A Private Company is considered an artificial judicial person. To remain compliant, the company needs various crucial elements like regular tax, the appointment of an Auditor, annual return filing, etc. A company can face debarment of the Directors from incorporating another company in case of noncompliance with government regulations.
It is advisable to dissolve a dormant or inactive company in order to avoid penalties for non-compliance and compliance formalities. Failing to maintain compliance can result in dire consequences apart from encumbering hefty fines.
Fast-Track Exit Mode” was introduced by the Ministry of Corporate Affairs as an easier way to wind up an inactive company. It requires reasonable and minimal formalities and enables inactive companies to close at a faster pace. “Fast-Track Exit Mode” can be induced by invalid company having NIL liability and zero assets and no operations in business activities and has not been involved in business concerns since incorporation or for the preceding year.
A company is required to maintain regular Compliance as a juristic person and a legal entity, throughout its lifecycle as it is established under the Companies Act. Fast-track exit mode can be utilised to wind up a company that is inactive and avoid compliance responsibilities.
Unlike conventional methods which are cumbersome and take a long time, inactive companies can be closed in 90 days under the Fast-track exit mode. Therefore, this scheme is advisable for simpler, faster and easy dissolution of a Company.
In comparison to the maintenance of a dormant company, closing a company is more economical. When a company faces lesser expenditure and in the right time, the Incorporation of the company can be done again.
Failing to IT filing on time incurs fines and penalties, including debarment of Directors from starting another company. Hence, it is better to wind up an inactive company officially rather than confronting liabilities and potential fines in future.
The fast-track exit mode is designed exclusively to make it hassle-free for inactive companies to shut down as introduced by the Government. Therefore, with Fast Track exit mode, it is easy for the company to complete the winding-up process.
The activities of a Company shall be reviewed and determined by our business experts. We will guide you with an appropriate winding up under the Fast-Track exit scheme. The review process can take 2-3 working days.
Depending on the Company, our advisor might require 10-15 working days to prepare documents for closing a company under the Fast-Track Exit scheme.
The Fast-Track Exit Application along with required documents are submitted to the MCA. The MCA generally approves the application for closing up of the company in a span of 90 days.
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