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Saturday, December 23, 2017

MCA Introduces from 01.01.18 a Condonation of Delay Scheme to remove Director’s Disqualification

The MCA has now introduced the Condonation of Delay Scheme to provide an opportunity fodisqualified Directors to regularise compliance under the scheme by filing overdue documents with additional fee under E Forms with MCA.
Features of the COD Scheme, 2018
All companies registered in India are required to file annual return with the Ministry of Corporate Affairs each year and under the Companies Act, 2013, Directors of Companies which have defaulted in filing annual return continuously for a period of 3 years are liable to be disqualified and a disqualified Director would be unable to incorporate a new company or act as Director of an existing company for a period of three years.
The Directors associated with defaulting companies i.e the companies that failed to file financial statements or annual returns for a continuous period of three financial years 2013-14 to 2015-16 are disqualified by MCA and name of such companies are being struck off by MCA.
Ministry of Corporate Affairs has now introduced the Condonation of Delay Scheme to provide an opportunity for defaulting companies and Directors to who were disqualified to revive their names and regularise the compliance defaults from 01.01.2018 till 31st March, 2018.
Condonation of Delay Scheme,2018
-          During this period, the DIN of disqualified directors will be re-activated temporarily to facilitate Directors of defaulting companies to file all overdue annual returns.
-          After the end of the scheme which is open for three months, if the Director of a defaulting company failed to regularise compliance and revive their names, DIN of such directors associated with defaulting companies will be deactivated and such directors would be disqualified for a period of 5 years.
-          The defaulting Companies will be able to file the overdue documents i.e Annual Returns and Financial Statements in respective E Forms with additional fee with MCA.
-          In addition to the overdue documents, the company has to file under the Scheme a form e-CODS 2018 along with a fee of Rs.30,000 before 31st March, 2018.
-          On filing the overdue annual return and financial statements and form e-CODS 2018, the DINs of the disqualified Directors would be reactivated.
-          The Directors associated with such defaulting companies if  fail to file the overdue documents and E- COD form with additional fee and penalty till the end of such scheme  their disqualification will be made final for a period of 5 years and other penalties as prescribed under Companies Act 1956 and/or Companies Act, 2013 would apply.
 Summary of Circular by MCA for Condonation of Delay Scheme 2018
The companies registered with ROC / MCA  are required to file their Annual Financial statements and Annual Returns with the Registrar of Companies and non-filing of such reports is an offence under the said Act.
The Companies Act, 2013 effective from 01.04.2014, provide for disqualification of a director on account of default by a company in filing an annual return or a financial statement for a continuous period of three years.
Whereas, with a view to giving an opportunity for the non-compliant, defaulting companies to rectify the default, the Central Government has decided to introduce a Scheme namely “Condonation of Delay Scheme 2018” [CODS-2018] as follows.
1. The scheme shall come into force with effect from 01.01.2018 and shall remain in force up to 31.03.2018
2. ‘overdue documents’ means the financial statements or the annual returns or other associated documents, as applicable, in the case of a defaulting company.
3.“Defaulting company” means a company which has not filed its financial statements or annual return as required under the Companies Act, 1956 or Companies Act, 2013,
4.Applicability: – This scheme is applicable to all defaulting companies (other than the companies which have been stuck off/whose names have been removed from the register of companies under section 248(5) of the Act). A defaulting company is permitted to file its overdue documents which were due for filing till 30.06.2017 in accordance with the provisions of this Scheme.
5. Procedure to be followed for the purposes of the scheme:– (1) In the case of defaulting companies whose names have not been removed from register of companies,-
-  The DINs of the disqualified directors de-activated at present shall be temporarily activated during the validity of the scheme to enable them to file the overdue document.
- The defaulting company shall file the overdue documents in the respectively prescribed eForms paying the statutory filing fee and additional fee payable as per section 403 of the Act read with Companies (Registration Offices and fee) Rules, 2014 for filing these overdue documen
- The defaulting company after filing documents under this scheme, shall seek condonation of delay by filing form e-CODS 2018 attached to this scheme along with a fee of 30,000/- (Rs. Thirty Thousand only) as prescribed under the Companies (Registration Offices and Fee) Rules, 2014 well before the last date of the scheme.
- The DINs of the Directors associated with the defaulting companies that have not filed their overdue documents and the eform CODS, and these are not taken on record in the MCA21 registry and are still found to be disqualified on the conclusion of the scheme in terms of section 164(2)(a) r/w 167(1)(a) of the Act shall be liable to be deactivated on expiry of the scheme period.
-  In the event of defaulting companies whose names have been removed from the register of companies under section 248 of the Act and which have filed applications for revival under section 252 of the Act up to the date of this scheme, the Director’s DIN shall be re-activated only NCLT order of revival subject to the company having filing of all overdue documents.
6. Scheme not to apply for certain documents – This scheme shall not apply to the filing of documents other than the following overdue documents:
(i) Form Number 20B/MGT-7- Form for filing Annual Return by a company having share capital.
(ii) Form 21A/MGT-7- Particulars of Annual return for the company not having share capital.
(iii) Form 23AC, 23ACA, 23AC-XBRL, 23ACA-XBRL, AOC-4, AOC-4(CFS), AOC (XBRL) and AOC-4(non-XBRL) –  Forms for  filing Balance Sheet/Financial Statement and profit and loss account.
(iv) Form 66- Form for submission of Compliance Certificate with the Registrar.
(v) Form 23B/ADT-1- Form for intimation for Appointment of Auditors.
7. The Registrar concerned shall withdraw the prosecution(s) pending if any before the concerned Court(s) for all documents filed under the scheme..

8. At the conclusion of the Scheme, the Registrar shall take all necessary actions under the Companies Act, 1956/ 2013 against the companies who have not availed themselves of this Scheme and continue to be in default in filing the overdue documents.

4 comments:

  1. Whether an active company can file Form STK-2 during this 3 months & close..Directors are in disqaulified list & DINs activated now...pls. clarify..

    ReplyDelete
  2. Filing of Form STK-2 without filing pending filings...

    ReplyDelete
  3. I have also a same issue as above mentioned by Mr. Ravi Kanth. Please Clarify

    ReplyDelete
  4. i have a issue that wheather we have to file annual returns for all periods of for only last annual?
    please clarify

    ReplyDelete