Ministry 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 manner.
There are two main conditions for which should be satisfied to apply for closure of company through FTE mode-
1. The company applying under FTE should not have any asset and liability.
2. The company should not have commenced any business activity or operation since incorporation or at least one year must has been passed since last business activity or operation.
COMPANIES OUT OF THE PURVIEW OF FTE MODE
1. Listed companies and companies that have been de-listed due to non-compliance of Listing Agreement or any other statutory Laws
2. Companies registered under section 25 of the CA, 1956
3. Vanishing Companies
4. Companies which are subject to investigation or inspection
5. Companies against which prosecutions are pending in the court
6. Companies which have accepted public deposits which are either outstanding or the company is in default in repayment of the same
7. Company having secured loan
8. Company having management dispute
9. Company in respect of which filing of documents have been stayed by any competent authority
10. Company having dues towards taxes or banks and financial institutions or any other authority.
Company desirous to apply through FTE mode has to electronically file form FTE along with the prescribed documents to the roc. The fees for filling form FTE is 5000/- and it should be signed electronically by the director/manager of the company.
If Form FTE is not being digitally signed by director /Manager/ Secretary, a physical copy of the Form duly filled in, shall be signed manually by a director authorized by the Board of Directors of the company and shall be attached with the application Form at the time of its filing electronically.
On receipt of application registrar shall give a notice under Section 560(3) 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. The Registrar shall put the name of applicant and date of making the application on the MCA portal www.mca.gov.in, giving thirty days time for raising objection, if any, by the stakeholders to the concerned Registrar.
The Registrar shall also inform Income Tax Department about companies availing FTE mode and ask for objections within thirty days. RBI, SEBI, etc have to be notified in case of Non-Banking Financial Company and Collective Investment Management Company.
The Registrar after expiry of such time mentioned above shall strike its name off the Register and shall send notice under section 560(5) of the CA, 1956 for publication in the Official Gazette and the applicant company shall stand dissolved from the date of publication of the notice in the Official Gazette.