Extension of due date for CFSS & LLP Settlement Scheme
Table of Contents
Companies Fresh Start Scheme, 2020 (CFSS)
Companies Fresh Start Scheme, 2020 (CFSS) is one-time opportunity for companies to complete old non-compliances. Extension of due date for CFSS & LLP Settlement Scheme
MCA has given opportunity to defaulting companies to file belated ROC forms without any additional late fees.
LLP Settlement Scheme 2020 (LLPSS)
LLP Settlement Scheme 2020 (LLPSS) is one-time windows for LLP to correct the default in statutory filings. MCA has given opportunity to defaulting LLP to file belated ROC forms without any additional fees.
Table of content:
- ICSI representation to extend CFSS (24 December 2020)
- NCLTBA representation to extend CFSS (03 January 2021)
ICSI representation to extend CFSS, LLPSS
THE INSTITUTE OF COMPANY SECRETARIES OF INDIA
IN PURSUIT OF PROFESSIONAL EXCELLENCE
Statutory body under an Act of Parliament
(Under the jurisdiction of Ministry of Corporate Affairs)
MCA: December: 2020
24th December 2020
Shri Rajesh Verma, IAS, Secretary
Ministry of Corporate Affairs, Government of India
Shastri Bhawan, Dr.Rajendra Prasad Road, New Delhi -110001
Subject: Request for extension of timelines due to COVID-19-reg.
Respected Sir,
We extend our heartfelt gratitude towards to the Ministry of Corporate Affairs (MCA) for having extended various relaxations to the corporate and other stakeholders in the times of Covid 19. As you are kindly aware that impact of Covid 19 pandemic is not yet over and the stakeholders are still facing significant challenges in undertaking the functions smoothly.
Considering the ongoing situation, we request you to consider further relaxation in due dates of the following compliances:
| Sl No | MCA Notification / Circular no. & Date | Detail | Suggestion |
|---|---|---|---|
| 1 | General Circular No. 12/2020 dated 30th March, 2020General Circular No. 30/2020 dated 28th September, 2020 | Companies Fresh Start Scheme, 2020 (CFSS- 2020) The Companies Fresh Start Scheme was introduced on the 1st April, 2020. The scheme offered one-time opportunity to the defaulting companies to file the pending documents without charging higher additional fees on any delay with the MCA. The said scheme was extended till 31st December, 2020. | The scheme may extended upto 31st March, 2021. |
| 2 | General Circular No. 13/2020 dated 30th March, 2020General Circular No. 31/2020 dated 28th September, 2020General Circular No. 37/2020 dated 9th November, 2020 | LLP Settlement Scheme, 2020 The LLP Settlement Scheme was introduced on the 1st April, 2020. The scheme offered one-time opportunity to the defaulting LLPs to file the pending documents without charging higher additional fees on any delay with the MCA. The said scheme was extended till 31st December, 2020. | The scheme may extended upto 31st March, 2021 and accordingly the due date for filing belated documents may be extended |
| 3 | General Circular No. 23/2020 dated 17th June, 2020 General Circular No. 32/2020 dated 28th September, 2020 | Scheme for relaxation of time for filing forms related to creation or modification of charges under the Act The scheme is available which granted relaxation in filing of Form No. CHG-1 and Form No. CHG9 by a company or a charge holder which has been extended till 31st December, 2020. | The period may be extended upto 31 st March, 2021. |
| 4 | MCA Notification no. GSR 186 (E) dated 19th March, 2020 MCA Notification no. 395(E) dated 23rd June, 2020 MCA Notification no. G.S.R. 590(E) dated September 28, 2020 | Holding Board Meeting through Video Conferencing In terms of the provisions of Rule 4 of the Companies (Meetings of Board and its Powers) Rules, 2014, certain matters at the Board Meeting shall not be dealt with in any meeting through video conferencing or other audio-visual means. The said provisions were relaxed and such matters were allowed to be conducted through Video Conferencing till 31st December, 2020. | This relaxation may be extended up to 31st March, 2021. |
| 5 | General Circular No. 14/2020 dated 8th April, 2020 General Circular No. 17/2020 dated 13th April, 2020 General Circular No. 22/2020 dated 15th June, 2020 General Circular No. 33/2020 dated 28th September, 2020 | Companies to hold EGMs or transact business through postal ballots through VC or OAVM The MCA has allowed companies to conduct their EGMs through VC or OAVM or transact items through postal ballot in accordance with the framework provided in the Circulars upto 31st December, 2020. | This relaxation may be extended up to 31st March, 2021 |
We hope that the above submissions which are on account of the difficulties and hardship faced by the stakeholders would be considered favorably. We shall be pleased to provide any further information in this regard on hearing from your goodself.
Thanking You,
Yours faithfully,
(CS Asish Mohan)
Secretary
NCLTBA representation for extension of due date for CFSS
National Company Law Tribunal Bar Association (NCLTBA)
E -2, (LGF), Kailash Colony, New Delhi — 110 048
Tel: +11 41039797-98
Email :ncltbarassociation@gmail.com
03.01.2021
Smt. Nirmala Sitharaman
Hon’ble Minster for Finance
and Minster of Corporate Affairs
Misntery of Coporate Affairs
3rd Floor, Shatri Bhawan
New Delhi 110001
Representation for further extension of Companies Fresh Start Scheme (CFSS) 2020
Respected Madam,
The Ministry of Corporate Affairs introduced several schemes {Companies Fresh Start Scheme, 2020 (CFSS) General Circular No. 30/2020, LLP settlement Scheme 2020 General Circular No. 31/2020, Scheme for relaxation of time for filing forms related to creation or modification of charges under the Companies Act, 2013 General Circular No. 33/2020 and Clarification on holding of annual general meeting (AGM) through video conferencing (VC) or other audio visual means (OAVM) General Circular No. 32/2020} valid from 01.04.2020 to 30.09.2020 to enable companies to complete their pending compliances. The same was extended till 31.12.2020.
