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Government of India Introduces Fast Track Process for Closure of Companies

On 26th December 2016 In further progress to the reforms introduced by the Government of India, it has notified the rules relating to removal of companies from Registrar of Companies. The rules are named as Companies (Removal of Names of Companies from the Registrar of Companies) Rules, 2016.

The rules lay the process of removal of companies from the registrar. As per the rules certain companies are not allowed to be removed like listed companies, delisted companies due to noncompliance of listing regulations, vanishing companies, etc. the rules has provided the manner of filling of application, forms to be submitted, manner of publication of notice, manner of notarization, etc. The rules come as a relief to the time consuming process of winding up of defunct companies.

Ministry of Corporate Affairs (MCA) also issued a Notification dated 26th December, 2016 notifying Section 248, 249, 250, 251 and 252 of Companies Act, 2013 (Chapter XVIII). This chapter deals with Removal of Names of Companies from Register of Companies. MCA has appointed 26.12.2016 as effective date for Section 248 to 252.

This has replaced Section 560 of erstwhile Companies Act, 1956. Accordingly, procedure for application with respect to closure of defunct company under Fast Track Exit Scheme (FTE) is expected to be ceased and replaced by new rules which have been notified by MCA on 27th December, 2016.

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5 January 2017
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