Companies wanting to get their names struck off can now relax. The defunct companies have been given an easy and convenient exit scheme called ‘Fast Track Exit Mode’. Section 560 of the Companies Act, 1956 empowers the Registrar of Companies (ROC) to strike-off the names of the companies which have ceased to be operational. The companies may also suo motu apply to the ROC to get their names struck-off, by filing an online application in the prescribed Form 61.
The new Fast Track Exit Mode is in force from 3rd July 2011, as per General Circular No. 36/2011 dated 7th June, 2011 of Ministry of Corporate Affairs. Under the fast track scheme, a defunct entity is required to file Form FTE with affidavits, indemnity bonds and statement of accounts duly executed or certified by the Directors of the Company in the prescribed format. A fee of Rs. 5000/- will be payable for using this fast track route.
The ROC, after verification, will strike off the name of the company from its register after serving a notice under Section 560 of the Companies Act, 1956 within one month. The applicant company shall stand dissolved from the date of publication of the notice by the ROC in the Official Gazette.
The Fast Track Exit Mode is not applicable to certain companies. Listed companies, Section 25 companies, companies against which prosecution is pending in the court and companies for which investigation or inspection has been ordered, will not be covered. Companies having outstanding deposits or secured loans, companies having any management dispute and companies having statutory dues, are also ineligible for availing the benefit.