Understanding the Process and Timeframe for MCA/ROC to Strike Off a Company Post FTE Exit

The process of striking off a company under the FTE (Fast Track Exit) regime involves several critical steps that typically vary in duration. Despite the general timeframe, the specific duration can span from a few months to over a year, depending on various circumstances. This article aims to explain the process and provide a clearer understanding of the factors that influence the timeline.

Submission of Documents

Once a company decides to exit through the FTE Fast Track Exit route, the initial step involves submitting the necessary documents to the Ministry of Corporate Affairs (MCA) or the Registrar of Companies (ROC), commonly known as the ROC. This application is submitted with all required documents, which are then reviewed by the ROC.

Scrutiny

Upon receiving the application and documents, the ROC conducts a thorough scrutiny to ensure compliance with the necessary criteria for striking off. This scrutiny process helps in identifying any potential issues or discrepancies that might lead to delays.

Publication

If the application and documents meet all the criteria, the ROC will publish a notice in the official gazette regarding the proposed strike-off. This step serves as a notice to any creditors or stakeholders who might object to the strike-off.

Time Frame for Objections

A specific period is usually allocated for raising objections. Creditors or stakeholders can file objections within this timeframe if they disagree with the proposed strike-off. Failure to raise objections within the allowed period generally leads to a smoother process.

Final Strike Off

If no objections are received or after the objection period has elapsed and no new objections have been filed, the ROC proceeds with the strike-off. The strike-off is then officially recorded, and the company is no longer registered in the MCA/ROC databases.

Factors Influencing the Timeline

The overall timeline for striking off a company can vary widely, with some cases taking just 2-3 months while others may extend to over a year. Several factors can contribute to these variations:

Compliance with Requirements: If all necessary documents and criteria are accurately adhered to, the process is generally faster. Any missing or incorrect information can lead to delays. Objections and Rectifications: If objections are filed, they need to be addressed, which can lengthen the process. Providing timely and accurate responses to any queries can help expedite the process. Bureaucratic Delays: These include administrative delays and individual delays due to the ROC staff or other bureaucratic processes.

Data and Real-life Examples

From personal experience, one of my clients had an application take 7 months to be struck off by the ROC. On the other hand, another application was pending for a year. When inquiring about the reasons for the longer duration, the ROC responded with, 'Approval for FTE takes time and there is no specific time limit for approval.' This highlights the variability in processing times and the potential need for patience and persistence while dealing with the ROC.

Conclusion

The process of striking off a company under the FTE Fast Track Exit regime is a multistep procedure that typically takes 2-3 months, but it can sometimes be longer due to various factors. It is essential to be prepared for the possibility of delays and to maintain open communication with the ROC to ensure a smoother process. For a more detailed understanding and guidance, consulting with a legal or professional expert in company law and exit strategies is highly recommended.