REQUEST FOR MORE RELIEFS UNDER CFSS-2020 - REQUEST TO PM, FM & MCA HIGHER OFFICIALS

REQUEST FOR MORE RELIEFS UNDER CFSS-2020

Finance Minister announced several relief measures relating to Statutory and Regulatory compliance matters across Sectors in view of COVID-19 outbreak on 24 March 2020.

The main relief as regards to companies & LLPs in India is as follows:

No additional fees shall be charged for late filing during a moratorium period from 01st April to 30th September 2020, in respect of any document, return, statement etc., required to be filed in the MCA-21 Registry, irrespective of its due date, which will not only reduce the compliance burden, including financial burden of companies/ LLPs at large, but also enable long-standing non-compliant companies/ LLPs to make a ‘fresh start’

NO ADDITIONAL FEES IN RESPECT OF ANY DOCUMENT,RETURN OR STATEMENT , ETC.

Corporate Affairs Minister announcement clearly says that no additional fees shall be charged in respect any document , return or statement , etc.

NON-APPLICABILITY OF CFSS-2020

However  CFSS-2020 Circular issued by MCA  General Circular 12/2020 /  F 02/01/2020/CV  dated  30 March 2020 says as follows :

Non Applicability of CFSS-2020:

·      Company under Strike off

·      Form SH-7 for Increase in Authorized Share Capital

·      Form CHG-1 , CHG-4, CHG-8, CHG-9 related to Charge

EXISTENCE OF CONTRADICTION

There exists contradiction between Finance Minister announcement and MCA circular.

Corporate Affairs Minster has announced that CFSS-2020 Scheme will be applicable to  in respect any document , return or statement , etc.

However , MCA says that CFSS 2020 is not applicable to SH-7 & Charge Forms.

BENEFITS SHOULD BE EXTENDED TO FORM SH-7 & CHARGE FORMS ALSO

The main intention of the GOI is to help the companies & LLPs in India  to reduce the compliance burden, including financial burden of companies/ LLPs at large, but also enable long-standing non-compliant companies/ LLPs to make a ‘fresh start’;

However , MCA circular is not accomplishing the vision of GOI.

According to the stakeholders , the benefit should have been extended to form SH-7 & charge forms also.

This will help many companies and LLPs in India to make their filings with the MCA up to date and can also become 100% complaint companies.

REQUEST TO GOVERNMENT OF INDIA AND MCA

Hence , I request the Government of India , Ministry of Corporate Affairs to align on the same vision of reducing the financial burdens of errant companies to give them single time opportunity to make their complaints up to date.

TO GIVE AN OPPORTUNITY TO COMPANIES THAT HAVE BEEN STRUKEN OFF   

CFSS-2020 exempts those companies which has been already stricken off and those companies which is under the process of strike off.

However , Corporate Affairs Minister statement says but also enable long-standing non-compliant companies/ LLPs to make a ‘fresh start’

 Status of Assets and Liabilities of Company after strike off

The liability of every director, manager or other officer, who was exercising any power of management, and of every member of the company dissolved under sub-section (5), shall continue and may be enforced even after strike off.

Another concern for a company whose name has been struck-off by the ROC is that Asset, Rights, Cash balances and other Current or Non-current Assets of the company is vested with whom? In the absence of any specific provisions in the Companies Act, 2013, it is highly debatable issue as to status of assets after strike off.

I request that stricken off companies should be given an opportunity to revive during the moratorium period.  Those companies which has assets , cash and bank balances should be an opportunity to revive their companies under this scheme.

This will give an golden opportunity to those companies which want to revive their companies to carry out their operations.

Please note that during this recession period , this will create  not only employment opportunities  but also helps to growth in GDP of India.

GIVE POWER TO RD FOR REVIVAL OF COMPANIES 

Please note that many stricken off are stuck in NCLT for months on end with no respite in sight - NCLT is giving importance to bankruptcy cases over this - there are many companies that needs to be revived. 

At least MCA should take it out of NCLT purview and give powers to RD to pass orders - then at least many cases can be closed, without clogging the judicial system with these routine petitions.

REQUEST

Hence I request Prime Minister of India , Corporate Affairs of Minister , higher officials of Ministry of Corporate Affairs to consider the following:

·      To include forms such as SH-7 and Charge forms under the CFSS-2020 Scheme

·      To provide an opportunity to those companies which were already stricken off to restart their operation under CFSS-2020 Scheme.