There are various organizations, which are registered under the Companies Act, 1956, yet because of different reasons they are inoperative since incorporation or commenced business but became inoperative or defunct later on. Such companies might be desirous of getting their names struck off from the Register of Companies kept up by Registrar of Companies.
According to Section 560 of the Companies Act, 1956, (where Section 248 of the Companies Act 2013 is not yet implemented, hence Section 560 is prevailing). Registrar of Companies may strike off the name of companies on fulfilling the conditions in that. According to present practice, an company envious of getting its name struck off, needs to apply to Registrar of Companies in e-form 61. All pending statutory returns are required to be filed with e-form 61. However under the new scheme i.e. Fast track exit (FTE) mode, there are no filings to be done, an application in Form FTE must be made independent of all pending statutory returns “Fast Track Exit mode” by MCA:
Fast Track Exit (FTE) Scheme:
MCA has issued Guidelines for “Fast Track Exit (FTE) Mode” to give opportunity to the defunct companies to get their names struck off from the register under Section 560 of the Companies Act, 1956 in time bound way.
Salient Features of FTE Guidelines:
FTE Guidelines are relevant to an defunct company. For the reasons for the FTE Guidelines, any organization will be called as “defunct company “, which has nil resource and obligation and
- Has not started any business action or operation since incorporation; or
- Is not carrying over any business movement or operation for most last 1 year before making application under FTE.
Any defunct company which has dynamic status or recognized as dormant by the MCA may apply for getting its name struck off from the ROC.
Procedure to closure of Company under FTE:
- Make the application in form FTE which is accessible on MCA Portal. Charges require for this Form is Rs.5000/-.
- For striking the name of the company under section 560 of the company act 1956, the following documents are required:
- Annexure-A – Affidavit required to give individually by every director.
- Annexure –B – Indemnity Bond to give individually or all things considered by each director.
- Annexure –C – Statement of accounts duly certified by statutory auditors.
- Annexure – D – Board Resolution from the Board of Directors.
- The Registrar of Companies, on receipt of the application, should look at the same and if found all together, might give a notification to the company under section 560(3) of the Companies Act, 1956 by email on its email address intimated in the Form, giving 30 days time, expressing that unless cause is appeared unexpectedly, its name be struck off from the Register and the company will be dissolved.
- The Registrar of companies should put the name of applicant(s) and date of making the application(s) under Fast track exit mode, on regular basis, on the MCA portal giving 30 days time for raising complaint, assuming any, by the partners to the concerned Registrar;
- In the event of company(s) like Non-Banking Financial Company(s), Collective Investment Management Company(s) which are directed by different Regulator(s) to be specific RBI, SEBI, the Registrar of Companies, toward the end of every week, should send insinuation of such organizations benefiting fast track exit mode amid that period to the concerned Regulator(s) furthermore a suggestion in respect of all companies availing fast track exit mode during that period to the office of the Income Tax Department giving 30 days time for their objection, if any;
- The Registrar of Companies immediately after passing of time given in sub-paras (a) to (c) of this Para and on being fulfilled that the case is otherwise in order, should strike its name off the Register and might send notice under sub-section (5) of segment 560 of the Companies Act, 1956 for publication in the Official Gazette and the applicant company should stand dissolved from the date of publication of the notification in the Official Gazette.
The Registrar of Companies will take their time to approve Form FTE. It may take a month or more than a month, and once it is approved the company name will be struck off from the registrars. A certificate confirming the closure of the company will be issued by the Registrar of Companies.