MCA extends Companies Fresh Start Scheme, 2020, and LLP Settlement Scheme
- The Ministry of Corporate Affairs ( MCA ) has extended the Companies Fresh Start Scheme, 2020 till December 31st 2020 due to the COVID-19 pandemic.
- The MCA also extended the LLP Settlement Scheme, 2020 till December 31st 2020.
- The Ministry of Corporate Affairs had introduced a new scheme known as the Companies Fresh Start Scheme, 2020, valid from 01.04.2020 to 30.09.2020 to enable companies to make good their previous defaults. This Scheme has now been extended till 31.12.2020.
- The Fresh Start scheme and modified LLP Settlement Scheme incentivize compliance and reduce compliance burden during the unprecedented public health situation caused by COVID-19. 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.
- 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”. Both the Schemes also contain provisions for giving immunity from penal proceedings, including against imposition of penalties for late submissions and also provide additional time for filing appeals before the concerned Regional Directors against the imposition of penalties, if already imposed.
- As per the scheme, the defaulting company means a company defined under the Companies Act 2013 and which has made a default in filing of any of the documents, statements, returns, etc including annual statutory documents on the MCA 21 registry.