Press release on Companies Fresh Start Scheme, 2020 and LLP Settlement Scheme
Ministry of Corporate Affairs
30 March 2020
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, the
Ministry of Corporate Affairs, 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.
- 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.
However, the immunity is only against delayed filings in MCA 21 and not against any
substantive violation of law.
- Details of the both the Schemes may be perused from the Circulars dated 30.03.2020,
issued by the Ministry of Corporate Affairs.