It is pertinent to note that the said schemes were launched for ‘ease of doing business’ and ‘compliance’ and the same was the need of the hour and much appreciated. However, due to the sudden outbreak of Covid-19 and lockdown as announced by the Govt. of India and for several other reasons the benefit of the said scheme could not be taken by various stakeholders. Some of such reasons are as follows
A. Pendency of revival applications u/s 252 of Companies Act, 2013 — Several Companies have filed revival application and the same were pending before the various benches of Hon’ble NCLT all over India. After the announcement of lockdown all physical hearings of the matters were deferred and only hearing of urgent matters was taken up by NCLT. The NCLT has only started hearing of regular matters from 01.12.2020. During the said time hearing of urgent matters was not taken up and so the hearing of revival matters was not taken up on urgent basis. Only few matters in which urgent application was filed were taken up. Due to the same revival of company was not complete and the benefit of CFSS was not taken up. Some other instances on the said issue , due to which benefit of CFSS was not taken up were as follows :
1. NCLT not taking up regular hearing of revival matters as prior to 01.12.2020, only urgent matters was being taken up by NCLT.
2. Delay in reports of Income Tax Department and the Report from respective ROC’s in the said revival matters u/s 252 of the Act- In several matters the govt. department like Income Tax and ROC has not filed their report on time. Especially the Income Tax department owing to be scattered all over the country has not been filing reports on time thereby delaying the hearings in the matter.
3. Shortage of Hon’ble Members and several Hon’ble Members being working from outstation has led to delay in finalisation of order and receipt of orders by the companies.
4. Due to pandemic situation even staff of NCLT was not in full force, leading to delay in receipt of orders.
5. Certified copy was difficult to receive for ROC filing owing to pandemic&social distancing norms being followed, leading to delay in the filing of documents.
6. In several cases, the Hon’ble NCLT has imposed cost to be deposited in PMNRF, however challans of such cost deposited also takes days to be generated and thus the same leads to delay in compliance for revival. The same was noticed especially in last working days of NCLT prior to 24.12.2020, thus the benefit of CFSS could not be taken till 31.12.2020.
7. Hon’ble NCLT has priority of several matters like Insolvency matters under IBC, 16 and other urgent Company matters and due to infrastructural difficulties, at times disposal of revival matters takes time, thus leading to delay.Several matters of revival u/s 252 are still pending before NCLT Benches.
Apart from the above difficulties being faced by Hon’ble NCLT, there have been several other reasons due to which the benefit of the scheme has not been availed.
B. Difficulty of Director Identification Number (DIN) :
1. DIN of lakhs of directors are still deactivated on account of non-filing of annual returns which makes it difficult to carry on business
2. Activation of DIN through was based on seeking benefits from the CFSS, however the same could not be achieved so;
C. Lockdown and Pandemic:
1. The scheme was launched from 01.04.20, which was the during the period of lockdown. Due to the same, for several months situation of lockdown continued or people were working from home. Ready documents could not be preceded with clients and thus finalising the Accounts and making of the Balance Sheets and complying with the GST issues due to which the Balance Sheets got delayed and still are in finalisation stage.
2. Several offices were closed and / or Limited staff was working, thus the same could not be complete.
3. In many cases the filings of the previous year are pending because of financial crunch and the people wanted to take the benefit of the same but due to pandemic the same could not be done.
4. Delay in Change of Status from ROC for Strike off to Active.
D. Technical glitches on MCA Portal:
Portal has not been working normally for whole of December 2020 with either SRN not getting generated despite amount getting debited or not going at all.
Even the site did not respond to sending email on gmail and sometimes on a particular Mobile Network making impossible to get the OTP’s and get the KYC done
E. Huge Financial burden on the companies: As the Balance Sheets have not been finalised due to Pandemic, it was not at all possible to file Form DPT 3 as the figures were not available. By not extending the scheme, huge penalties will be levied on the companies who are already bearing the brunt of Pandemic.
F. Prosecution on the Directors: Facing prosecution as compliance cost will be very exorbitant and beyond the paying capacity. The same would also lead to increase in litigation.
In these circumstances, though the intention behind the CFSS, 2020 is laudable and much appreciated. However, due to the various ground realties the corporates have not been able to take benefit of the scheme. Therefore in these difficult times the extension of such schemes is imperative and paying such hefty penalties & fines will not be in best interest of all stakeholders.
Thus we request your good office to extend the CFSS, 2020 and other related relaxations till 31.03.2021 in the interest of all stakeholders
Extension of due date for CFSS & LLP Settlement Scheme
Also read:
SEBI SETTLEMENT SCHEME 2020 EXTENDED TILL 31.12.2020
CBDT Circular 08/2021 30th April 2021 -Relaxation on filing dates
Extension of due date for filing ITR & TP/Tax Audit report for AY 2020-21
