One More Chance for Defaulting Companies and Disqualified Directors to become Compliant : Condonation of Delay Scheme, 2018 (CODS 2018) as introduced vide General Circular No. 16/2017 Dated 29/12/2017
In September 2014 Ministry of Corporate Affairs (MCA) had launched a Company Law Settlement Scheme, 2014 in order to provide an opportunity to the defaulting companies to clear their defaults within the time period specified and following the notified process there under. However, many organizations either ignored this move or failed to become compliant through this scheme.
Further, in September 2017 the ministry took another step to make the corporate world more transparent, and identified, 3,09,614 directors associated with the companies that have failed to file their annual filing documents with concerned ROCs for preceding last three financial years. These directors were barred from accessing online registry and a list of directors was published on the website of MCA.
As a result of these two actions, number of organizations went through some troublesome situations in their day to day operations and also in the form of stakeholder relationships; and numbers of writs were filed before the High Courts seeking relief.
In pursuance of the above situations, Central Government is once again coming with the scheme called “Condonation of Delay Scheme, 2018” [CODS-2018]. The salient features of the scheme are as follows:
- All the defaulting companies, whose names are not struck off or not removed from the register of the companies, may file its overdue documents regarding annual filing, which were due for filing till 30.06.2017 under Condonation of Delay Scheme, 2018.
- DIN of the disqualified directors, shall be temporarily reactivated for the purpose to take benefit of the Condonation of Delay Scheme, 2018.
- Form 20B, Form 66, Form 23AC 23ACA (including XBRL forms), Form 21A, Form MGT 7, Form 21A, Form AOC4 (including XBRL form), Form AOC 4(CFS), Form 23B, Form ADT 1 shall be filed along-with necessary attachments, fees and additional fees as prescribed under the Act.
- After filing all the pending forms, company shall apply for Condonation by filing form e-CODS along with the fees of Rs. 30000/- on MCA portal. Form e-CODS will be available on the portal from February 20, 2018 or another date as may be notified under Condonation of Delay Scheme, 2018.
- DIN of the directors associated with the defaulting companies, which have filed their overdue documents even after the conclusion of the Condonation of Delay Scheme, 2018 shall be liable to be deactivated on the expiry of the scheme period i.e. March 31, 2018.
- Companies whose names have already been removed from the registry and which have applied for the revival upto the date of this Condonation of Delay Scheme, 2018, DIN of the Directors of such company shall be reactivated only NCLT order revival of such company on the filing of all overdue documents.
- The Registrar concerned shall withdraw the prosecution pending if any before the concerned authority for all documents filed under the Condonation of Delay Scheme, 2018 without prejudice to any civil or criminal liability, if any, of the disqualified director and the company.
- Defaulting companies, which have not complied with the provisions even after the conclusion of this scheme, the Registrar shall take necessary actions against them.