Companies
registered under The Companies Act, 2013 are required to file their annual financial
statements & annual returns with Registrar of Companies and non-filing of
same is offence under the companies act, 2013.
Section
164(2) read with section 167 of the Companies Act, 2013 (w. e. from 01.04.2014)
provide for disqualification of director on account of default by company in
filing an annual return or financial statement for a continuous period of 3
years.
Rule
14 of The Companies (Appointment & Disqualification of Directors) Rules,
2014 prescribe that every director shall inform to the company concerned about
his disqualification, if any, u/s 164(2), in form DIR-8.
Consequent
upon notification of provisions of section 164(2), Ministry of Corporate
Affairs (MCA) had launched a Company Law Settlement Scheme 2014 providing an opportunity
to defaulting companies to clear their defaults within the time period
specified therein & Following the due process as notified in Condonation of
Delay Scheme.
MCA
in September 2017 identified 3,09,614 directors associated with the companies
that has failed to file financial statements or annual returns in the MCA21
online registry for a continuous period of 3 financial years from 2013-14 to
2015-16 in terms of provisions of Section 164(2) r/w 167(1)(a) of the Companies
act, 2013 & were debarred from accessing the online registry and list of
such directors was published on the website of MCA.
As
a result of above action, there have been representations from industry,
defaulting companies & their directors seeking an opportunity for the
defaulting companies to become compliant & normalize operations. Certain
affected persons have also filed writ petition before various High Courts seeking
relief from disqualification.
With
a view to giving opportunity for the non-complaint, defaulting companies to
rectify their defaults, in exercise of its powers conferred u/s 403, 459 &
460 of the Companies act, 2013, the Central Government has decided to introduce
a scheme namely “Condonation of Delay Scheme
2018” [CODS-2018]. Brief details about CODS-2018 is as below.
1.
The
CODS-2018 shall come into force with effect from 01.01.2018 and shall remain in
force up to 31.03.2018.
2. Applicability:
CODS-2018 is applicable
to all defaulting companies (other than companies whose name is struck off/removed
from Register of companies). A defaulting company is permitted to file its
overdue documents which were due for filing till 30.06.2017.
3. Procedure:
I.
The
DINs of concerned disqualified directors de-activated at present, shall be temporarily
activated during validity of the scheme to enable them to file the overdue
documents.
II.
The
defaulting companies shall file overdue documents in respective prescribed
eforms paying statutory filing fee & additional fee payable.
III.
The
defaulting company after filing documents under this scheme, shall seek condonation
of delay by filing e-CODS online on MCA21 portal. The fee for filing
application in e-Form CODS is ₹ 30,000/- (Thirty Thousand only).
IV.
The
DINs of the Directors associated with the defaulting companies that have not filed
their overdue documents & 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.
V.
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.
4. Scheme
apply to certain Documents only:
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 a 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
238/ADT-1- Form for intimation for Appointment of Auditors.
5.
The
Registrar concerned shall withdraw the prosecution(s) pending, if any, before
the concerned Court(s) for all documents filed under the scheme. However, this
scheme is without prejudice to action under section 167(2) of the Act or civil
and criminal liabilities, if any, of such disqualified directors during the
period they remained disqualified.
6.
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.
7.
The
e-Form CODS 2018 would be available from 20.02.2018 or an alternate date, which
will be intimated by the ministry on www.mca.gov.in.
The stakeholder should complete the necessary procedural requirements and file
overdue documents without waiting for the availability of the e-CODS form.
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