CA/CS advice required - DIN activation issues

CA/CS advice required - DIN activation issues

87°
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Deal Cadet
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450
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One of my relative got into this mess due to some obligation.

Company was registered with two directors, one old aged man and one young man.
After registering the company and getting the PAN, just before opening a bank current account, the old man passed away.
So, bank current account was not opened,

Since the young man is the only director for that company, he did not do any business and ignored the company for four years.
He did not file any tax returns for the company. After one year of company registration, the KYC of both DINs expired.
So both the DINs of young man and the old man (who passed away) are in inactive state. But the company is still in active state according to Ministry of Corporate Affairs (MCA), since MCA was not informed by the auditor.
Auditor also completely ignore this comapny.
Now the young man wants to either revive the old company or register new company with another partner.

When he approached the couple of CAs, they told him that he needs to do KYC of his DIN which costs Rs5000.
Add one more director after informing the MCA.

BUT they dont know what will happen to the company as there are not tax filing for the company for last three years. They dont even know how much penalty to be paid for not filing the tax returns intime.

These CA/CS are not equipped with good knowledge, when it is out of the regular process.

Can any one comment on below options?

1)Closing the company : How much it costs? What is the procedure step by step?
2)Reactivating the company: How much it cost? What is the procedure step by step?

17 Comments  |  
3 Dimers
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Deal Subedar
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1.Status of your company on MCA shall be Active non compliant
2. If company not filed annual returns for continues 3 years then director shall be disqualified from all company other than disqualified company as per section 164 (2)
3. In your case number of directors falls below 2 you have to increase number of directors by 2 within 6 months. You have to add director from back end process of roc.
4. Either strike off company and incorporate new one if roc strike off your director will disqualified to appoint as directors from all the companies for period of 5 years

Suggestion – Due to too much amendments in companies Act 2013 chartertend account may not have knowledge of companies Act better you shall consult good practicing company secretary firm

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Deal Cadet
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I am a ca final student and has some experience in openings and closures of co.So I think I can help u wid this to the knowledge and practice I have imparted…bro I ll let u know in layman terms and not confuse u wid law jargons…the co. didn’t file the returns for the past 4yrs…So u r saying the status is active..I would say it is actively non complaint…Frankly ur young man has 2 options either wait till roc striking off the co.and mark him a disqualified director for a period of 5yrs or he shall ask his auditor(if appointed and notified to mca under form ADT 1 if not again this will be a problem) he will be left with filing of 2 forms namely ADT 4 and MGT 7 for the past four yrs as u said no operations so nil returns can be filed…but he still have to pay penalties around 1.8 lacs totally for the past 4yrs ( considering 22600 for each form a yr so two forms would amt to 45200 ..then he can close the co.thru FTE (fast track exit) format ….the non filing of returns is an offence and law doesn’t care if it is out of negligence or he was ignorant of law…once he become a director it expects that he had understood all terms in their sense…and lastly this young man has one chance ( I would say not of much use but to ur knowledge)….getting co.striked off by roc and roc issues a show cause notice asking him to explain why he didn’t file…but that all doesn’t work fine…he shld have some awesome reason and proof…hoping I was of some help to u..

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Deal Subedar
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1. Bro DIR 3 KYC is yearly activity if DIR 3 kyc is not done roc penalty is 5k per DIN

2. ADT 1 is for appointment of Auditor not require to file every year it is valid for 5 year (Auditor terms of appointment is 5 year)

3. Fees/penalty you calculate is totally incorrect.

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Deal Subedar
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https://cdn0.desidime.com/attachments/photos/607434/original/Screenshot_20200307-170306.png?1583580902Penalty for late filing of one year for form MGT 7 same is for AOC 4

Better consultant good practicing company secretary and do Compounding they will guide properly.

Missing
Deal Cadet
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Gujjubhai99 wrote:


https://cdn0.desidime.com/attachments/photos/607434/original/Screenshot_20200307-170306.png?1583580902Penalty for late filing of one year for form MGT 7 same is for AOC 4

Better consultant good practicing company secretary and do Compounding they will guide properly.

Thanks. I have NOT found any GOOD CS out of few CSs I have consulted.
But according to you how much it would cost to either close it OR revive it?

Also, how about considering it as startup company and keeping it as dormant company?

