ICAI FAQs on LLP Settlement Scheme 2020

By | April 3, 2020
(Last Updated On: April 3, 2020)

Sub: Ministry of Corporate Affairs has issued Companies Fresh Start Scheme, 2020” and revised the “LLP Settlement Scheme, 2020 during the period starting from 1st April, 2020 and ending on 30th September, 2020.

The Ministry of Corporate Affairs in pursuance of the Government of India’s efforts to provide relief to law abiding companies and Limited Liability Partnerships (LLPs) in the wake of COVID 19, has introduced the “Companies Fresh Start Scheme, 2020” and revised the “LLP Settlement Scheme, 2020” which is already in vogue to provide a first of its kind opportunity to both companies and LLPs to make good any filing related defaults, irrespective of duration of default, and make a fresh start as a fully compliant entity. 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.

ICAI is happy to note that 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”.

Further, the scheme gives an opportunity to inactive companies to get their companies declared as ‘dormant company’ under section 455 of the Act by filing a simple application at a normal fee. The said provision enables inactive companies to remain on the register of the companies with minimal compliance requirements.

It may kindly be noted that the immunity is only against delayed filings in MCA 21 and not against any substantive violation of law.

In this regard, the Ministry of Corporate Affairs, Government of India, has issued the Circular on their website and the link for the same is as below:

For Companies Fresh Start Scheme, 2020 http://www.mca.gov.in/Ministry/pdf/Circular12_30032020.pdf

For LLP Settlement Scheme, 2020 http://www.mca.gov.in/Ministry/pdf/Circular13_30032020.pdf

ICAI has also prepared and issued FAQs on the Companies Fresh Start Scheme and LLP Settlement Scheme, 2020 (Original and Modified) for the benefit of its members and other stakeholder that are uploaded on ICAI website.

FAQs on the Companies Fresh Start Scheme are available at the link https://resource.cdn.icai.org/58908clcgc48020.pdf

FAQs on the LLP Settlement Scheme, 2020 (Original and Modified) are available at the link https://resource.cdn.icai.org/58902clcgc48009llpfaq.pdf

Members concerned are earnestly requested to kindly plan their filing accordingly.

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