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Writer's pictureSandeep Rajbhar

ICSI Proposes Company Law and LLP Law Settlement Scheme, 2024 to Address Filing Challenges

Introduction

The Institute of Company Secretaries of India (ICSI) has formally approached the Ministry of Corporate Affairs (MCA) with a significant proposal: the introduction of a "Company Law and LLP Law Settlement Scheme, 2024" (CL&LLSS-2024). This initiative aims to mitigate the ongoing technical difficulties that companies and Limited Liability Partnerships (LLPs) face when filing statutory e-forms on the MCA-21 V3 portal.


The Current Challenges

Many companies and LLPs have been experiencing challenges that hinder their ability to meet statutory filing requirements on time. Issues such as difficulties with Digital Signature Certificate (DSC) registration, downloading e-forms, updating master data, and utilizing pre-fill options have all contributed to delays. These technical glitches not only complicate the filing process but also place organizations at risk of incurring penalties under the Companies Act, 2013, specifically under Section 451, which imposes increased fines for repeated defaults.


The Proposed Scheme

The ICSI’s proposal seeks to offer companies and LLPs a one-time opportunity to submit their overdue filings without facing penalties. This approach echoes previous relief measures like the Company Law Settlement Scheme, 2014, and the Company Fresh Start Scheme, 2020. By introducing the CL&LLSS-2024, the ICSI aims to alleviate the legal and financial pressures that organizations encounter due to unavoidable filing delays.


Benefits of the Scheme

  1. Ease of Compliance: The scheme would allow companies and LLPs to rectify their defaults without the fear of incurring higher fines or facing legal action.

  2. Promoting Ease of Business: By addressing the technical challenges associated with the MCA-21 V3 portal, the initiative aims to enhance the overall ease of doing business in India.

  3. Encouraging Timely Filings: The proposal would incentivize companies and LLPs to complete their statutory obligations, thereby fostering greater compliance and transparency within the corporate sector.


ICSI's Commitment

ICSI remains dedicated to collaborating with the MCA to support stakeholders and ensure that business operations are not adversely affected by technical difficulties. The organization has expressed its willingness to provide further information or clarification regarding the proposed scheme, emphasizing its role in advocating for the interests of its members and the broader business community.


Conclusion

The introduction of the Company Law and LLP Law Settlement Scheme, 2024, represents a proactive step towards resolving the technical issues faced by companies and LLPs in India. By facilitating a more accommodating filing process, this initiative can significantly reduce the burden of compliance and promote a healthier business environment. The ICSI's commitment to working closely with the MCA reflects a shared vision of fostering corporate compliance and supporting the growth of businesses in India.

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