Search

Condonation of Delay Scheme, 2018

Click HERE to Schedule A Call to avoid being permanently disqualified as a Director!


If you are a director who has been disqualified to act as “director” by the Ministry of Corporate Affairs (MCA) because of default in annual filings by one of the companies on whose board you have been serving, or if you are a company that has not done annual filings for more than a year, the New Year brings some good news and a ray of hope for you to redeem yourself!

Wondering what we are talking about? The Ministry of Corporate Affairs (MCA) has disqualified over  3,09,619 directors and struck off approximately 2,24,733 companies for (a) non-filing of financial statements and annual returns for a period of 3 consecutive years, or (b) remaining inactive for a period of 2 consecutive years, without obtaining “dormant” status.

Such was the stringent action taken by Ministry of Corporate Affairs (MCA), that no opportunity was granted to either the director or the defaulting company to make a representation or rectify the non compliance.


However, effective January 1, 2018, the Ministry of Corporate Affairs (MCA) has introduced the Condonation of Delay Scheme, 2018, granting an opportunity to companies that have not filed their financial statements and annual returns in the past to do so by April 30, 2018.

We have summarized the key issues in this regard:


1. Which filings does the Condonation of Delay Scheme, 2018 introduced by the Ministry of Corporate Affairs (MCA) apply to?


The Condonation of Delay Scheme, 2018 applies to all the companies that have not filed the following documents, for 1 or more financial year:

  • Annual Returns

  • Financial Statement

  • Profit and Loss Account

  • Compliance Certificate

  • Intimation of appointment of auditors

2. Which companies are eligible to apply for condonation under Condonation of Delay Scheme, 2018?


The Companies that have not filed their Financial Statement and Annual Returns (including the documents listed in 1 above), for 1 or more financial years.


3. What is the recourse available to a director disqualified because the company in which he is a director has not filed Annual Returns?

The Condonation of Delay Scheme, 2018 provides for temporary reactivation of the Director Identification Number (DIN) of the directors automatically from January 12, 2018 till April 30, 2018. This is to allow the defaulting companies to update their filings. In the event, the defaulting companies do not update their pending annual filings on or before April 30, 2018, then the DIN of director of such defaulting companies shall be permanently deactivated.


4. What is the procedure to be followed for applying for condonation under the Condonation of Delay Scheme, 2018?

  • Check if the DIN of at least one of the directors of the defaulting company is active.

  • File all pending annual returns of such defaulting company, by paying the prescribed statutory filing fees along with applicable additional fees, for delayed filings.

  • Application for condonation of delay in form e-CODS2018 to be filed by the defaulting company along with a fee of INR 30,000/-, before April 30, 2018.

5. Is there any additional fees payable under the Condonation of Delay Scheme, 2018?


As indicated in 4 above, a fee of INR 30,000/- will have to be paid for filing form under Condonation of Delay Scheme, 2018 to the Registrar of Companies.


6. When can the application for condonation under Condonation of Delay Scheme, 2018 be filed?


The Ministry of Corporate Affairs (MCA) is yet to notify the form e-CODS2018, which will be available only after February 20, 2018. Therefore, the application for compounding under Condonation of Delay Scheme, 2018 can be made only after February 20, 2018. However, in the meantime, the defaulting company can complete the process of updating the backlog of annual filings.


7. What is the recourse available to companies whose names have been struck off?


In the event of defaulting companies whose names have been removed from the register of companies, for failure to file returns for a consecutive period of 3 years, an application will have to be made by them to the NCLT, for revival of the company.


Click HERE to Schedule A Call to avoid being permanently disqualified as a Director!

1 view

Recent Posts

See All

About us

Career

Contact us

Terms & Conditions

Privacy Policy

Contact Number

Email Address

  • Facebook
  • LinkedIn
  • Instagram
  • Twitter

© LexStart Consultancy Private Limited | CIN: U74999MH2015PTC265981

REGISTERED OFFICE - 7916, Tulsiani Chambers, Nariman Point, Mumbai - 400021