Government extends the Company Law Settlement Scheme to November 15
The government extended the operation of the Company Law Settlement Scheme by a month, with the deadline now being November 15. At the end of August 2014, there were around 1.42 lakh companies that had not filed their annual returns or balance sheets for more than three consecutive years.
Company Law Settlement Scheme 2014
This scheme, introduced under the new Companies Act, allows companies that have failed to make their statutory filings to do so without attracting prosecution. This scheme initially had a time limit of two months wherein the defaulting companies had to meet the requirements by October 2014. This scheme condones lack or delay of filings by companies by granting immunity from prosecution to the companies and also, give them the advantage of reduced additional fees
Grounds for extension
The extension was granted by the Ministry of Corporate Affairs after requests from various stakeholders including the ICAI (Institute of Chartered Accountants of India).
The new Companies Act contains provisions that provide for stringent norms in dealing with defaulting entities. Even directors can be penalized through disqualification for failing to make the necessary annual filings. Also, the companies are penalized through higher additional fees and penalties.