Government Announces Relief Measures for Defaulter Companies

Now no worries for your long-standing compliance dues. You now have a well-deserved breather, thanks to the recent compliance incentives initiated by the Government. Want to know more? Here we go!

Schemes for law-abiding companies and LLPs

In a major relief to the businesses largely disrupted by the ‘claws’ of the Covid-19 pandemic, the Government has announced certain welcome measures. The Ministry of Corporate Affairs (MCA) has launched Fresh Start Scheme 2020 and revised LLP Settlement Scheme 2020 to help law-abiding companies and LLPs. These schemes offer an opportunity for these companies to make a fresh start and clear their compliance defaults. This is an initiative from the MCA to incentivize compliance and reduce the compliance burden of companies. Both these schemes can be availed during the moratorium period from 1st April to 30th September 2020. We will discuss these 2 schemes in details-

Companies Fresh Start Scheme 2020 (CFSS)

Government announces waiver of additional fee (including penalty) of up to Rs 107800 for 1 year and exempted forms are ADT-1, AOC-4, MGT-7, KYC and 22A Government announces waiver of additional fee (including penalty) of up to Rs 136900 for 2 years and exempted forms are ADT-1, AOC-4 – 1st year, AOC-4 – 2nd year, MGT-7 1st Year, MGT-7 - 2nd year, KYC and 22A Let’s see the other provisions of this scheme - For defaulting companies- They will need to pay only the normal fees for all statutory filings (in respect of any return, statement, document and so on) needed for complying with the MCA 21 registry. Any additional fee, whatsoever, has been waived off Immunity has been provided against proceedings and prosecution arising due to delayed filing only In case of an existing appeal by the company against any such proceedings and prosecution or any related order and notice thereof, the company must withdraw the aforesaid appeal, before registering under this scheme. In case the company has not filed an appeal (on the commencement of the scheme) against any such court order related to the delayed filing, it will be given 120 days to do so. No further action will be initiated against it during this period. Upon filing the CFSS-2020 form, the company will be given immunity up to 6 months after the date of closure of the scheme. The designated authority will issue the Immunity Certificate in this regard The company does not need to pay any fee with this form. For inactive companies They may apply for this scheme to file due documents They need to apply for dormant status by filing e-Form MSC-1, along with the fee prescribed The time period to file the e-Form ACTIVE has been extended till 30th September. The filing fee of Rs 10,000 has been waived off. B) Revised LLP Settlement Scheme 2020 The provisions mentioned in this scheme are as follows- This scheme is to benefit defaulting LLPs for whom filing of belated documents ( Form 3, Form 4, Form 8 and Form 11) is due till 31st August 2020 They will need to pay only the normal application fees for such filings. Any additional fee, whatsoever, has been waived off No proceedings and prosecution will be initiated by the Registrar against these LLPs if they complete the filing by 30th September 2020 LLPs who have applied for striking off their names from the Registrar will not be considered for this scheme. Upon the conclusion of this scheme, the Registrar will be free to take necessary actions against the defaulting LLPs who have not availed this scheme.

How does Arvisa help?

As a benefit of working with industry specialists, our team will keep track of all changes to the various relevant regulations and keep you up to date and compliant. Our accounting and compliance team will collaborate closely with you to identify all needs and ensure that the procedure is completed on time. Our experts will assist you in a broad spectrum of financial services that cover.