Important Update – Annual Filings

 

As per a recent notification dated October 29, 2019, the Ministry of Corporate Affairs (“MCA”) has provided relief to the stakeholders by relaxing additional fees and extending the last date of filing for the following for the financial year which ended on March 31, 2019 to:

  1. Filing of forms for financial statements – November 30, 2019; and
  2. Filing of annual returns – December 31, 2019.

On failure to file the forms by the above due dates, an additional fees of INR 100/- per day for each day of default will become applicable.

Information to Include in Director’s Report

The following information must be mandatorily disclosed in the Director’s Report filed by the Board of Directors:

1 Dividend, if declared & amount, if any, carried forwarded to reserves
2 Details of ESOPs:

a. Options granted

b. Options vested

c. Options exercised, and

d. Total number of Options in force, if any

3 Information about the financial performance / financial position and details of the subsidiaries / associates/ JV
4 Details of loans, investments and guarantees by the company
5 Details relating to deposits, covering the following:

Accepted during the year;
Remained unpaid or unclaimed as at the end of the year;
Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved (i) at the beginning of the year (ii) maximum during the year and (iii) at the end of the year.
Details of deposits which are not in compliance with the requirements of Chapter V of the Act

6 Website address
7 Disclosures under the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013
8 Borrowing by the company
9 Director remuneration (for each director)
10 Details of transfer of shares during the financial year
11 Break up of related party transaction (1. Name of related party and nature of relationship and 2. Duration of the agreement)

Urgent reminder for filing of Form DIR 3 – KYC | 5 things you need to file the Form DIR 3 – KYC

As pointed out in our previous article (Directorship – Comply with MCA, KYC Guidelines), the Ministry of Corporate Affairs of the Government of India has decided to conduct a KYC check of all directors of all companies registered in India on an annual basis. As per the Ministry of Corporate Affairs, any person who has been allotted Director Identification Number (“DIN/DPIN”) on or before March 31, 2018 and the status of such DIN is ‘Approved’, needs to file form DIR 3 – KYC to update KYC details in the system of the Ministry of Corporate Affairs.

The KYC has to be filed on or before September 15, 2018.

You will require these 5 things to make this filing:

(i) A unique personal mobile number and a personal email id;

(ii) PAN number and Aadhar number;

(iii) Class 2 Digital Signature Certificate.

(iv) Form DIR 3 – KYC which has been filled in by you and certified by a practicing Chartered Account / Company Secretary or a Certified Management Accountant (Certified by the Institute of Cost Accountants of India); and

(v) A proof of permanent address which needs to be attached to the form. Bank statement, electricity bill, telephone / mobile bill which specifies the address of the director may be attached as address proof, provided that bank statement, electricity bill, telephone or mobile bill shall not be more than 2 months old.

Please remember that if you fail to file the Form DIR 3 – KYC by September 15, 2018, then the Ministry of Corporate Affairs shall mark your DIN as deactivated, and you will have to pay a fee of INR 5000 /- to file the form and reactivate your DIN.

For further details you can also refer to the FAQs on the Form DIR 3 – KYC issued by the Ministry of Corporate Affairs and the FAQs.

Click here to download the Form DIR 3 – KYC

Click here to download the Instruction Kit for Form DIR 3 – KYC

At LexStart we advise start-ups at various stages of growth on disclosure related compliances and non-disclosure arrangements. You can reach out to support@lexstart.in with any specific queries that you may have.


Disclaimer: Please note that the article above is for information purposes only and represents the views of the author and should not be construed as legal advice.

Directorship – Comply with MCA, KYC Guidelines

Ministry of Corporate Affairs (MCA), India would be conducting KYC (Know Your Customer) of Directors of all companies on an annual basis through a new e-form viz. DIR-3 KYC to be notified and deployed shortly with MCA.

Accordingly, every Director who has been allotted Director Identification Number (DIN) on or before March 31, 2018 and whose DIN is either (i) in ‘Approved’ status, or (ii) inactive due to disqualification of such Director would be mandatorily required to file form DIR-3 KYC on or before September 15, 2018 with MCA.

While filing the form, the Unique Personal Mobile Number and Personal Email ID of the Director would have to be mandatorily indicated and would be verified by One Time Password (OTP) to be sent to such Director’s registered mobile no.

The e-form should be filed by every Director using his own Digital Signature Certificate (DSC) with MCA and should be duly by a practicing professional (CA/CS/CMA).

Failure to comply with this provision will result in the DIN of such Director to be ‘Deactivated’ thus disqualifying such Director. Activation of DIN can then be done by paying requisite filing fees.

Condonation of Delay Scheme, 2018

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
  1. 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 year/s.

  1. 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.

  1. 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.
  1. 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.

  1. 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.

  1. 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.