Fast track exit mode

This query is : Resolved

Akshat Bansal (Querist)
Follow

07 October 2015 Do we need to File all earlier Years pending Annual Return and balance sheet before applying for FTE Scheme, or Just latest year Annual Return and balance sheet will suffice?
Also kindly clarify whether NIL Assets & Liabilities clause applies to cash as well? Because in such a case BS of the company shall have only Share Capital and Debit Balance of P&L Account.
Thanks in Advance

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
Follow

07 October 2015 No need to file earlier and current years annual returns. Statement of account with capital and P and L a/c (debit balance) is enough as per General Circular 36/2011 dated 7-6-2011.

Akshat Bansal

Akshat Bansal (Querist)
Follow

09 October 2015 Thank you sir.
I still have a doubt left. Company has some Cash left but as per Circular 36/2011 the company should have NIL assets & Liabilities and cash is an asset, so can't we file for FTE till cash is over?

Upgrade to CAclubindia Pro. Subscribe Now!

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
Follow

24 July 2024 Under the Fast Track Exit (FTE) Scheme for defunct companies in India, here are the clarifications to your queries:

1. **Filing of Pending Annual Returns and Balance Sheets:**
- As per the Ministry of Corporate Affairs (MCA), it is required to file all pending Annual Returns and Balance Sheets up to the date of closure of the company before applying for the FTE Scheme. This means you need to ensure that all statutory filings (Annual Returns and Balance Sheets) for all previous financial years are up to date.

2. **Submission of Financial Statements for FTE:**
- When applying for the FTE Scheme, you should submit the latest year's Annual Return and Balance Sheet along with the application. However, all previous years' filings should also be completed before applying. The latest year's financial statements alone are not sufficient; the company's filings must be current up to the date of application.

3. **NIL Assets & Liabilities Clause:**
- The FTE Scheme requires that the company has NIL assets and liabilities. Cash is indeed considered an asset. Therefore, if the company still has cash on hand, it would not qualify under the FTE Scheme until the cash is appropriately utilized or distributed to meet liabilities (if any). The company must cease all business activities and ensure that there are no assets or liabilities left before applying for FTE.

4. **Circular 36/2011 and Cash Assets:**
- Circular 36/2011 clarifies that the company should have NIL assets and liabilities. Since cash is an asset, the company cannot apply for FTE until the cash is brought down to NIL through proper utilization or distribution.

In conclusion, before applying for the FTE Scheme, ensure that:
- All pending Annual Returns and Balance Sheets are filed.
- The company ceases all business activities.
- All assets are realized and liabilities are settled, bringing the company to a state of NIL assets and liabilities, including cash.

Consulting with a professional such as a Chartered Accountant or Company Secretary familiar with the FTE Scheme and company closure procedures would be beneficial to ensure compliance with all requirements.