What is scheme MCA21? And how does it affect your company? Let’s find out. MCA21 is a special type of statutory compliance scheme for existing companies that have defaulted on their filing requirements. This scheme is operational from 1 April 2020 till 30 September 2020. Under this scheme, companies can file their compliance without penalty, get immunity from prosecution, and even apply for dormant status and strike-off.
Companies Fresh Start Scheme
The Companies Fresh Start Scheme (CFSS) was launched on 30 March 2020 pursuant to General Circular No. 12/2020. It is a one-time opportunity for defaulting companies to make up the missed deadlines for filing their documents. The CFSS allows such companies to file their belated documents without incurring any additional fees. However, some types of belated documents are excluded, such as those related to the creation or modification of a charge.
Under the scheme, a company that has missed its annual report may file the documents later and avoid heavy penalties. The ROC will confirm the issuance of the immunity certificate and the company will not be penalized. It is important to note that filing a CFSS-related document late may be an inconvenient process for some companies, but it can be avoided with the MCA-21 scheme. Moreover, filing a CFSS-compliant document is free of charge under the MCA-21 scheme.
The COVID-19 pandemic has created unprecedented health and safety situations in the country. The Ministry of Corporate Affairs has taken this crisis into consideration and has announced the Company Fresh Start Scheme MCA21. The CFSS provides relief to companies in distress due to default. Companies can apply for this scheme if they have been inactive for a long time and have failed to comply with various regulations. The CFSS also allows companies to register any outstanding records.
LLP Settlement Scheme
The MCA21 or the LLP Settlement Scheme has provided breathing space to LLPs and inculcated a few changes in the MCA21. These changes give law-abiding companies a fresh start and a chance to correct their filing related defaults. However, the changes will not bring back the days of recalcitrant LLPs. The LLP Settlement Scheme, 2020 will help law-abiding companies to get their filings in order.
The LLP Settlement Scheme MCA21 allows defaulting LLPs up to the end of this calendar year to make good on any outstanding documents. But, this extension is only effective if they file their documents on or before August 31, 2020. If they file their documents on or before March 31, 2020, they won’t be prosecuted by the Registrar. But, what if they are not in default? How do they file?
As a result, there are several reasons to opt for the LLP Settlement Scheme, 2020. First of all, it will reduce the number of LLPs that have to go through the formalities. In addition to making filings easier, this scheme will give defaulting LLPs a one-time window to comply with all the applicable laws. By opting for the LLP Settlement Scheme, 2020, they’ll no longer have to pay additional fees. They can also serve as a compliant LLP in the future.
MCA21
The Ministry of Company Affairs (MCA) has launched the MCA21 scheme as part of its mission mode projects to transform the business environment. This initiative is aimed at automating the processes related to the Companies Act, 1956. The MCA21 scheme will make business transactions more transparent and streamline compliance processes. The goal of the MCA21 project is to fully automate compliance processes and help the business community meet statutory obligations. The MCA21 website is a key part of this new initiative.
The MCA21 scheme will be a digital system, allowing citizens to file their applications electronically at the MCA21 portal and through the PFO. The e-filing process eliminates the need for physical visitation to the MCA offices. The convenience of electronic filing allows citizens to file their applications from any location. In other words, companies with corporate offices in Bangalore or Kolkata can file their forms electronically from any location. Therefore, citizens of all locations will be able to take advantage of this innovative service.
The MCA21 application will launch on March 6, 2022, at 12:00 am. It will include company, LLP, and e-adjudication modules. Other features of the MCA21 application include an e-book, Learning Management, and Compliance Management System. Version three of the MCA21 portal will be driven by artificial intelligence. L&T Infotech has been tasked to develop the third version of the portal.
CFCs
In order to operate a CFC in the scheme MCA21, a person or entity must meet the minimum technical and non-technical requirements. The CFC rates are maximum charges that are exclusive of statutory fees payable to the Government. Once the CFC is operational, the person is required to display a CFC signboard outside his/her premises. The design of the signboard has to be approved by the MCA.
To operate a CFC, a Professional must have a valid certificate of practice from one of the three professional institutes. The person must also have not been disqualified for professional misconduct within the past three years. The professional must have a reliable power supply arrangement to operate a CFC. The professional must also be registered with the appropriate regulatory body, such as the MCA or the NITI Aayog.
The project was launched in a progressive manner in 2006 at all ROC offices. The Ministry of Corporate Affairs set up 53 customer facilitation centres in metros and other cities. This was a major step towards a paperless government. With the introduction of this project, the government has been able to improve the delivery of government services and regulate corporates better. These changes are intended to reduce the administrative burden for the public, improve customer service, and make it more convenient for all stakeholders.
Costs
The Ministry of Corporate Affairs (MCA) has launched its MCA21 project in a phased manner across all ROC offices nationwide from February 2006. It has set up 53 customer facilitation centres in the metros and other locations to facilitate customers. To make the process simpler for businesses, MCA has reduced the costs of the project by introducing a new fee structure. But what are the costs? Read on to learn more about the scheme and costs involved.
The MCA21 e-Governance Scheme requires the establishment of Certified Filing Centres. These facilities facilitate filing of documents electronically and provide associated facilitation on a fee basis. The cost of the CFCs varies from agency to agency. The MCA has consulted professional institutes to determine the cost of the new facilities and notified a fee structure. The fee structure will be based on the types of services provided.
Benefits
One of the schemes introduced by the Ministry of Corporate Affairs is the Companies Fresh Start Scheme, 2020. Under this scheme, non-compliant companies can file their various documents in the MCA21 registry without paying any additional fees. It also provides immunity from penalties and prosecution for delayed filing. According to reports, over 4,73,000 Indian and foreign companies have already benefited from this scheme. It is a good news for companies in the midst of a COVID-19 outbreak.
A fundamental benefit of this scheme is the paperless operation of the back office. Although paper is still used in the back office, most of the operations will be paperless once the MCA21 system is fully operational. In addition, it will help to reduce the cycle time of the MCA service delivery. This new system also improves transparency of the operation. The software used for e-filing is freely available and easy to use.
Another benefit of the MCA21 portal is that users can view the records of all companies online. The system will digitize and store nearly six crore sheets of existing RoC documents. The system will then authenticate the digital documents and make them available for public viewing. Using this system, records of any company can be viewed from anywhere in the world, as long as they have the required fees. While online viewing is restricted to documents stored in RoC files, the system will provide a convenient and efficient way to view records.
