Scheme for Fast Track Exit Mode

Organisations sometimes show no business activity or operation for a year or more of their establishment. At such times they choose to strike their name off from the official records of the Ministry of Corporate Affairs (MCA). If you’re an MSME who wishes to do the same, the Fast Track Exit Mode scheme introduced by the MCA can benefit you.

Overview:

The Fast Track Exit Mode Scheme by the MCA enables an MSME to close down their non-operational business at a cheaper cost with fewer formalities under Section 560.

Benefits:

How does an institution benefit from this scheme?

An institution can:

  • Avail loans to close down its non-operational business at an affordable price
  • Gain assistance from the government to:

– Build intermediary institutions

– Manufacture new products

– Identify target markets

– Meet its training needs

  • Gain assistance from the government in the fields of:

-Technology

-Marketing

Features:

What are the features of this scheme?

  1. Arranging fixed deposits for MFIs/NGOs

The Government of India provides funds to SIDBI. These funds are used for the security deposit requirement of loan for MFIs/NGOs. SIDBI takes 10% as security deposit, out of which MFIs/NGOs get 2.5% (25% security deposit). The institutions can avail further loans on the basis of security deposit.

  1. Training and Studies on Micro-Finance Program

The Government of India would help SIDBI in meeting the training needs of NGOs, Self Help Groups, intermediaries and entrepreneurs and also in enhancing awareness about the program. This would be performed with the help of various developmental institutes.

  1. Assistance in building conciliatory institutions

The government of India will help in building intermediary institutions for MFIs that will help them with building new products, identifying target markets, and providing technical and marketing assistance.

Eligibility Criteria:

What is the eligibility criteria for this scheme?

An MSME is eligible for this scheme if it falls under the following categories:

  • The company is not operating or is not carrying any business since the last one year from the date of application
  • Company is not operating or not carrying out any business since its incorporation
  • The company has no assets and liabilities
  • The company’s status should be ‘active’ or ‘dormant’ on the MCA portal

What makes an MSME ineligible for this scheme?

An MSME is ineligible for this scheme if it falls under the following categories:

  • Listed companies
  • De-listed companies due to non-compliance of Listing Agreement or any other statutory laws
  • Companies under Section 25
  • Vanishing companies
  • The companies against which an investigation or inspection has been ordered and yet to be taken up or pending
  • Companies where order u/s 234 has been issued by ROC and reply is pending
  • The companies where prosecution for a non-compoundable offence is pending in court
  • Companies which have accepted deposits which are outstanding or have defaulted in repayment
  • The companies having secured loan
  • Companies having management dispute
  • The companies for which filing of docs have been stayed by court or CLB or CG or any other competent authority
  • Companies having dues of income tax / sales tax / central excise / banks / financial institutions / CG / SG / other local authorities
  • The companies not having active / dormant status on MCA portal

Application:

How can an MSME apply for this scheme?

If your company is eligible to apply for this scheme, you will need to file the Form FTE with the Registrar of Companies (ROC).

The form must be filed online for a fee of ₹5,000, here.

Documents Required:

The documents required to apply for this scheme are:

  • Statement of accounts (duly signed by one MD / director / secretary and certified by auditor of the company or any other chartered accountant)
  • Copy of board resolution authorizing directors to file application
  • Indemnity bond duly notarized and signed by all directors
  • Affidavit duly notarized and signed by all directors (separately)
  • Physical Copy of e-form FTE duly signed by director / MD / manager / secretary if no DSC is available
  • Attested copy of PAN / passport (in case DIN is not available)
  • NOC from government (if applicable)
  • Any other optional attachment

For further details about this scheme, click here

EASY EXIT FILING SCHEME (EES)

Closing down a company is complex. Several formalities need to be taken care of before the venture’s name is officially struck off the Registrar of companies. The Easy Exit Filing Scheme provides companies with the assistance to combat such situations.

Overview:

The Easy Exit Filing Scheme makes easy and hassle-free work of closing down of a company. It also provides assistance in filing an application for loans, providing security or guarantee, etc.

Benefits:

What benefits does this scheme provide?

This scheme provides the following benefits:

  1. Hassle-free closing down process
  2. Easy application of loans
  3. More security/guarantee

Eligibility Criteria:

Who is eligible to apply for this scheme?

Any defunct company which has an ‘active’ status on the ministry’s portal is eligible to apply for this scheme.

Exclusions:

The companies that classify as exclusions to applying for the scheme are as follows:

  1. Companies who are carrying out business activity/operation on or after April 1, 2008
  2. Defunct company whose status is non-active on the MCA portal
  3. Listed companies
  4. Companies registered under Section 25
  5. Vanishing companies
  6. Companies against which an investigation or inspection has been ordered and yet to be taken up or pending
  7. The companies where order u/s 234 has been issued by ROC and reply is pending
  8. Companies where prosecution for a non-compoundable offence is pending in court
  9. The companies which have accepted deposits which are outstanding or have defaulted in repayment
  10. Companies having secured loan
  11. The companies having management dispute
  12. Companies for which filing of docs have been stayed by court or CLB or CG or any other competent authority
  13. The companies having dues of income tax / sales tax / central excise / banks / financial institutions / CG / SG / other local authorities

Application:

How can a firm apply for this scheme?

  1. A firm can apply for this scheme by clicking here
  2. The applicant is required to fill the form in the prescribed format along with the prescribed fee of ₹3,000
  3. Company should pass a board resolution for applying under Scheme and authorizing the signing director to file the application

Documents Required:

What are the documents required to apply for this scheme?

The documents required to apply for this scheme are:

  1. A certificate that states the Company is ‘true and correct’ is required by a Chartered Accountant or Company Secretary in practice
  2. The Director identification number or PAN number or Passport number attested by a Chartered Accountant or Company Secretary
  3. The application form digitally signed by the Director of the Company
  4. The position of balance sheet as on any date within 1 month preceding the date of filing of the application certified by the Chartered Accountant or Company Secretary. It has to be submitted separately, as Annexure “C”
  5. Affidavit in Annexure “A”

The affidavit needs the following attachments:

  • Copy of residential address proof (permanent/ present) attested by a Chartered Accountant/ Company Secretary or alternatively an affidavit sworn before a Magistrate
  • Statement of assets and liabilities
  1. Indemnity Bond as per Annexure ‘B’
  2. Statement of Accounts as per Annexure ‘C’

For more information on this scheme kindly click here