Has your company failed to do annual filings for the past years under the Companies Act 1956 / 2013? Are the Directors of your company / group companies disqualified due to non-filing of returns?
If yes, then the New Year brings some good news for your company and the disqualified directors.
In October 2017, over 2 lakh directors were disqualified due to non-filing of statutory annual forms.
To give relief, Ministry of Corporate Affairs (MCA) has introduced a scheme for companies to make good the default in filing annual forms for the past years.
This scheme is named “Condonation of Delay Scheme, 2018 (CODS – 2018)”.
Before you decide to avail the scheme, let us first see what is ‘Condonation of delay’?
In case of Companies Act, 2013, it means that if any document / form is required to be filed with the Registrar of Companies under any provision of the Act and is not filed within the time specified, the company has to request to condone the delay by filing certain forms / petition.
CODS-2018 is applicable to all those companies who have not filed their balance sheet, annual return and form for intimation of auditors for the past years i.e. filing is due till June 2017.
This scheme is effective from January 1, 2018 to March 31, 2018. Click here to view the scheme.
What is the procedure to avail this scheme?
#1 – The Director’s Identification Number (DIN) of the directors of such companies, who have been disqualified, will be temporarily activated for the period of the scheme.
#2 – The defaulting company has to file the statutory forms with additional fees.
#3 – After filing the forms, the company has to file e-form CODS-2018 with a fee of Rs. 30,000/- to seek condonation of delay.
The attachments with the form are:
- Proof of withdrawal of any appeal(s) against any notice issued or complaint filed before the competent court
- Details in respect of prosecution(s) pending against the company and its officers in respect of documents filed late under the scheme which requires withdrawal by the Registrar
- Details of director(s) declared as proclaimed offender or facing criminal case(s) for economic offences
#4 – The Registrar of Companies will withdraw the prosecution(s) pending, if any, before the concerned Court(s) for all documents filed under the scheme.
Which forms are allowed to be filed under this scheme?
Only the following forms are allowed to be filed under this scheme:
- Form 20B / Form MGT-7 – Form for filing Annual return by a company having share capital.
- Form 21A / Form MGT-7– Form for filing Annual return by a company not having share capital.
- Form 23AC, Form 23ACA, Form 23AC-XBRL, Form 23ACA-XBRL, Form AOC-4, Form AOC-4 (CFS), Form AOC (XBRL) and Form AOC-4 (non-XBRL) – Forms for filing Balance Sheet/Financial Statement and Profit and Loss account.
- Form 66 – Form for submission of Compliance Certificate with the Registrar.
- Form 23B / Form ADT-1– Form for intimation for Appointment of Auditors.
Can the companies, which have been struck off by the Registrar, avail this scheme?
This scheme is not applicable to the companies which have been stuck off/ whose names have been removed from the register of companies. If such companies want to avail this scheme, they have to first file a petition for revival with National Company Law Tribunal (NCLT). Once an order is received from NCLT to restore the name of the company, the DIN of Directors of such company will be activated and it can file the forms.
What if a company does not avail the scheme?
The Registrar of Companies will take necessary action against the companies to whom this scheme is applicable and have not availed the scheme.
The DIN of the Directors of such companies will be deactivated on the expiry of the scheme and the directors will continue to be disqualified.
Lastly, is this scheme a relief for the disqualified Directors?
In my view, yes, it is expected to be a relief for the disqualified directors. Since the forms will be filed, the disqualification should be removed by the Registrar.
It is clarified by MCA that the scheme is not applicable for those Directors who have been associated with a company which was struck off under Section 248(1) of the Companies Act, 2013 and such DINs shall be activated only upon receipt of orders for revival of the said company as per due process laid down under Section 252 of the Companies Act-2013.
Have you filed for restoration of name of your company? Are you planning to avail this scheme? If you need any professional help in filing forms under this scheme, you can write to me at kruti@cskruti.com