The Fast Track Exit (FTE) Scheme is a simplified way for companies in India to close down their business legally.
It was introduced by the Ministry of Corporate Affairs (MCA) under Section 248 of the Companies Act, 2013 to help inactive or non-operational companies get their names removed from the Register of Companies (ROC) easily.
In simple words, the FTE Scheme allows companies that are no longer running any business to shut down smoothly without going through a lengthy winding-up process.
⚙️ Purpose of the FTE Scheme
The main goal of the Fast Track Exit Scheme is to:
✅ Reduce the number of inactive or defunct companies in India
✅ Save compliance costs for business owners
✅ Simplify the legal procedure for closure
By using this scheme, companies can avoid the burden of filing annual returns and maintaining compliance when they have already stopped operating.
🧾 Eligibility Criteria for FTE Scheme
Not every company can use this route for closure.
A company can apply under the FTE Scheme if it meets the following conditions:
| 🔢 | Eligibility Condition | Description |
|---|---|---|
| 1 | No Business Operations | The company has not carried on any business activity for the last one year. |
| 2 | No Liabilities | All dues, loans, and taxes have been cleared before applying. |
| 3 | Up-to-Date Filings | The company has filed all financial statements and returns up to date. |
| 4 | Not Involved in Legal Proceedings | The company should not have any ongoing court cases or regulatory actions. |
| 5 | Director Consent | All directors must agree to apply for strike-off. |
If a company meets these conditions, it can apply for closure by filing Form STK-2 under the FTE scheme.
🧩 Companies Not Eligible Under FTE
Certain companies cannot close under this route, including:
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Listed companies
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Section 8 (non-profit) companies
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Companies under investigation or inspection
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Vanishing companies
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Companies with unpaid liabilities
Such companies must follow the regular winding-up procedure under the National Company Law Tribunal (NCLT).
🪪 Documents Required for FTE Scheme
To apply for closure, the following documents are mandatory:
1️⃣ Board Resolution for closure
2️⃣ Affidavit by all directors
3️⃣ Indemnity Bond from directors
4️⃣ Statement of Accounts (not older than 30 days)
5️⃣ Consent letters from shareholders
All these documents ensure that the closure process is voluntary and transparent.
📘 Conclusion
The Fast Track Exit (FTE) Scheme offers a convenient, cost-effective way for companies that are no longer active to close down legally.
It saves time, reduces compliance load, and ensures a hassle-free exit from the corporate world.
If your company meets the eligibility conditions, filing for closure through the FTE Scheme is one of the most efficient options available under Indian company law.