Company Law Settlement Scheme – Opportunity for defaulting Companies

CA Nitesh Bindal

The Ministry of Corporate Affairs, in order to give an opportunity to companies who have failed to file annual statutory documents (Annual Return and Financial Statements), has launched  Company Law Settlement Scheme, 2014 (CLSS-2014), vide General Circular no. 34/2014 dated 12.08.2014.

The scheme gives an opportunity to the defaulting companies to enable them to make their default good by filing belated documents.

Corporate can avail the following benefits:

1. Immunity from prosecution for delayed filing
2. A reduced additional fee of 25% of the actual additional fees payable
3. Escape for directors disqualified under section 164(2) of Companies Act, 2013

CLSS shall not apply to the filing of belated documents other than the following:

1. Form 20B- Form for filing annual return by a company having share capital.
2. Form 21A-Particulars of Annual Return for the company not having share        capital.
3. Form 23AC, 23ACA, 23AC-XBRL and 23ACA-XBRL- Forms for filing Balance Sheet and Profit & Loss account.
4. Form 66- Form for submission of Compliance Certificate with the Registrar.
5. Form 23B- Form for intimation for Appointment of Auditors.

Further, CLSS shall not apply in the following cases:

1. Companies against which action for striking off the name under sub-section(5) of section 560 of Companies Act, 1956 has already been initiated by the Registrar of Companies or
2. Where any application has already been filed by the companies for action of striking off name from the Register of Companies or
3. Where applications have been filed for obtaining Dormant status under section 455 of the Companies Act, 2013
4. Vanishing companies

The scheme shall remain in force for a period of two month, i.e., from 15^th August, 2014 to 15^th October, 2014.