MCA issues Condonation of Delay Scheme, 2018; provides opportunity to file overdue Financial Statement(s) and Annual Return
The Ministry of Corporate Affairs (“MCA”) has issued an undated General Circular introducing the “Condonation of Delay Scheme 2018” (“Scheme”) with a view to give an opportunity to the non-compliant, defaulting companies to rectify defaults with respect to filing Financial Statements and Annual Returns.
The Scheme will come into force with effect from 1st January, 2018 and will remain in force upto 31st March, 2018.
The Scheme will provide opportunity to the defaulting companies to file the overdue documents which were due for filing till 30.06.201. The procedure for filing the overdue documents has been explained under the Scheme.
Background and Object:
As per Section164(2) read with section 167 of the of the Companies Act, 2013 (“Act”), a director is disqualified in case of default by a company in filing annual return or a financial statement for a continuous period of three years.
Earlier in September 2017, MCA had identified 3,09,614 directors who had failed to file financial statements or annual returns for a continuous period of three financial years 2013-14 to 2015-16 and therefore, were barred from accessing the online registry of MCA.
Consequently, the defaulting companies and their directors sought an opportunity for becoming compliant and normalize operations. And hence, the Scheme has been introduced.
The Scheme is applicable to all defaulting companies.
Under the Scheme a “defaulting company” has been defined as a company which has not filed its financial statements or annual return as required under the Companies Act, 1956 or Companies Act, 2013, as the case may be, and the Rules made thereunder for a continuous period of three years.
Key highlights of the Scheme:
- In the case of defaulting companies whose names have not been removed from register of companies-
i) The DINs of the disqualified directors deactivated at present will be temporarily activated during the validity of the scheme to enable them to file the overdue documents.
ii) The directors will have to file the overdue documents along with statutory fee and additional fee payable under the Companies Act, 2013.
iii) The defaulting company after filing documents under this scheme, will seek condonation of delay by filing form e-CODS 2018 along with a fee of Rs.30,000/ (Rs. Thirty Thousand only) before the last date of the scheme.
- In case 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 upto the date of this scheme, the Director’s DIN will be re-activated only on NCLT order of revival subject to the company having filed all overdue documents.
- The Scheme will only apply for filing the Forms as mentioned below:
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.
For further details, please refer to the document attached with this email.
Please note that while this is an undated document, we will be on the look-out for the official copy and get back to you as soon as we get hold of the same. Since the Scheme deals with an important subject, we are sharing it as a good to know information.