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What is the process for strike off of a company under FTE i.e Fast Track Exit Mode?

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Sakshi Shah

Form STK-2
FTE
MCA
Start & Run Business
Winding Up

The Ministry of Corporate Affairs (MCA) has introduced the Fast Track Exit (FTE) scheme to strike off the name of a company from the Register of Companies. FTE i.e. Fast Track Exit Mode is the fastest way to strike off the name of a non-operative company from the register of companies under the Companies Act 2013.

What is FTE or Fast Track Exit Mode Scheme under Companies Act, 2013?
The companies which are no longer functioning, are given an opportunity to get names removed from the registered list.
Read More
What is FTE or Fast Track Exit Mode Scheme under Companies Act, 2013?
The companies which are no longer functioning, are given an opportunity to get names removed from the registered list.
Read More

Process for filing an application under FTE is as follows:

  1. Companies who can apply for strike off under FTE

    The eligible company can make an application if it falls under any of the specified conditions.

  2. The company can apply for strike off by filing Form STK-2 electronically on the MCA Portal

    Fill in the information in Form STK-2. Read to know about which information needs to be filled in Form STK-2 for strike off under FTE

  3. A director authorised by the board must sign Form STK-2 with a digital signature

    It also must be certified by a Chartered Accountant or Cost Accountant or Company Secretary in whole time practice.

  4. The company must attach various documents duly signed by the directors

    And the documents should be duly attested by a professional to Form STK-2. Here is an article to help you with the list of documents to be attached with Form STK-2.

  5. The company must pay a ROC Fees of Rs.5000 on filing Form STK-2

    The registrar of companies would undertake the following actions:
    1. The registrar shall examine the application. If the application is valid, he shall send a notice to the registered email of the Company. The notice would mention that the name of the company would be struck off from the register of companies. The Company has a time limit of 30 days for raising an objection.
    2. The registrar shall then list the name of the applicant company and the date of making the application under FTE on the MCA Portal. The stakeholders can raise an objection within a period of 30 days.
    3. The registrar shall also intimate the regulating authorities of Income Tax, VAT, GST, Excise, Service Tax etc. The concerned authorities can raise an objection within a period of 30 days.

  6. If the registrar does not receive any of the above objections, he would strike off the name of the company from the register

    He will also issue a notice for publication in the Official Gazette.

  7. The Company would be DISSOLVED

    From the date of publication in the Official Gazette.

FAQs

What are the liabilities of directors of the company after the company is struck off from the register of MCA?

1. To pay off the losses that may arise to a person after striking off the name of the company
2. To pay all the liabilities and lawful claims that may arise after striking off the name of the company

What shall the company do if an objection is raised for striking off its name from the register of MCA?

When a company applies for strike off under FTE, any of the stakeholders or concerned authority like Income Tax, Excise, SEBI, RBI or any other government department can raise an objection.
The company can reply to the objections raised. If the objecting party is satisfied with the reply, the ROC would strike off the name of the company. There is no specified time limit for submitting reply against an objection.

Got Questions? Ask Away!

  1. Hey @Sofiyah_Valiante ,

    Following companies can apply for strike off under FTE:

    1. A company that has not commenced any business for one year from its date of incorporation. OR
    2. A company that has not carried any business activity for a period of two immediately preceding financial years and has not made any application to attain the status of a dormant company under Sec 455 of the Companies Act 2013

    The following companies cannot apply for strike off under FTE:

    1. Listed companies
    2. Vanishing companies
    3. Companies registered under Section 25 or Section 8 of the Companies Act 2013
    4. De-listed companies due to non-compliance of listing agreement or any other statutory laws
    5. Companies where investigation or inspection has been ordered but prosecutions are pending in court
    6. Companies where prosecution for an offence is pending in court
    7. A Company having an outstanding loan secured or unsecured
    8. A Company having management dispute
    9. Companies accepted deposits which are outstanding or default in repayment
    10. Companies whose application for compounding is pending before the competent authority. It may be for compounding the offences committed by the company or any of its officers in default
    11. The Company for which filing of documents have been stayed by court or Company Law Board (CLB) or Central Government or any other competent authority;
    12. Company with pending dues of income tax or sales tax or central excise or banks and financial institutions or government departments or local authorities
    13. Companies, where notice u/s 234, 206 or 207 of the Companies Act, 1956 has been issued by ROC and reply is pending
    14. If at any time in the previous 3 months the company:
    • Has changed its name or shifted its registered office from one state to another
    • Has made a disposal for value of property or rights held by it immediately before carrying on business for earning a profit in the normal course of trading
    • It has made an application to the Tribunal for sanctioning of a compromise or arrangement and the matter has not been finally concluded
    • It has engaged in an activity other than the one which is necessary for the purpose of making an application under that section, or deciding whether to do so or concluding the affairs of the company or complying with any statutory requirement
    • Is being wound up under Chapter XX of this act or under the Insolvency and Bankruptcy Code, 2016

    Hope I have resolved your query!