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Fast Track Exit Mode for Defunct Companies

The Ministry of Corporate Affairs launched Fast Track Exit Mode on 03.07.2011 to provide an opportunity for defunct companies under Section 560 of the Companies Act, 1956 for getting their names struck off from the register of companies, to facilitate the exit of such defunct companies without getting into the process of winding up. Giving this information in written reply to a question in the Lok Sabha, Shri Sachin Pilot, Minister of Corporate Affairs, said that the Companies Bill 2013 recently passed by both houses of Parliament has a provision (Clause 455) which introduces a new concept of ˜dormant companies™.  Such companies which do not have significant accounting transactions are permitted to obtain the status of a ˜dormant company™.

The number of defunct companies during last three years and companies who have so far availed Fast Track Exit Mode are tabulated as under:

Year

Number of Defunct Companies

31.12.2010

1,75,804

31.12.2011

2,20,906

31.12.2012

2,35,485

 

Year

Number of Companies (availed FTE Mode for striking off their names)

31.12.2011

2752

31.12.2012

7611

31.07.2013

8830

 

Tags: Corporate Affairs MinistryDormant companyLok SabhaMinister of Corporate AffairsRajya SabhaSachin PilotShri Sachin PilotThe Companies Act 1956

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eMinds Legal is a Corporate Law Firm based in Gurgaon, India specializing in Corporate Legal, Corporate Secretarial and Compliance. The Firm comprises of a team of Corporate Lawyers and Company Secretaries with in-depth subject matter knowledge and participative industry experience of over 15 years.

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