EXTENSION OF VARIOUS COMPLIANCES BY THE MINISTRY OF CORPORATE AFFAIRS

The Ministry of Corporate Affairs has made a further effort to encourage a greater deal of “Ease of doing business”, the Ministry of Corporate Affairs has enhanced the timeline regarding the duration of several schemes till the end of the year 2020 in the wake of constant disturbance caused by the coronavirus pandemic in certain parts of the country. 

The Union Finance Minister in early 2020, introduced various schemes like Companies Fresh Start Scheme 2020 and LLP Settlement Scheme and was to be effective from valid from 1 April 2020 to 30 September 2020, has been announced to be extended vide Circular No.30/2020, 31/2020, 32/2020 and 33/2020 on 28.09.2020 with a view to provide a new opportunity to the existing companies by resolving their defaults with no extra fee payment and regularise their companies.

Similarly, MCA has also extended the scheme for giving further time for filing forms related to the creation or modification of charges under the Companies Act, 2013, and the time for conducting EGMs through video conference or other audio-visual means has also been extended till December-end for the year 2020.

Following are the important notifications announced and notified through circulars as following-

1.    The Ministry of Corporate Affairs has extended the duration of several schemes till 31.12.2020 in view of the continued disruption caused due to the COVID-19 pandemic in certain parts of the country and to provide greater “Ease of Doing business”.

2.    The Ministry of Corporate Affairs had earlier introduced a new scheme known as Companies Fresh Start Scheme, 2020 valid from 01.04.2020 to 30.09.2020 to enable companies to make good their previous defaults. The scheme has now been extended till 31.12. 2020.

3.    The MCA had also introduced a new scheme is known as the LLP Settlement, 2020 which was valid from 01.04.2020 to 13.06.2020 and was later extended till 30.09.2020. This Scheme has further extended to 31.12.2020 to enable LLPs to make good their previous defaults.

4.     The Scheme for relaxation of time for filling forms related to creation or modification of charges under the Companies Act, 2013, and time for conducting Act, 2013, and the time for conducting EGMs through Video Conference or Other Audio-Visual Means also stand extended till 31.12.2020.

Therefore, the MCA on 28.09.2020, vide various circulars and notification extended the date of various schemes to 31.12.2020 which were launched for ease of doing Business, Schemes extended are as follows:-

1. Companies Fresh Start Scheme, 2020

2. LLP Settlement Scheme, 2020

3. Scheme for relaxation of time for filing forms related to Creation or Modification of Charges

4. Allowed companies to conduct their EGM through VC or OAVM or transact items through Postal Ballot as per the framework provided in the MCA circular earlier.

5. Extension of time within which Independent Directors of companies have to register themselves on the databank maintained.

What is the CFSS and LLP Settlement Scheme? How can it be availed?

As a result of the receipt of multiple representations from various stakeholders for granting this time opportunity to make the default good, the Ministry of Corporate Affairs (MCA) had vided circular no.12/20 has notified a scheme for the companies registered in India who have defaulted in filing necessary documents & returns in the past, giving them an opportunity to correct their mistakes without having to go through any prosecution or payment of any hefty sum as penalty.

This scheme was made effective from 01.04.2020 and has been extended till 31.12.2020 in effect.

Applicability of the Scheme/Schemes-

The CFSS scheme shall be available for the companies who have defaulted in filing necessary documents, statements & returns on the MCA 21 registry in compliance with the necessary provisions of the Companies Act 2013. Such companies have been given a golden opportunity to file such belated documents in accordance with the provisions of the scheme.

Whereas, The LLP Settlement Scheme 2020 intends to allow a One- Time condonation of delay in filing statutory documents with the Registrar. The LLP Settlement Scheme 2020 has been announced in pursuance of the government’s aim for providing greater ease of business for the businessmen country and is expected to provide significant relief and a window of opportunity for LLPs to abide by the law and conduct business accordingly.

Conclusion:

Therefore, the year 2020 could truly be called a year of improvements and resolutions for the “Ease of Doing business “and related objectives on the part of Government. The Government of India through the Ministry of Corporate Affairs (MCA) several measures in the year 2020 to promote ease of doing business in India as a result of the receipt of multiple requests from such genuine businessmen, the MCA had launched the Companies Fresh Start Scheme 2020 as well as schemes like LLP Settlement Scheme 2020 and further extensions in maintaining various compliances under the Act for the purpose of providing provide a golden opportunity to regulate the older compliances and later to follow them regularly every year before 30th of September, has been further extended to now 31st December 2020, inability to meet them will lead to “default companies “ exposure under normal provisions of penalty and prosecution which may/may not lead to dissolution and striking off of the company.

Author:

eStartIndia Team