News

MCA extends ‘Condonation of Delay Scheme’ by a month

K.R.Srivats New Delhi | Updated on April 02, 2018 Published on April 02, 2018

Some relief for disqualified directors

The Corporate Affairs Ministry has extended the validity of ‘Condonation of Delay Scheme (CODS)’ 2018 by a month to April 30 this year.

The CODS 2018—which came into effect on January 1 this year—was a scheme provided by the Government as an opportunity for the non-compliant defaulting companies to rectify their default in compliance on filing of financial statements.

This scheme was earlier valid till March 31, but has now been extended to April 30, according to a circular issued by MCA.

It may be recalled that MCA had in September last year identified 3,09,614 directors associated with the companies that had failed to file financial statements or annual returns in the MCA21 online registry for a continuous period of three financial years 2013-14 to 2015-16 in terms of provisions of Section 164(2) read with 167(1)(a) of the Companies Act 2013.

They were barred from accessing the online registry and a list of such directors was published on the website of MCA.

On the heels of such MCA action, there had been a spate of representation from industry, defaulting companies and their directors seeking an opportunity for the defaulting companies to become compliant and normalise operations.

Some of the affected persons had also filed writ petitions before various High Courts seeking relief from the disqualification.

ADMINISTRATIVE ISSUES

Meanwhile, industry sources highlighted that several administrative issues had come in the way of defaulting companies from participating in the scheme in January this year. “Nothing could be done in the first fifteen days of the scheme due to administrative issues. So this extension is quite useful and warranted”, they said.

There were also several pleas before the National Company Law Tribunal to remove companies from the strike-off list and regularise them. This also led to some delays for the errant companies.

srivats.kr@thehindu.co.in.

Published on April 02, 2018

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