Fast track Exit Scheme under the Companies Act, 2013
By Team Legistify / 2016-05-04
One of the quick ways to shut down a company, when non-operational over a period of time, was through a process called Fast Track Exit (FTE). In its place, the Companies Act, 2013 has brought in a process called Removal of Names of Companies from Register (Section 248 of Companies Act, 2013), with effect from 26 December 2016.

Have a Legal Issue?

Get connected to the Best Lawyers and Chartered Accountants Near You!


On 26 December 2016, Ministry of Coporate Affairs (MCA) issued a Notification notifying Section 248, 249, 250, 251 and 252 of Companies Act, 2013 (Chapter XVIII). This chapter deals with Removal of Names of Companies from Register of Companies.Under the fast track exit scheme, the Companies can apply for closure. A company can apply for a shut down under the new process when :

  • A company has failed to commence any business within one year of incorporation,
  • The subscribers to MOA have not paid the subscription amount within 180 days and no declaration filed to this effect,
  • Not carrying any business or operation for a period of two years (earlier it was one year) and has not sought to call itself a dormant company,
  • When a company voluntarily wants to shut down, it can, after clearing all its liabilities, by obtaining consent of at least 75% of shareholders in terms of paid-up capital.

Who can apply for closure?

As per section 560 of the Companies Act’1956, Any defunct company desirous to strike off its name from the register of Registrar of company can apply in Form FTE for strike off its name from the register maintained by ROC as per Guidelines for ‘FAST TRACK EXIT MODE’

What is a defunct Company?

One of the quick ways to shut down a company, when non-operational over a period of time, was through a process called Fast Track Exit (FTE). In its place, the Companies Act, 2013 has brought in a process called Removal of Names of Companies from Register (Section 248 of Companies Act, 2013), with effect from 26 December 2016.

Have a Legal Issue?

Get connected to the Best Lawyers and Chartered Accountants Near You!


Related Posts

Read Our Blogs on Similar Topics