The Corporate Affairs Ministry (MCA) has come up with the ‘Companies Fresh Start Scheme 2020’ to enable companies to make good of any filing-related defaults, irrespective of the duration of default, and make a fresh start as a fully compliant entity.
To provide a similar facility to Limited Liability Partnerships (LLPs), the MCA has also revised the ‘LLP Settlement Scheme, 2020’, which is in vogue today.
The Fresh Start scheme and modified LLP Settlement Scheme reduce compliance burden during the unprecedented public health situation caused by Covid-19, an official release said.
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 April 1 and ending on September 30, the release added.
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 provision 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 imposition of penalties, if already imposed.
However, the immunity is only against delayed filings in MCA 21 and not against any substantive violation of law, the release added.