FTE - A FAST TRACK EXIT MODE FOR COMPANIES

INTRODUCTION

Fast Track Exit (FTE) is a simplified procedure for the registered Companies for easy dissolution rather than undergoing the tedious and year long process of Winding Up. Winding up affairs in India is comparatively more time consuming and takes almost a life time for the Companies to get dissolved. In view of this, the Ministry of Corporate Affairs (MCA) introduced Fast Track Exit (FTE) Mode in the year 2011 for Defunct Companies under Section 560 of Companies Act, 1956. Thus, for at least the Defunct Companies the scheme is boon.

MAIN HIGHLIGHTS OF THE SCHEME

• The Company making Application under FTE should have Nil Assets and Liabilities. 
• The Company should not carry on any Activity or Business since Incorporation or should not be carrying out any Business Activity for the last one year before making an Application under FTE.
• A Company whose status on MCA Portal is Active or is identified as Dormant may apply for FTE.
• The Promoters of Defunct Companies by opting for easy Liquidation will save on effort and cost towards Annual Compliance.

WHO CANNOT AVAIL?

FTE is not applicable to the following Companies:

• Listed Companies
• Companies that have been de-listed
• Section 25 Companies
• Vanishing Companies
• Companies under Investigation/Inspection pending in any Court
• Companies where order u/s 234 has been issued and the reply/prosecution is pending
• Companies against which prosecution for a Non-Compoundable offence is pending in Court
• Company in respect of which filing of documents have been stayed by Court or CLB or Central Government or any other competent authority
• Companies with outstanding Public deposits or secured loans
• Companies in a Management Dispute
• Companies owing dues to Income Tax, Sales Tax, Central Excise, Banks and Financial Institutions or Central Government or State Government or any Local Authority

PROCEDURE

- Make an Application in the Form FTE available on MCA Portal, along with a filing fees of Rs. 5000/-

- Form FTE to be accompanied by:

1. Affidavit from each existing Director
2. Indemnity Bond from individual Director or collectively duly notarized
3. Statements of Accounts duly certified by the Statutory Auditor or a CA in whole time practice
4. Board Resolution showing authorization given to the Directors for filing the form with the ROC

Along with these documents, Form FTE is to be filed. The  Registrar of Companies on receipt of application, shall examine the same and if found in order, shall give Notice to the Company giving 30 days time, stating that unless cause is shown to the contrary, its name be struck off from the Register and the Company will be dissolved.

NEWS WRAP - SEPTEMBER 10, 2013

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Source: Economic Times.

EXTERNAL COMMERCIAL BORROWING (ECB) FROM THE FOREIGN EQUITY HOLDER

ISSUING AUTHORITY : RESERVE BANK OF INDIA

DATE OF ISSUE : 04/09/2013

EFFECTIVE DATE : IMMEDIATE EFFECT

CIRCULAR NO. 31

It has been decided to permit eligible borrowers to avail of ECB under the approval route from their foreign equity holder company with minimum average maturity of 7 years for general corporate purposes.

Till now borrowings in the form of ECB were not permitted to be utilized for general corporate purpose.

However, it includes certain conditions:

• Minimum paid up equity of 25% should be held directly by the Lender.

• Such ECBs would not be used for any purpose not permitted under extant the ECB Guidelines (including on-lending to their group companies/step down subsidiaries in India).

• Repayment of the Principal shall commence only after completion of minimum average maturity of 7 years. No prepayment will be allowed before maturity.

All other aspects of extant ECB guidelines shall remain unchanged.

For detailed circular, please follow the Link below:
A.P. (DIR Series) Circular No.31

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Source: Economic Times

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• Tata Sons appoints Havard Business School Dean - Nitin Nohria as Non-Executive Director.

• Sahara Group ties up with Dainik Bhaskar for Q Shop Retail Chain in Delhi through Super Bazar outlets.

• Reliance Communications appoints Deepak Khanna as CEO for local enterprise business.

• ONGC's $ 200 million order to L&T-Pipavav Shipyard valid: Bombay High Court.

Source: Economic Times

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• Private Equity Fund 'Quadria Capital' eyes $300 million for healthcare fund.

• Rupee's downslide: Reliance Communications to pass the increased input costs to customers.

• ICICI Bank launches 'branch on wheels'.

• Samsung to launch 2 ultra-high definition TVs in India this month.

Source: Economic Times

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• FMCG Companies like Asian Paints, Pidilite, Emami, take legal route for Trademark Infringement.

Source: Economic Times

NEWS WRAP - SEPTEMBER 04, 2013

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• V Balakrishnan to rise in Infosys: Elevation as CEO near certain if SD Shibulal decides to give up post.

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Source: Economic Times

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Source: Economic Times

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• Vikram Bakshi to move to CLB to seek reinstatement as Managing Director of JV with McDonald's.

• Customer complaints rise against Life Insurers by over 10%.

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Source: Economic Times