Guide on Fast Track Exit Scheme -company closure procedure | Venture How to Close a limited Company in India with Fast

This a part of bringing good governance in the country, Government of India is now on the way to enforce strict compliance of law on all the companies and it may impose huge additional fees and penalties which may even lead to imprisonment to officer in default which includes Directors. The Recently implemented Companies Act, 2013 has brought about a number of stringent provisions for its implementation in a legible manner. There are some situations in which directors of a company may have one of the several options to Close it down or apply for a status of a Dormant Company. Those include: Directors of the company not able to run the business in a profitable manner. Business conditions are not favorable and the company does not have many funds to sustain.  The company has suffered huge loss due to accident or natural calamity or any other reason which is neither recoverable nor sustainable.  Government support is very nominal to sustain in the industry. Though directors may have some other options such as go for the revival of the company, restructuring, infusion of funds, however, if such other options are not feasible or not available or not sufficient for revival, the last option available to the company is to CLOSE IT DOWN or Apply for a status of a Dormant Company. The Practical View of closing down or obtaining Dormant Status is given below:   CLOSING A LTD COMPANY: Under which enactment, Company may be closed? Section 560 of Companies Act, 1956 and General Circular 36/2011 (The procedure collectively called as Fast Track Exit Mode) As section under Companies Act, 2013 which prescribes the procedure to close a company is described is not yet notified, therefore, the old procedure under 1956 Act is in force. ELIGIBILITY FOR APPLYING FOR FTE MODE?   Defunct Company: Company which has  Nil assets and liabilities  Not commenced any business or activity since incorporation or Not carrying on any business operation since last one year Defaulting Company: A company which does not file the annual returns and/or annual financials for any financial year(s) PROCEDURE TO BE ADOPTED:    Close all bank accounts, Cancel all Registrations with the govt. authorities Hold a Board Meeting and get closure of company approved Get Notarized Affidavits from all directors (in Annexure A), Indemnity from all Directors (in Annexure B) and Statement of Accounts showing Assets and Liabilities

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