The Social Media has witnessed a huge outrage demanding the extension of the Companies Fresh Start Scheme, 2020 (CFSS).
The Institute of Company Secretaries of India (ICSI) has made a representation to the Ministry of Corporate Affairs (MCA) and requested for extension of due dates of CFSS.
Most of the people urged that a large number of Companies and particularly in MSME Sector which is the backbone of Aatama Nirbhar Bharat will collapse under the unbearable burden of compliance cost.
“One of my #OPC client who is IT (Software) professional wanted to continue his business & to set up in #Uttarakhand Skill India. But he refused to continue his business now & planning to lay off his employees. Perfect eg. #EODB #Extend_Due_Dates #Extend_CFSS#Extend_MCA_Schemes,” one of the CS tweeted.
It is highlighted that Directors, KMPs and Officers in default will be flooded with Show Cause Notices and will face prosecution as compliance cost will be very exorbitant and beyond the paying capacity of Companies.
“MCA portal is crashed and not responding at all. Challan not generating. Instead of extension to CFSS scheme & settlement Scheme, govt has imposed a 40k fine,” one of the tweets said.
It was pointed out that Section 252 will remain on Statute Book only but will hardly be applied as companies will not afford to file back years forms due to high cost.
Compliance of Directions given in Revival Orders already passed by NCLT Benches across country will become impossible to meet with leading to serious consequences
As Accounts for Financial Year 2019-20 of a large number of companies have not yet been finalised due to the long spell of COVID Pandemic situation, there will be multiple violations of provisions of Companies Act unless the accounts are dated which will be unethical practice . However this too will be possible only for a limited period.
There will be acute mistrust between clients and practising company secretaries as revival applications were filed in anticipation of availing benefit of CFSS . It will have serious impact on their practice .
Formation of new Companies and LLPs will slow down as penalties for non compliances are very stiff which will deter them to opt for corporate structure. This will severely impact practice of PCS who are not doing specialised practice or do not have Listed Companies as their clients. “Professional should boycott filing of forms until the #Extension CFSS NOT done by the government,” one of the tweets said while raising the concern.
