Company law settlement scheme

This query is : Resolved

Report Abuse Follow Query Ask a Query

Naveena N

Naveena N (Querist)
Follow

31 August 2014 what does company law settlement scheme mean please reply at the earliest

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
Follow

31 August 2014 The Ministry of Corporate Affairs has issued circular no. 34/2014 dated 12th August, 2014 providing one time opportunity by introducing the Company Law Settlement Scheme, 2014 in order to provide the facility to the corporate to file the Annual Returns and Annual Financial Statements as it was observed that a large number of companies have not filed their statutory documents which makes such companies liable for heavy penalties and prosecution for such non- compliances. And, further Companies Act, 2013 lays down a stricter regime as compared to the Companies Act, 1956 for the defaulting companies by enhancing the overall penalties. The Quantum of the punishment has also been enhanced and additionally now section 164(2) which is now applicable to all companies for the disqualification of Directors for non-filing of annual returns and annual accounts for a continuous period of three years makes the directors disqualified.

Whereby the ministry was receiving certain representations from the stakeholders requesting for grant of transitional period/ one time opportunity to enable them to file their annual documents to avoid attraction of higher penalties and other penal provisions under the new act.

In order to give such opportunity to the defaulting companies and only those defaulting companies which whose due dates were till 30th June, 2014, to enable them to make their default good by filing these annual documents, the Central Government has introduced a scheme with the name of 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 fees which shall be 25% of the actual additional fees payable as per section 403 of the Companies Act, 2013 for filing those belated documents under the Companies Act, 1956/2013 and the rules made there under.

The scheme shall come into force on 15th August, 2014 and shall remain up to 15th October, 2014.

Thereby, after the process of filing these belated documents once gets completed the Registrar of Companies shall be granted an immunity certificate by the registrar, which shall act as proof for such companies.

Circular may be seen from below link--

http://www.mca.gov.in/Ministry/pdf/circular_34_13082014.pdf