Ministry has issued Guidelines for “Fast Track Exit (FTE) Mode“ to give an 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. The said guidelines were implemented from 3rd July, 2011. If a private limited company has become inactive and there are no transactions in the company, then it is best to wind up the Company.
What is the meaning of Defunct Company?
Defunct Company means a Company registered under the Companies Act, 1956 (hereinafter referred to as “the Act”) which is not carrying over any business activity or operation:
Since incorporation or is not carrying over any business activity or operation for last one year before making application’
Companies eligible for Fast track exit mode?
Following Companies can apply under fast track exit mode for striking off its name from register of Registrar of Companies:-
a. Companies which are not operating or not carrying on any business since last one year from the date of application or,
b. Companies which are not operating or not carrying on any business since incorporation and,
c. Company having Nil assets & liability.
However, all companies which want to apply shall have ‘active’ or ‘dormant’ status on MCA portal
What are the documents required for Fast Track Exit Mode process?
Following documents are required to be attached to e-form FTE:-
Can a Company against which litigation(s) are pending can go for the fast track exit mode?
Fast track exit mode does not mention anywhere that a Company against which litigation is pending cannot apply for striking off the name of the Company from the Register maintained by the ROC. Hence, a Company against which litigation is pending can apply under fast trackmode. Further, details of pending litigations are required to be filled up in e-form FTE which has a reference in affidavit format too.
Can a Company pending income tax / sales tax / central excise / other Govt dues go for the Fast track exit mode?
No. A Company which has not paid income tax / sales tax / central excise / any other Govt dues cannot make application under fast track exit mode. Format of affidavit mentioned in the form FTE and e form FTE requires confirmation from directors that there are no dues as mentioned above are pending.
Whether NOC from Income Tax / Sales Tax / Central Excise / Other Govt authorities required for filing application with ROC?
No. NOC is not required from Income Tax / Sales Tax / Central Excise / other Govt authorities. But all directors need to confirm that there are no dues pending against Company with any such authorities. And MCA will send letter confirming that Income Tax has no objection for striking off the name of the said Company.