Coronavirus Outbreak: Govenment Comes Out With Schemes For ‘Fresh Start’ For Companies, LLPs

Seeking to provide a "fresh start" for companies and Limited Liability Partnerhips, the government on Monday extended the deadline for submitting filings without late fee till Sept. 30.

Besides, the entities would get immunity from penal proceedings with respect to delay in submission of requisite filings.

The introduction of fresh start scheme for companies and revision in settlement scheme for LLPs come against the backdrop of the coronavirus pandemic that has also resulted in disruption of business activities.

In a release, the corporate affairs ministry said the schemes are part of efforts to provide relief to law-abiding companies and LLPs in the wake of Covid-19.

"The fresh start scheme and modified LLP settlement scheme incentivise compliance and reduce compliance burden during the unprecedented public health situation caused by Covid-19," it said.

Both the schemes provide a "one-time waiver of additional filing fees for delayed filings" during the period from April 1 to Sept. 30.

The ministry is implementing the Companies Act and the LLP Act.

"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," the release said.

However, the immunity would be only against delayed filings in MCA 21 portal and not against any substantive violation of law.

Requisite filings to the ministry are made through the MCA 21 portal.