General Circular 41/2014 dated 15.10.2014: Company Law Settlement Scheme, 2014 (CLSS-2014) – Clarification u/s 164(2) of the Companies Act, 2013.  Immunity from Disqualification to Directors applicable even if Annual Returns are filed after 01/04/2014  but before start of CLSS-2014.

As Per section 164(2)(a) if a Company has has not filed financial statements or annual returns for any continuous period of three financial years its  director gets disqualified for re-appointed as a director of that company or appointed in other company for a period of five years from the date on which the said company fails to do so. But MCA has vide its General Circular No. 41/2014, Dated: 15.10.2014 clarified that immunity from disqualification of directors pursuant to clause (a) of sub-section (2) of section 164 of the Companies Act, 2013 will be applicable with respect to companies who have filed Balance Sheets and Annual Returns on or after 01/04/2014, but before coming into force of CLSS-2014 with effect from 15.08.2014 as contained in General Circular No. 34/2014 dated 12/08/2014.

Government of India
Ministry of Corporate Affairs

5th Floor, `A’ Wing, Shastri Bhawan,
Dr. R. P. Road, New Delhi

General Circular No. 41/2014,

Dated: 15.10.2014

No. 2/13/2014-CL-v

Subject: COMPANY LAW SETTLEMENT SCHEME, 2014 (CLSS-2014) Clarification u/s 164(2) of the Companies Act, 2013.

Representations have been received from stakeholders seeking clarification as to whether immunity from disqualification of directors pursuant to clause (a) of sub-section (2) of section 164 of the Companies Act, 2013 will be applicable with respect to companies who have filed Balance Sheets and Annual Returns on or after 01/04/2014, but before coming into force of CLSS-2014 with effect from 15.08.2014 as contained in General Circular No. 34/2014 dated 12/08/2014.

2. The matter has been examined and it is hereby clarified that in case of companies, who have filed their balance sheets and annual returns on or after 01/04/2014 but prior to launch of CLSS-2014, disqualification under clause (a) of sub-section (2) of section 164 of the Companies Act, 2013 shall apply only for prospective defaults, if any, by such

  1. This issues with the approval of the competent authority.

Yours faithfully,

(k. S. Naarayanan)
Assistant Director (Policy)
23387263

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