Govt extends deadline for CFSS, LLP schemes till the end of this year

The ministry of corporate affairs (MCA) has extended the deadline for the Companies Fresh Start Scheme (CFSS) and the LLP Settlement Scheme till the end of the year.

Both the schemes, aimed at improving compliance with regulatory filings, were ending on Wednesday.

The MCA had introduced the schemes in March that provided companies and LLPs with an opportunity to make good on any delays in filings and reduced the burden of additional fees to enable them to be fully compliant with the law.

The ministry also extended the deadline till December 31, for the scheme on relaxation of time for filing forms in relation to creation or modification of charges under the Companies Act.

Companies are required to file with the MCA the creation or modification of charges, which is when a company puts up its assets as security for a loan. Starting from June, this scheme was also ending on Wednesday.

Effective from April 1, the CFSS and the modified scheme for LLPs protected firms from penal proceedings by the Registrar of Companies, provided they made good on filing defaults, apart from the one-time waiver of additional late fees.

The immunity provided is only against delayed filings in the MCA-21 registry and not against any substantive violation of law.

This would enable firms with long standing defaults for which the accumulated burden of late filing fees ran into lakhs of rupees, to become compliant thereby providing them with a fresh start.

According to officials, the scheme would particularly benefit some 30,000 out of the 1.2 lakh LLPs in India.

It was aimed at those LLPs whose paid up capital was Rs 1 lakh but accumulated late fees reached Rs 5 lakhs or more making compliance prohibitive.

The relief scheme for LLPs will be applicable to overdue filings from October 31, 2019.

The waiver is eligible on the payments of Rs 10 per day of delay from the said date and only an additional fee of up to Rs 5,000 per document can be levied.

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