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Relaxations for the Companies and LLPs to make good any filing related defaults, irrespective of duration of default, and make a fresh start as a fully compliant entity by 30th September, 2020. - (21-05-2020)

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Sub: Relaxations for the Companies and LLPs to make good any filing related defaults, irrespective of duration of default, and make a fresh start as a fully compliant entity by 30th September, 2020

Stay Safe and Stay Healthy!!

As we all know that COVID 19 is an unprecedented crisis and challenge which is currently being faced by the whole World. Amidst the spread of the pandemic and the imposition of lockdowns, there are various challenges before all the stakeholders in the corporate world.

In order to support and enable Companies and Limited Liability Partnerships (LLPs) in India to focus on taking necessary measures to address the COVID-19 threat, including the economic disruptions caused by it, the Ministry of Corporate Affairs has given several relaxations and Special measured have been provided to reduce their compliance burden and other risks.

The Ministry of Corporate Affairs in pursuance of the Government of India’s efforts in the wake of COVID 19, has introduced the “Companies Fresh Start Scheme, 2020” and revised the “LLP Settlement Scheme, 2020”.

ICAI being closely working with MCA, is happy to note that the Schemes, apart from giving longer timelines for corporates to comply with various filing requirements under the Companies Act 2013 and LLP Act, 2008, significantly reduce the related financial burden on them, especially for those with long standing defaults, thereby giving them an opportunity to make a “fresh start”.

The USP of both the schemes is a one-time waiver of additional filing fees for delayed filings by the companies or LLPs with the Registrar of Companies during the currency of the Schemes, i.e. during the period starting from 1st April, 2020 and ending on 30th September, 2020.

In this regard, ICAI has also issued FAQs on the Companies Fresh Start Scheme and LLP Settlement Scheme, 2020 (Original and Modified) for the benefit of its members and other stakeholders to give them clarification on the Schemes and issues, if any.

FAQs on the Companies Fresh Start Scheme are available at the link https://resource.cdn.icai.org/58908clcgc48020.pdf

FAQs on the LLP Settlement Scheme, 2020 (Original and Modified) are available at the link https://resource.cdn.icai.org/58902clcgc48009llpfaq.pdf

Further, ICAI has also organised a Webcast which was addressed by the officials of MCA wherein the queries were also answered by them. Frequently Asked Questions on LLP Settlement Scheme, 2020 and Company Fresh Settlement Scheme, 2020 issued by the Ministry of Corporate Affairs are available at the Link: http://www.mca.gov.in/Ministry/pdf/FAQCFSS_15042020.pdf

This is to mention here that MCA has given relaxation that the DIN holders marked as “Deactivated” and companies marked as “ACTIVE non-compliant” can become compliant once again.

Other Relaxations are related to holding Board meeting/ AGM/ EGM through Video Conference, dispatch of notice for rights issue and Extension of Period/Days for Names Reserved and Re-submission of Forms

This is the time when the Companies and LLPs can utilize this opportunity given by the Government and they can make good any filing related defaults, irrespective of duration of default, and make a fresh start as a fully compliant entity.

Hope the members will take note of the schemes and motivate the promoters to avail the benefit of schemes and have a fresh start.


President, Institute of Chartered Accountants of India

     
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