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MCA in September 2017, identified more than 3 lakhs directors associated with the companies that had failed to file financial statements or annual returns in the MCA21 online registry for a continuous period of three financial years 2013-14 to 2015-16 and they were barred from accessing the online registry and a list of such directors was published on the website of MCA. Whereas, as a result of above action, there have been a spate of representations from industry, defaulting companies and their directors seeking an opportunity for the defaulting companies to become compliant and normalize operations.
Whereas, certain affected persons have also filed writ petitions before various High Courts seeking relief from the disqualification. 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].
This is a onetime opportunity for the disqualified directors to remove their disqualifications from the companies by filing the e-CODS form along with fee of Rs. 30,000. The disqualified directors should make most of this scheme and remove non-compliances relating to non-filing of financials & annual returns. The professionals such as CAs, CSs, should guide and assist directors in complying with the scheme.
Condonation Of Delay Scheme, 2018 would definitely prove to be a ‘saviour’ for the disqualified directors. They can save themselves from disqualification arisen from the defaulting companies.
Below mentioned are the aspects with relation to the Condonation of Delay Scheme 2018.
Applicability and validity of Condonation Of Delay Scheme, 2018:
Condonation Of Delay Scheme, 2018 shall come into force with effect from 01.01.2018 and shall remain in force up to 31.03.2018 i.e. for 3 Months
Eligibility for Condonation Of Delay Scheme, 2018:
Condonation Of Delay Scheme, 2018 is available to all the defaulting companies other than the companies which have been stuck off or whose names have been removed from the register of companies.
A defaulting company means as company which has not filed its financials or annual returns for a continuous period of 3 years with MCA.
Procedure and key aspects of Condonation Of Delay Scheme, 2018:
- The DINs of the concerned disqualified directors de-activated at present, shall be temporarily activated during the validity of the scheme to enable them to file the overdue documents
- The defaulting company shall file the overdue documents in the respective prescribed e-Forms paying the statutory filing fee and additional fee payable for filing these overdue documents
- The defaulting company after filing documents under this scheme shall seek condonation of delay by filing form e-CODS attached to this scheme online on the MCA21 portal. The fee for filing application e-form CODS is Rs. 30,000/-
- The DINs of the Directors associated with the defaulting companies that have not filed their overdue documents and the e-form 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 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 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.
- The scheme shall only be applicable for following forms:
> Form Number 208/MGT-7- Form for filing company having share capital.
> Form 21A/MGT-7- Particulars of Annual return Annual return for the company not having share capital.
> 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.
> Form 66- Form for submission of Compliance Certificate with the Registrar.
> Form 238/ADT-1- Form for intimation for Appointment of Auditors
- The Registrar concerned shall withdraw the prosecution(s) pending if any before the concerned Court(s) for all documents filed under the scheme subject to any Civil and Criminal Liabilities.
- At the conclusion of the Scheme, the Registrar shall take all necessary actions against the companies who have not availed themselves of this Scheme and continue to be in default in filing the overdue documents.
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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