Which Companies can apply for strike off under FTE?

Author
By Sakshi Shah on February 18, 2019

Companies have an option to strike off their name from the register of ROC in a quick and easy way under the FTE (Fast Track Exit) Scheme.

What is FTE or Fast Track Exit Mode Scheme under Companies Act, 2013?

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

Which Companies cannot apply for strike off under FTE ?

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

FAQs

1. Can a Company against which there are pending litigations apply for strike off under FTE (Fast Track Exit Mode)?

The company against which there are pending litigations can apply for strike off under the Fast Track Exit Mode. However, the company must disclose the pending litigations in Form STK-2