Closure of Company
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The reasons could be economic recession, lack of funds, better opportunities elsewhere, major loss, labour conflict, management dispute etc.
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Yes, The Company which has not commenced any business activity or operation since incorporation or from past one year there has been no transaction or business activity and there is no future expected activity, such companies should be closed down.
Yes, any company, which has not filed its statutory documents i.e. Balance Sheet and Annual Return for any of the financial year 2006-07, 2007-08, 2008-09 and 2009-10, has been identified as defaulting company. Directors of such companies are debarred from filing any document till they make the default good. Such defaulting companies can apply under FTE (Fast Track Exit).
The guidelines does not inter-alia cover the listed companies, companies that have been de-listed due to non-compliance of listing agreement or any other statutory Laws, section 8 companies, vanishing companies, companies under inspection/investigation, companies against which prosecution for a non-compoundable offence is pending in court, companies having outstanding public deposits or secured loan or dues towards banks and financial institutions or any other Government Departments etc. or having management dispute or company in respect of which filing of documents have been stayed by court or CLB or Central Government or any other competent authority.
If the pending prosecutions are only for non-filing of Annual Returns under section 159 and Balance Sheet under section 220 of the Act, such application may be accepted provided the applicants have already filed the compounding application. However, steps for final strike of the name of the company will be taken only after disposal of compounding application by the competent authority.
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