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vivek7460 wrote:

I am a ca final student and has some experience in openings and closures of co.So I think I can help u wid this to the knowledge and practice I have imparted…bro I ll let u know in layman terms and not confuse u wid law jargons…the young man need not spend 5000 for DIN’s first of all so Max 2000 for 2 ppl that’s it…and then as the co. didn’t file the returns for the past 4yrs…So u r saying the status is active..I would say it is actively non complaint…Frankly ur young man has 2 options either wait till roc striking off the co.and mark him a disqualified director for a period of 5yrs or he shall ask his auditor(if appointed every yr and notified to mca under form ADT 1 if not again this will be a problem) so expecting the young man has at least cared to mention his appointment every yr to mca then he will be left with filing of 2 forms namely ADT 4 and MGT 7 for the past four yrs as u said no operations so nil returns can be filed…but he still have to pay penalties around 1.8 lacs totally for the past 4yrs ( considering 22600 for each form a yr so two forms would amt to 45200 and if he has not filed ADT 1( auditor appt every yr ) then addn 3900 every year…then he can close the co.thru FTE (fast track exit) format ….the non filing of returns is an offence and law doesn’t care if it is out of negligence or he was ignorant of law…once he become a director it expects that he had understood all terms in their sense…and lastly this young man has one chance ( I would say not of much use but to ur knowledge)….getting co.striked off by roc and roc issues a show cause notice asking him to explain why he didn’t file…but that all doesn’t work fine…he shld have some awesome reason and proof…hoping I was of some help to u..

You are going to be CA. Thats great but how about re-reading what you wrote and re-checking the content?

1)It is not readable.
2)Few are wrong, for example DIN KYC costs Rs5000. I am 100% sure about it as I went through MCA website.
Please re-check the contents again.You can ignore my reply too, if you are not interested.

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ramadesidime wrote:

You are going to be CA. Thats great but how about re-reading what you wrote and re-checking the content?

1)It is not readable.
2)Few are wrong, for example DIN KYC costs Rs5000. I am 100% sure about it as I went through MCA website.
Please re-check the contents again.You can ignore my reply too, if you are not interested.

Sry for that buddy I was having digital signature in my mind..At out office we charge 1000 per DSC so that was running in my mind..And the rest as far as my knowledge is concerned the penalty was an approx figure and may slightly differ…and if u find a solution kindly reply to this msg…coz I am a student and love to learn if there are better alternatives…

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vivek7460 wrote:

Sry for that buddy I was having digital signature in my mind..At out office we charge 1000 per DSC so that was running in my mind..And the rest as far as my knowledge is concerned the penalty was an approx figure and may slightly differ…and if u find a solution kindly reply to this msg…coz I am a student and love to learn if there are better alternatives…

Ok, please re-arrange the sentences for readability. Its very difficult to read.

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Deal Cadet
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So, according to @vivek7460 and @Gujjubhai99 , the company needs to pay the penalty of more than 2lakhs of rupees.

I think, that is a stupidity to pay penalty of 2L for the abandoned company, which never started.

According to me below are the options for the young man.

Option1)
How about converting this to dormant company ?

Option2)
How about resigning the directorship by the young man by sending email/letter to company address and then forward the same to ROC?
(Let the company be in the name of the expired person and let ROC catch hold of him for violating the rules)
Now the young man is free to join any other company as director, is it right?

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Deal Cadet
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Hi @ramadesidime
Option 1 – non compliances come with a higher Cost then compliances…the roc shall either strike off his co. Or put his co.in dormant status and then his directorship would be affected…
Option 2- it’s not possible sir…. everything is online now..If u want to apply for resignation..While filling of resignation form there shld be at least 2 directors still continuing even after his resignation…so there shld be a 3rd person as a director then the system accepts this young man’s resignation… otherwise a blatant no

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Deal Cadet
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Sir I would say ask a CS…if u don’t want to shell out huge money as their fees there are sites like vakeel,wazeer…which offer first consultation either free or at a nominal fee…U can get better options from them…and plz don’t forget to ping me with the solution… thanks

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Gujjubhai99 wrote:

1. Bro DIR 3 KYC is yearly activity if DIR 3 kyc is not done roc penalty is 5k per DIN

2. ADT 1 is for appointment of Auditor not require to file every year it is valid for 5 year (Auditor terms of appointment is 5 year)

3. Fees/penalty you calculate is totally incorrect.

I am sry I rectified the din and adt1 issue in my answer…And regarding the penalty my calculations may be wrong but considering aoc 4 and mgt7 late filing penalties.the amt shld be around the figure I mentioned…anyways thanx for pointing out the mistakes bud.

