Black Money – Domestic and International Efforts

‘Condonation of delay scheme only for bona fide directors’

Note4students

Mains Paper 2: Governance | Government policies & interventions for development in various sectors & issues arising out of their design & implementation.

From UPSC perspective, the following things are important:

Prelims level: Condonation of Delay Scheme, Director Identification Number

Mains level: Measures being undertaken to curb illicit fund flows


Condonation of Delay Scheme

  1. The proposed scheme will provide a three-month window for defaulting companies to submit their filings
  2. It would be rolled out by the Ministry of Corporate Affairs
  3. It is to be operational from January 1 to March 31, 2018

Why this scheme?

  1. As part of clamping down on illicit fund flows, the corporate affairs ministry has disqualified more than 3.09 lakh directors of companies which failed to submit annual filings for a long time
  2. Following the move, concerns were raised that many directors of genuine companies have also been disqualified
  3. Besides, some individuals moved courts against their disqualification

Working of scheme

  1. Only bona fide directors will benefit from the proposed scheme
  2. The Director Identification Numbers of disqualified directors that have been deactivated would be ‘temporarily activated’ during the scheme period
  3. After submitting the filings under the scheme, a company concerned would have to file a separate form seeking condonation of the delay along with a fee of ₹30,000

Back2Basics

Director Identification Numbers

  1. Director Identification Number (DIN) is a unique identification number given to an existing or a potential Director of any company which is incorporated
  2. DIN came into existence after the insertion of the section 266A & 266B of the Companies Act, 1956 (as amended vide Act No 23 of 2006)
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