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Defaulter Companies Status

Defaulter Company

Defaulter Companies Status

Defaulter companies are those companies in India that have not filed its annual return or balance sheet consequently for a few years. The list of defaulter companies, Defaulter Directors and Defaulter Company Secretaries list is published regularly on the MCA website. Also, while filing forms of a defaulter company, MCA website shows an error message, not allowing for filing of forms of the company or any related company. In this article, we look at the process for removing defaulter company status.

Defaulter Company Error Message

In case of continuous default in filing of annual return of a company, the MCA does not allow for the uploading of e-forms pertaining to the Company or any other related company, in which there are common Directors. The following error message is displayed on the MCA website while trying to upload:

“The Director signing the eform is also a director of a defaulting company which has not filed 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 eform for filing.”

In addition to the above, the names of the Directors, Company and Company Secretary are also published on the MCA websites as defaulters. Hence, it is best to complete the required compliances on a timely manner.

Defaulting Director

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

Rectifying Defaulter Status

To rectify the defaulter status, the company will have to file all the overdue annual returns and balance sheets. Once the annual return and balance sheets are filed upto date, the defaulting status of the company will be removed and the company will become active.