MSME Expectations For CFSS Scheme in 2021

MSMEs-seek-extension-of-CFSS-scheme

The CFSS scheme – the ‘Companies Fresh Start Scheme 2020’ brought hope to defaulting companies all over India.

But now, they desperately want the Government to extend the scheme by a few weeks or months.

What is the CFSS scheme?

Every company operating in India needs to follow norms laid out by the Government – from annual return filing, filling financial statements, books of accounts and other documents.

If the company fails to upload these documents, they are fined a penalty fee and categorized as ‘defaulting companies’. To help businesses cope with COVID-19, the ‘Companies Fresh Start Scheme’ was launched by the Ministry of Corporate Affairs to relieve compoanies of heavy compliance duties till 31st December 2020.

The CFSS scheme allows businesses to make good any filing-related defaults, irrespective of date, duration of default – and make a fresh start as a completely compliant entity.

Who benefits with the CFSS scheme?

Any company that defaulted on documentation and compliance are permitted to file the belated documents on the Ministry of Corporate Affairs website.

Forms to file under the CFSS scheme?

All companies availing this scheme should file forms –

  1. E-form CFSS 2020
  2. FormAOC 4 – Financial statements
  3. MGT 7 – Annual Returns

Why are companies requesting an extension of the scheme?

Several companies went to the Ministry of Corporate Affairs website to file their documents on the last date, but the website crashed. Many business owners took to social media to address their grievance since the delay caused huge penalty fees.

However, the scheme expired on 31st December 2020, prompting several MSMEs and companies to take to social media to implore the Government to extend the scheme. Also, the penalties deter new companies and LLPs from registering.

This Twitter thread elucidates why companies want the CFSS scheme extended desperately.

What else can the Government do to ease MSME burden?

Clear outstanding dues

The Ministry of MSMEs on Sunday congregated to discuss a new set of schemes and measures to help MSMEs with outstanding dues arising from working capital requirements. Nitin Gadkari addressed the receivables issue by asking all government bodies to clear any dues to MSMEs in 45 days of supplies.

Increased focus to boost the rural economy

The Government also plans to raise the rural economy from 80,000 crores to 5 lakh crore for employment generation in agriculture, rural and tribal sector.

Increased digital credit

Fintech players are on the rise to provide collateral-free loans to companies at low-interest rates. Increased ‘pay-per-use’ models from payment gateways will enable more Khirana stores to go digital with online payments.

Secure transactions

The RBI has issued a set of guidelines for MSMEs to be wary of hackers and lending fraudsters. Just last week, the government arrested over 11 instant loan app scammers who cheated small business owners off a lot of money. Here’s how you can protect your online payments from any scam and protect your business. 

Do not get behind on legal compliance

Whether the Government extends the scheme or not awaits to be seen. However, it is best for MSMEs to be aware and educated about different compliance and documentation processes. It is not easy to run a business and also ensure compliance of all documents for your business.

LegalWiz.in is an Instamojo merchant offering compliance services to let your business run smoothly without any legal issues. The company has also curated a LegalWiz free online course for anyone interested in learning about compliance and business registration.

LegalWiz boasts 5000+ clients pan India. Also, all Instamojo businesses have direct access to Legalwiz services on the mojo developer app store.


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