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
non-compoundable 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 Rs. 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 along with 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.
2. Procedure
to be adopted by Registrar of Companies in this matter:-
(a) The Registrar of Companies, on receipt of
the application, shall examine the same and if found in order, shall give a
notice to the company under section 560(3) of the Companies Act, 1956 by e-mail
on its e-mail address intimated in the Form, 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;
(b) The Registrar of companies shall put the
name of applicant(s) and date of making the application(s) under fast track
exit mode, on daily basis, on the MCA portal www.mca.gov.in, giving thirty days
time for raising objection, if any, by the stakeholders to the concerned
Registrar;
(c) In case of company(s) like Non-Banking
Financial Company(s), Collective Investment Management Company(s) which are
regulated by other Regulator(s) namely RBI, SEBI, the Registrar of Companies,
at the end of every week, shall send intimation of such companies availing fast
track exit mode during that period to the concerned Regulator(s) and also an
intimation in respect of all companies availing fast track exit mode during
that period to the office of the Income Tax Department giving thirty days time
for their objection, if any;
Explanation (1)
"Non-Banking Financial Company" means a company as defined under
clause (f) of section 45-I of the Reserve Bank of India Act, 1934
(2) "Collective
Investment Management Company" means the company as defined in clause (h)
of sub-regulation 2 of Securities and Exchange Board of India (Collective
Investment Companies) Regulations, 1999
(d) The Registrar of Companies immediately after
passing of time given in sub-paras (a) to (c) of this Para and on
being satisfied that the case is otherwise in order, shall strike its name off
the Register and shall send notice under sub-section (5) of section 560 of the
Companies Act, 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.
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ANNEXURE-A
AFFIDAVIT (to be given individually by every
director)
1. I/, Director of
………………………………………………………………. , (hereinafter called " the Company"),
incorporated on ………./…………/ ………… under the Companies Act, 1956 having its
Registered Office at ……………… and having CIN No ……………. Do solemnly affirm and
state as under:
2. I/ ………….. , S/o/ D/o Shri/ Smt. ……………..
, holder of DIN /Income Tax PAN /Passport number: ………………. (copy of Income Tax
PAN /Passport duly attested by a Gazetted Officer or a whole time practising
professional (Chartered Accountant/ Company Secretary/Cost Accountant) or a
Company Secretary in full time employment of the company is enclosed) am
Director of the company stated above since ……………… (mention date of
appointment).
3. My present residential address is
………………………………… (Copy of documentary evidence duly attested by a Gazetted Officer
or a whole time practising professional (Chartered Accountant/ Company
Secretary/Cost Accountant) or a Company Secretary in full time employment of
the company is enclosed. Alternatively, an affidavit sworn before Magistrate
may be enclosed)
4. My permanent address is ………………………………………
(Copy of documentary evidence duly attested by a Gazetted Officer or a whole
time practising professional (Chartered Accountant/ Company Secretary/Cost
Accountant) or a Company Secretary in full time employment of the company is
enclosed. Alternatively, an affidavit sworn before Magistrate may be enclosed)
5. The company does not maintain any bank
account as on date.
6. I affirm that the Company ………………….
(mention name of the company) do not have any assets and liabilities as on
date.
7. The
Company has been inoperative from the date of its incorporation / The company
commenced business/operations/commercial activity after incorporation but has
been inoperative for the past ……………………….. year(s) due to following reasons*.
……………………………..
(Give the reasons here)
8. As on date, the Company does not have
any dues towards Income Tax / Sales Tax / Central Excise/ Banks and Financial
Institutions; any other Central or State Government Departments/Authorities or
any Local Authorities.
9. Strike out whichever is not applicable:-
(i) There is no litigation pending against
or involving the company.
(ii) There are litigations pending against the
company, details of which are mentioned under serial number 9 of Form FTE.
10. In case of any loss(es) to any person or any valid
claim and liability arising from any person after the striking off the name of
the Company ………………. (mention name) from the Register of Companies, I, the
director of the company, undertake to indemnify any person for such losses,
valid claim and liability and the indemnity bond to this effect is being
submitted separately with the application Form.
I solemnly state that the contents of this
affidavit are true to the best of my knowledge and belief and that it conceals
nothing and that no part of it is false.
Signature: ……………………….
(Deponent)
Verification:-
I verify that the contents of this affidavit are
true to the best of my knowledge and belief.
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Place : ……………………….
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Signature : ………………………
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(Deponent)
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Date: ……………………..
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ANNEXURE-B
INDEMNITY BOND
(to be given individually or collectively by every
director)
To
The Registrar of Companies,
1. I/ We, the director (s) of
……………………………….. (mention name of the company), incorporated on …………/…………./
……………. under the Companies Act, 1956, having its Registered Office at
………………………………………….. do hereby declare that:
2. I/ We …………………… , S/o D/o Shri/Smt.
………………………… am/are Director (s) of this company.
3. That I/We have made an affidavit dated
the …………………. , duly sworn before First Class Judicial Magistrate or Executive
Magistrate or Oath Commissioner or Notary, affirming that the Company
…………………….. Private/ Limited have nil assets and liabilities as on date.
4. Further, the Company has been
inoperative from the date of its incorporation. / The company commenced
business/operations/commercial activity after incorporation but has been
inoperative for the past …………………….. year(s)*. And the company is not intending
to do any business or commercial activity. Thus the Company is defunct and I
request the Registrar of Companies, ………………….. to strike off the name of the Company
from the Register of Companies under Section 560 of the Companies Act, 1956.
*Strike out whichever is
not applicable.
5. I /We do hereby undertake and indemnify
in writing:
(a) pay and settle all lawful claims arising in
future after the striking off the name of the Company.
(b) to indemnify any person for any losses that
may arise pursuant to striking off the name of the Company.
(c) to settle all lawful claims and liabilities
which have not come to our notice up to this stage, even after the name of the
Company has been struck off in terms of section 560 of the Companies Act, 1956.
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Place:
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(Name, Father's name, Address & Signature)
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Date:
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(To be given by every director)
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WITNESSES:
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1.
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Signature:
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Name:
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Father's name:
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Address:
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Occupation:
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2.
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Signature:
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Name:
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Father's
name:
Address:
Occupation:
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Annexure -C
Statement of Account
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Name of the Company:
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CIN No.
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Statement of Account as on date: :
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Particulars : (Brief break up in respect of each
item needs to be given).
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I. Sources of Funds
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(1) Capital
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(2) Reserves & Surplus (including balance in
Profit and Loss Account)
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(3) Loan Funds
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Secured loans from Financial Institutions
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Secured loans from Banks
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Secured loans from Govt.
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Others Secured loans
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Debentures
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Unsecured Loans
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Deposits & interest thereon
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Total Loan Funds
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Total of (1) to (3)
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II. Application of Funds
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(1) Fixed Assets
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(2) Investments
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(3) (i) Current Assets, loans and Advances
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Less : (ii) Current Liabilities &
provisions
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Creditors
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Unpaid Dividend
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Payables
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Others
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Total Current Liabilities & provisions
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Net Current assets (i –ii)
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(4) Miscellaneous expenditure to the extent not
written off or adjusted
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(5) Profit & Loss Account (Debit balance)
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Total of 1 to 5
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Name and
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Date :
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Signature
of
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Place:
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(Managing
Director)*
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Name and
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Name and
Signature of
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Signature
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(Directors)
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(Secretary)*
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*Applicable
only if there is MD/Secretary
Duly certified by Statutory Auditor or Chartered
Accountant in whole time practice.
Membership No./Certificate of Practice Number with
seal
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