General
Circular No. 34/2014, F. No. 02/13/2014 CL-V, dated 12th August, 2014
As you are
aware, the Companies Act requires companies to file annual documents (Annual return and financial Statements) on the MCA21
electronic registry, within prescribed time limits. Sections 92, 137 and 403 of
the Companies Act, 2013, which correspond to sections 159, 220 and 611 of the
Companies Act, 1956 may be referred to in this regard. These annual documents
are considered very important in context of an up-to-date Registry, it is
observed that a large percentage of companies have not filed their statutory
documents making them liable for penalties and prosecution for such
non-compliance.
2. The Companies
Act, 2013 lays down a stricter regime for the defaulting companies with higher
additional fees. The quantum of punishment has been enhanced under the above
mentioned provisions of the Act vis-a-vis the earlier Act i.e. Companies
Act, 1956. A specific provision for enhanced fine in case of repeated
default also been included in the form of section 451 of the Act.
Additionally, the provisions section 164(2) of the Act, inter alia,
providing for disqualification of directors in case a company has not filed
financial statements or annual returns for any
continuous period of three financial years has been extended to all companies.
3. The Ministry
has received representations from various stakeholders requesting for grant of
transitional period/one-time opportunity to enable them to file their
pending annual documents to avoid attraction of higher fees/fine and other
penal action, especially disqualification of their Director prescribed under
the new provisions of the Act.
4. in
order to give such an opportunity to the defaulting companies to enable them to
make their default good by filing these belated documents, the Central
Government in exercise of powers conferred under section 403 and 460 of the
Companies Act, 2013 has decided to introduce a Scheme namely “Company Law
Settlement Scheme 2014″ [CLSS-2014] condoning the delay in filing the above
mentioned documents with the Registrar, granting immunity for prosecution and
charging a reduced additional fee of 25% of the actual additional fees payable
as per section 403 read with Companies (Registration Offices and Fee) Rules,
2014 for filing those belated documents under the Companies Act, 1956/2013 and
the Rules made thereunder.
5. In
addition, the scheme gives an opportunity to Inactive companies to get their
companies declared as ‘dormant company’ under section 455 of the Act (Chapter
XXIX) by filing a simple application at reduced fees. The said provision
enables Inactive companies to remain on the Register of Companies with minimal
compliance requirements.
6. The details
of the Scheme are as under:-
(i) The scheme
shall come into force on the 15th August 2014 and shall remain in force up to
15th October, 2014.
(ii) Definitions
– In this Scheme, unless the context otherwise requires,
(a) “Act” means the Companies Act,
2013 and Companies Act, 1956 (where ever applicable);
(b) “Company” means a company as
defined in clause of 20 of section 2 of the Companies Act, 2013 ;
(c) “defaulting company” means a
company defined under the Companies Act, 2013, and which has made a default in
filing of annual statutory documents.
(d) “designated authority” means the
Registrar of Companies having jurisdiction over the registered office of
the company.
(e) “immunity certificate”
means the certificate referred to in sub-paragraph (vi) of the Scheme;
(f) “inactive Company” means as
defined In Explanation (i) to sub-section (1) of section 455(1) of
Companies Act, 2013.
(iii) Applicability:
- Any “defaulting company” Is permitted to file belated documents
which were due for filing till 30th June 2014 In accordance with the provisions
of this Scheme:
(iv) Manner
of payment of fees and additional fee on filing belated document for
seeking Immunity under the Scheme - The defaulting company shall
pay statutory filing fees as prescribed under the Companies (Registration
Offices and fee) Rules, 2014 along with additional fees of 25% of the actual
additional fee payable on the date of filing of each belated document.
(v) Withdrawal
of appeal against prosecution launched for the offences: If the
defaulting company has filed any appeal against any notice Issued or complaint filed before the competent court for violation of
the provisions under the Companies Act, 1956 and/or Companies Act,
2013 in respect of which application is made under this
scheme, the applicant shall before filing an application for issue of Immunity
certificate, withdraw the appeal and furnish proof of such withdrawal along
with the application.
(vi) Application
for Issue of Immunity in respect of document(s) filed under the Scheme -
The application for seeking immunity in respect of belated documents filed
under the Scheme may be made electronically in the e-Form CLSS-2014 annexed,
after the document(s) are taken on file, or on record at approved by the
Registrar of Companies as the case may be. The e-Form for filing application to
obtain such a certificate will be available on the MCA21 portal from 1st
September, 2014 and may be filed thereafter but not later than three months
from the date of closure of the Scheme. There shall not be any fee payable on
this Form.
Provided that
this immunity shall not be applicable in the matter of any appeal pending
before the court of law and in case of management
disputes of the company pending before the court of law or tribunal.
(vii) Order by designated authority
granting immunity from penalty and prosecution - The designated
authority shall consider the application and upon being satisfied shall grant
the immunity certificate in respect of documents filed under this Scheme.
(viii)
Scheme not to apply in
certain cases – (a) This scheme shall not apply to the filing of
belated documents other than the following:
a. Form
20B - Form for filing annual return by a company having share
capital.
b. Form
21A - Particulars of Annual return for the company not having share
capital.
c. Form
23AC, 23ACA, 23AC-XBRL and 23ACA-XBRL - Forms for filing
Balance Sheet and Profit & Loss account.
d. Form
66 – Form for submission of Compliance Certificate with the Registrar.
e. Form
238 - Form for Intimation for Appointment of Auditors.
(ix) This Scheme shall not apply
a. to 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
b. where any application has already
been filed by the companies for action of striking off name from the
Register of Companies or
c. where applications have been
filed for obtaining Dormant Status under section 455 of the Companies
Act, 2013;
d. to vanishing companies
(x) After
granting the immunity, the Registrar concerned shall withdraw the
prosecution(s) pending if any before the concerned Court(s);
(xi)
Scheme for Inactive Companies: The defaulting inactive companies,
while filing due documents under CLSS-2014 can, simultaneously, either:
a. apply to get themselves declared
as Dormant Company under section 455 of the Companies Act, 2013 by filing
e-form MSC-1 at 25% of the fee for the said form; OR
b. apply for striking off the name of
the company by filing e- Form FTE at 25% of the fee payable on form FTE.
(xii)
Applicability of clause (a) sub-section (2) of Companies Act, 2013 In
case of companies availing the Scheme:- In case of defaulting
companies which avail of this Scheme and file all belated documents, the
provisions of clause (a) of subsection (2) of section 164 of the Companies Act,
2013 shall apply only for the prospective defaults, if any, by such companies.
7. At the
conclusion of the Scheme, the Registrar shall take necessary action under the
Companies Act, 1956/ 2013 against the companies who have not availed this
Scheme and are in default in filing these documents in a timely manner.
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