MCA introduces the “Companies Fresh Start Scheme, 2020” and revised the “LLP Settlement Scheme, 2020” as a relief measure from COVID-19 for companies and LLPs
In order to provide relief to law-abiding companies and Limited Liability Partnerships (LLPs) from the COVID 19 impact, the Ministry of Corporate Affairs (MCA), has introduced the “Companies Fresh Start Scheme, 2020” and revised the “LLP Settlement Scheme, 2020”.Both schemes provide a one-time waiver of additional filing fees for delayed filings by the companies or LLPs with the Registrar of Companies (ROCs) during the period starting from 1st April, 2020 and ending on 30th September, 2020.
About Companies Fresh Start Scheme, 2020
To facilitate Indian companies to make a fresh start, MCA has taken certain alleviative measures for the benefit of all companies by exercising its power under section 460 & 403 of the Companies Act, 2013 and introduces the scheme “(CFSS-2020)” with effect from 1st April 2020 to 30th September 2020.
- It should be noted that Companies Act 2013 mandates all companies to make statutory compliance by filing Annual Return and Financial Statements along with various other documents on MCA21 electronic registry within the prescribed time limit. Under this scheme, stakeholders are granted with one-time opportunity to complete their pending compliances including annual filings without any additional fees on account of any delay. It also grants immunity for any prosecution or proceeding against the company for imposing any penalty on account of delay in filing documents.
- The Scheme also provides an opportunity to the inactive company to convert into a dormant company under section 455 of companies act, 2013 by filing form MSC-1 with nominal fees.
About LLP Settlement Scheme, 2020
On March 3, 2020, Ministry of Corporate Affairs (MCA) introduced a scheme namely “LLP Settlement Scheme, 2020” for limited liability partnership (LLPs) by allowing a one-time condonation of delay in filing statutorily required documents with the Registrar of Office (ROC). Now to further reduce their compliance burden certain modifications have been made in that. The modifications are:
- The scheme shall come into force from April 1, 2020, and remain till 30th September 2020.
- Applicability: Any defaulting LLP is permitted to file belated documents which were due for filing till August 31, 2020.
- The defaulting LLP which has filed belated documents till September 30, 2020 and made good the default shall not be subjected to prosecution by Registrar.