Saturday, September 30

Meet Compliance Requirements or Face Action: MCA Warns Defaulting Directors

The Ministry of Corporate Affairs (MCA) has notified defaulting directors to file their pending statutory returns and meet compliance requirements under the Companies Act, 2013. It is also confirmed that such directors may have to face the axe if they don’t comply with the mandate. 

As per Companies Act 2013, every company is required to do annual filing with the Registrar of Companies (ROCs). There are certain requisites to be observed by the companies, non-compliance of which can lead to stringent penalties, prosecution / disqualification of directors or even company closure. 

To achieve the compliance objective, the ROCs are in the process of identification and flagging of directors who have been disqualified for failing to file annual returns and financial statements for three consecutive years i.e. 2015-16, 2016-17 and 2017-18. These defaulting directors have also been barred from using their director identification numbers (DINs) on MCA21 portal to file any e-forms. 

As per credible sources, the Registrar of Companies deregistered 2,26,166 companies during FY 2017-18 while it disqualified 3,09,619 directors. The present move by MCA is a part of the second drive where 2,25,910 companies have been identified for being struck-off under section 248 of the Companies Act. This can be seen as the government’s effort to put a check on shell companies and bogus directors. 

The warning by MCA is a sure sign that it is in no mood to be lenient with repeat defaulters thus ensuring that only genuine directors thrive in corporate ecosystem.

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