Over 1.7 million pending forms filed by 500,000 firms under MCA’s amnesty scheme
Some business entities that have not submitted all pending statutory requirements can still do so by paying some additional fee, one of the officials said
Over 1.7 million pending compliance-related forms have been filed online by about 500,000 companies and 100,000 limited liability partnership (LLP) firms that availed the extended deadline to make good their pending filing-related defaults till December 31, two government officials said.
The one-time amnesty initiative—Companies Fresh Start Scheme (CFSS) and the LLP Settlement Scheme (LSS)—without any additional fee of the ministry of corporate affairs (MCA), which was launched in March, 2020, was concluded on December 31, 2020, the officials said, requesting anonymity.
The scheme was initially effective from April 1, 2020 for six months. Later, the government extended it for another three months because of disruptions due to Covid-19 pandemic, they said. CFSS and LSS gave a one-time relaxation to such business entities that defaulted in filing statutory documents in the past. The government provided businesses a fresh start as fully compliant entities notwithstanding the duration of defaults.
Also Read: India considers creating bank with $13.7 billion equity capital to fund roads
It is possible that some business entities may not have submitted all pending statutory requirements such as appointment of directors, appointment of auditors, annual returns, annual balance sheet, compliance certificates and changes in shareholding position of promoters and top ten shareholders. They can still meet the salutatory obligations by paying some additional fee, one of the officials said.
“The initial deadline to avail the schemes was September 2020, which was extended to December 31, 2020 to provide relief to businesses because of the Covid-19 pandemic. As per the notification, the scheme is no longer available,” the officials said.
Some companies still want the government to extend the deadline by another three months. Some petitions have also been received for extending the deadlines further, but no decision has been taken on that, a second official said.
The Institute of Company Secretaries of India (ICSI) on December 24, wrote to the ministry of corporate affairs to extend the deadline from December 31, 2020 to March 31, 2021. But, the deadline was not extended. HT reviewed the letter. Email queries sent to MCA and ICSI did not elicit any response.
The first official quoted above said, “Those who could not comply in the nine-month period are unlikely to do so in another three months. Sincere firms have no reasons to worry as they can still file by paying some additional fee.”
One Delhi-based chartered account said, requesting anonymity, that the schemes gave companies a fresh start without additional costs. “No extension means huge additional costs to such companies, which could go up to 10 times of the normal fees. Some entities also faced problems in online filing because of connectivity issues and technical problems at the MCA-end,” he said.
The government official mentioned above said the online filing system is completely faceless and technically robust. “There is no excuse of technical glitches in the online filing. The system is functioning well. The robustness of the system can be assessed by the fact that over 160,000 forms were filed on December 31 alone,” the second official said.
Ankit Singhi, head, corporate law, at a legal and corporate advisory firm, Corporate Professionals Group, said, “It was indeed a very good scheme and with these numbers [1.7 million online filings], it seems, that it has been successful. Some companies could not have availed the scheme within the deadline as in the last couple of years, filing compliances have drastically increased. They are mainly small companies with limited resources, infrastructure and lack of advisory services. So they are seeking an extension.”
