Defaulting Companies and e-filing under Companies Act, 2013

CA Amresh Vashisht, Meerut

You may come across the situation while filling forms of the company that you are not allowed filing in spite of compliance from your company secretary and your valid digital signature. You may see that an error message crops up as under:

“The Director signing the eform is also a director of a defaulting company which has not filed due balance sheet and/or annual return. Hence the director is not allowed to file this form. Such defaulting company is required to file all the balance sheets, annual returns first, and then only the director will be allowed to sign the eform for filing.”

DEFAULTING COMPANIES/ DIRECTOTS ARE NOT ALLOWED

If the company has not filed its due balance sheet or annual returns for any financial year, i.e. 2006-07 onwards then such company shall be treated as a defaulting company. Such company will not be allowed to file any eForm (except for the list of eForms allowed) unless all the due balance sheets and annual returns are filed. First the company has to go for Annual filing e-Forms (Form 20B, 21A, 23AC, 23ACA, 23AC-XBRL, 23ACA-XBRL and 66) for the year for which it is defaulting.

MCA CIRCULARS GAVE A CERTAIN PATH TO FOLLOW

The Ministry of Corporate Affairs (MCA) had come out with two circulars related to the above issue.

 The First General Circular No. 33/2011 was issued on 01.06.2011 and the circular contains that with effective from 3^rd July, 2011, no request whether in oral/writing/through e-forms will be accepted for recording any event based changes, for a defaulting company which has not filed its balance sheets and annual returns, except for a few forms i.e. form 32, 20B, 21A, DIN-3, 21, 23AC, ACA, 1 INV, 23B and 66. The Circular also states that no e-forms shall be accepted from Directors of these defaulting companies for any other company also. Company Secretaries and Auditors of these companies will also not be allowed to sign and certify any forms for such companies till the error is rectified.

 The Second General Circular No. 38/2011, issued on 20.06.2011, was issued as a clarification to the above circular and it reiterated that the above circular will be effective from 03.07.2011. It stated further that above circular shall be applicable to those defaulting companies and their Directors which have not filed Balance Sheet or Annual Return for any of the financial year’s 2006-07, 2007-08, 2008-09 and 2009-10.

REMOVE THE DEFAULTING STATUS FIRST

The company will have to file all the due annual returns and balance sheets for the financial years for which it has been marked as defaulting. Once the same are filed, the defaulting status of the company will be removed and the company will be able to file normally. The year wise defaulting status shall be displayed while viewing the master data of a company on MCA21 portal. The same is being hosted at the site.

DIRECTOR OF DEFAULTING COMPANY

If the company has not filed its due balance sheet or annual returns for any financial year, the directors of such company are defaulter directors and they are not eligible to file any form for any of the company with the MCA. This is because of the reason that 2006-07 onwards such companies are being treated as a defaulting company. So, signing of any e Form on MCA portal (for any company) by the signatories of the defaulting company is not allowed (except for the list of e Forms allowed).

EXCEPTION LIST ALLOWED FOR DEFAULTING COMPANY

However the signing for the exception list shall be allowed only in respect of the defaulting company and not in respect of any other company. The defaulting Director can affix his DSC for e Forms. For Example One of Company Director name has come in MCA under defaulters list for a default of one company, though he is Director of three other Companies also. Out of such companies, One Company which has not uploaded Annual filing forms falls under defaulting company. Then he has to upload all annual forms by affixing his DSC of that particular company first. Only that default company shall accept his DSC for uploading at the first place after that he shall be free to use his DSC for the rest of the company.

ADDITIONAL FEE IS PAYABLE

Pursuant to rule 12 of the Companies (Registration of Offices and Fees) Rules, 2014, following table of additional fees shall be applicable for delays in filing of the forms other than for increases in Nominal Share Capital

Further Note;

1) The additional fee shall also applicable to revised financial statement or board’s report under sections 130 and 131 of the Act and secretarial audit report filed by the company secretary in practice under section 204 of the Act.

(2) The belated filing of documents /forms (including increasing in nominal capital and delay caused thereon) which were due to be filed whether in Companies Act, 1956 Act or the Companies Act, 2013 Act i.e due for filing prior to notification of these fee rules, the fee applicable at the time of actual filing shall be applicable.

(3) Delay beyond 270 days, the second proviso to sub-section (1) of section 403 of  the Act may be referred.

MCA SITE PROVIDE THE DATA OF DEFAULT & DEFAULTERS

The MCA site gives the list of default companies, Defaulter Directors & Defaulters company secretaries on its site at http://www.mca.gov.in/MCA21/deft_list.html , where you can check such list which gets updated from time to time.