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Defaulter Companies Status

The companies that have not filed its balance sheet or annual return consecutively for few years in India are known as defaulter companies. Ministry of Corporate Affairs (MCA) website regularly publishes the list of defaulter companies status, Defaulter Company Secretaries list and the list of Defaulter Directors in India. If these companies try to file forms on MCA website then the website displays an error message prohibiting the filing of form by the defaulter company or any related company.

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Defaulter Company Error Message

As discussed above, the continuous default in filing of a balance sheet or annual return of a company can lead to an error message on the MCA website while trying to upload e-forms pertaining to the defaulter company or any other related company having common Directors. The following error message is displayed:
“The Director signing the e-form is also a director of a defaulting company which has not filed the due balance sheet and/or annual return. Hence the director is not allowed to file this form. Such defaulting company is required to file all the balance sheets, annual returns first, and then only the director will be allowed to sign the e-form for filing.”
Additionally, the MCA website also publishes the names of the company, directors and company secretary as defaulters. Hence, the best practice is to complete the required compliances within the stipulated time.

Defaulting Director

The directors of a company that has not filed its annual returns or balance sheet are defaulter directors and consequently, they are not allowed to file any form for any company with the MCA.

Rectifying Defaulter Status

In order to become an active company again and remove the defaulter status of the company, the company will be required to file all the overdue balance sheets and annual returns.

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Setindiabiz is an organized team of experienced CA, CS, & Lawyers, duly supported by a pool of trained accountants & paralegal staff that provides quality & affordable compliance services to startups & small businesses in India. The views, statements and recommendations expressed in this article or post are only for the sole objective of providing information, and it does not constitute professional advice or recommendation of the company. Neither the author nor the company or its affiliates accepts any liability for any loss or damage arising from any information in this article or any actions taken in reliance thereon.

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