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Deal Subedar
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ramadesidime wrote:

So, according to @vivek7460 and @Gujjubhai99 , the company needs to pay the penalty of more than 2lakhs of rupees.

I think, that is a stupidity to pay penalty of 2L for the abandoned company, which never started.

According to me below are the options for the young man.

Option1)
How about converting this to dormant company ?

Option2)
How about resigning the directorship by the young man by sending email/letter to company address and then forward the same to ROC?
(Let the company be in the name of the expired person and let ROC catch hold of him for violating the rules)
Now the young man is free to join any other company as director, is it right?

Director will be disqualified from all companies other than this company. if company not filed annual returns for continues 3 year it is already triggered.

Missing
Deal Cadet
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vivek7460 wrote:

Hi @ramadesidime
Option 1 – non compliances come with a higher Cost then compliances…the roc shall either strike off his co. Or put his co.in dormant status and then his directorship would be affected…
Option 2- it’s not possible sir…. everything is online now..If u want to apply for resignation..While filling of resignation form there shld be at least 2 directors still continuing even after his resignation…so there shld be a 3rd person as a director then the system accepts this young man’s resignation… otherwise a blatant no

Vivek,

Dormant status is better which can be revived without any fee. Check the MCA website.
Can we put the non-compliance company in to dormant state now by requesting ROC ? I dont know.
This is the point we need to search.

According you, one director can not resign if there are only two directors.
I doubt it, because, if it is the case, MCA would have put minimum directorship for any company to be 3.

There is nothing on earth which can stop a person to resign from his employment or directorship. If one resigns, it is the other director’s headache to inform ROC through auditor.

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Gujjubhai99 wrote:

Director will be disqualified from all companies other than this company. if company not filed annual returns for continues 3 year it is already triggered.

Got it. It make sense.

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ramadesidime wrote:

Vivek,

Dormant status is better which can be revived without any fee. Check the MCA website.
Can we put the non-compliance company in to dormant state now by requesting ROC ? I dont know.
This is the point we need to search.

According you, one director can not resign if there are only two directors.
I doubt it, because, if it is the case, MCA would have put minimum directorship for any company to be 3.

There is nothing on earth which can stop a person to resign from his employment or directorship. If one resigns, it is the other director’s headache to inform ROC through auditor.

Hi,
In order to push a co. Into dormant state or at least while reviving the co. Back from it and closing it at any stage u r ought to file ur returns..
Regarding the director issue sir it is min requirement of Pvt ltd co. To have at least 2 directors at any pt.of time.You are right nothing could stop a person from resigning but as per companies act 2013 in order a director wants to step down first the co. Has to fill the position i.e add a new director and then the other person can step down…In simpler terms even if u try to remove system doesnt allow u to do so…it will slam an error…I am pretty sure with the second issue that whatever ur planning can’t be done…But I don’t have much knowledge regarding first issue i.e dormancy status…but I can say at least that at some pt. U would still have to file returns and if neglected that would affect this man’s directorship…

Missing
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450
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vivek7460 wrote:

Hi,
In order to push a co. Into dormant state or at least while reviving the co. Back from it and closing it at any stage u r ought to file ur returns..
Regarding the director issue sir it is min requirement of Pvt ltd co. To have at least 2 directors at any pt.of time.You are right nothing could stop a person from resigning but as per companies act 2013 in order a director wants to step down first the co. Has to fill the position i.e add a new director and then the other person can step down…In simpler terms even if u try to remove system doesnt allow u to do so…it will slam an error…I am pretty sure with the second issue that whatever ur planning can’t be done…But I don’t have much knowledge regarding first issue i.e dormancy status…but I can say at least that at some pt. U would still have to file returns and if neglected that would affect this man’s directorship…

@vivek7460
So in this case, how to add third director?
Can this young director add one more director on his own without signature from the second director? How does the system treat this?

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