Disqualified Directors - Revive a defaulting Company & Reactivate your DIN – All about Condonation Scheme, 2018

 

Introduction

After a great wipeout of all inactive companies and making lakh of DIN inactive or deactivated by the government of India, many of the concerned directors and companies have filed the PIL with various high courts of the country. Various courts have described the step very harsh as no personalized notice has been sent to the concerned companies.

Hence, in order to provide a revival opportunity to make good for the past deeds of the companies, the government has issued a circular describing the complete process for the revival of the companies.

Let us understand what all case is all about and how you can revive your company and can make active your DIN numbers again.

Why the Companies were stricken off and why Directors were disqualified?

As per the law, it is mandatory to file company’s annual return and balance sheet with the ROC each year and they are liable for late fees if the filings are not done properly. Further, if the companies are failed to file the annual return and balance sheet with the ROC for three consecutive years, the Company’s name is liable to strike off from the register of Companies.

Also, all the associated directors are disqualified from directorship. In September 2017, more than 3 lakh (3,09,614) directors were identified to file a financial statement with ROC for a continuous period of three years and hence, all those directors were barred.

The relief – Companies and director revival process from disqualification

With a view to providing an opportunity to the lakh of disqualified directors, the government of India has come up with the process of company’s revival and the process is called Condonation of Delay Scheme 2018.

The scheme shall come into force with effect from 01.01.2018 and shall remain in force up to 31.03.2018. Further, the scheme is applicable to all defaulting companies whose names have not been struck off by the government during the mass wipeout but are considered as defaulting companies due to non filing of annual return and balance sheet. However, if you have applied for strike off on your own, then this scheme shall not be available to you.

Procedure for revival of companies after strike off

There is a completely different procedure to be followed for revival of companies after strike off. If the company's name has been struck off by the ROC, then the application is to be moved to NCLT for reactivation of company and that process is not covered under this scheme. We will soon notify you the procedure on how you can revive a company after strike off.

Procedure for reactivation of DIN numbers and making active defaulting companies

There is a specific procedure to be followed to activate DIN and making the company active again. Follow the below-explained procedure strictly in order to revive your company and reactivate your DIN Numbers.

The procedure for the revival of companies is as follows:

• Temporary DIN Activation: The DIN numbers of concerned directors were made inactive. However, to avail the benefit of the scheme, the DIN of those directors shall be activated temporarily during the validity of the scheme.
   

• Prepare all balance sheet & Annual filing forms: The second step under this process is to prepare all the required documents that were needed to be filed.
   

• Audit & filing with Chartered Accountant: Once the documents are prepared, the next step is to get them audited with a chartered accountant and file the same with the Registrar of Companies. There are 3 forms to be filed with the MCA and on an average perform will cost you around Rs.3,900/- (Rs.300 fee & 12 times penalty).
   

• Seek Condonation of delay: The defaulting company shall seek Condonation of delay by filing an online form. The form shall be made available after 20th February 2018. The filing government fees for the same shall be Rs.30,000/-.
   

• Follow up: After filing the Condonation application, the next step is to follow up with the Registrar of Companies. After the proper follow-up, the application shall be approved and your DIN and company shall be made active again.

Withdrawal of Prosecution by ROC

The registrar concerned shall withdraw the prosecution(s) pending before the court for all documents filed under the scheme. This is one of the most important advantages of this scheme.

Serious action against companies who do not avail this scheme

Mark this point if you are thinking of NOT availing this scheme. The circular itself mentions that ROC shall take action against those companies who do not avail themselves of this scheme and continue to be under default.

If appeal has already been filed to NCLT against ROC order

If the company or the director has already filed the appeal with the NCLT, then ROC shall not activate their DIN until NCLT orders them too. Hence, if you have filed an appeal with the ROC, then get on with that and ignore this scheme.

Scheme to apply for specific documents

The scheme shall apply to the following documents which are mentioned herein under:

• Form 20B/MGT 7:  Form for filing an annual return by the company having share capital.
• Form 21B/MGT-7: Particulars of Annual return for the company not having share capital.
• Form 23AC, 23ACA, 23AC-XBRL, 23 ACA-XBRL, AOC 4, AOC 4 (CFS), AOC (XBRL) and AOC-4 (Non XBRL).
• Form 66 – Compliance certificate
• Form 23B or ADT 1

The Urgent step

It is being recommended that you should not wait for the government e form availability, rather make sure you start preparing the final documents right now so that you will be able to complete filing on time.

In case you need any help or information, email us at info@hubco.in