existing
director(s) of the company before a First Class Judicial
Magistrate or Executive Magistrate or Oath Commissioner or
Notary, 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, as the case may be;
(m) Form FTE shall further be accompanied by an Indemnity Bond,
duly notarized, as annexed at Annexure B, 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;
(n) In case of foreign nationals and NRIs, Indemnity Bond and
Affidavit may be notarized as per their respective country’s law.
(o) The Company shall also file a Statement of Account annexed at
Annexure C, 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.
(p) In the case of 100% Government companies, if no Board is in
existence, an officer not below the rank of Deputy Secretary of
the concerned administrative Ministry may be authorized to enter
his name and other details in Form FTE and in Annexure A, B
and C in place of name and other details of the directors and also
to sign the said documents before filing