Fast Track Exit Mode

Fast Track exit mode is one of the methods through which a company can be dissolved without following the lengthy process of winding up. It is an easy way to close those companies that are not having any assets or liabilities explained by Edge Legal.

It requires a lot of time to register a company but at the same time, there are a number of companies that registered under the Companies Act but because of various reasons they want to exit the business or have become inoperative or started off the business but later became defunct; for all such and many other companies who are closing down their business, the Ministry of Corporate Affairs introduced the method of Fast track Exit which can now simplify the exit work for companies.

Fast Track Exit Mode details:

As per Section 248 of the Companies Act 2013, the Registration of Companies may strike off the name of the company once it fulfills all the conditions mentioned in the section. The current procedure for getting the name of the company struck off from the list requires an application to be sent to the Registrar of the Companies along with a filing fee of Rs. 5000. The following documents should be attached along with FTE:

  1. Affidavit by each director of the company
  2. Indemnity Bond by directors, this can be done individually or collectively
  3. Statement of Accounts (not old than one month preceding the date of filing of application)
  4. Special Resolution by the company
  5. Statement regarding pending Litigation

This act came into effect on 3rd July 2011 and since then it has helped many companies seamlessly follow the exit policy.