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December 19, 2022

MCA intends to introduce staggered deadlines for the Compliance of LLP and Cos

by Admin in Compliance Law

MCA intends to introduce staggered deadlines for the Compliance of LLP and Cos

A senior government official said that the Ministry of Corporate Affairs (MCA) intends to introduce staggered deadlines for the sub-mission of compliance documents as per recent media reports.

The action is intended to alleviate the MCA portal’s overuse during the busiest filing season, which frequently causes errors or causes the portal to lag. Due to the fact that limited liability partnerships (LLPS) and corporations now share the same filing date, the servers see extremely high traffic in the one to two weeks before to the deadline

The MCA now wants to divide the companies and LLPs into four or five subsets, with each having a separate filing deadline.

This strategy is comparable to some of the GST deadlines, where specific filing types—like the submission of GSTR-3B quarterly filings—are subject to various deadlines based on the taxpaying entity’s area.

As per news and media report the MCA will definitely increase the portal’s server capacity over the period, but one also needs to look at its utility. During non-peak seasons, it doesn’t witness any major traffic and the current capacity is more than enough, said the official. So, instead, we can regulate the traffic by setting different deadlines for different regions. There will be around four-five different regions across the country.

Considering the significant increase in the number of new firms and LLPs formed in India during the past three years, the development assumes significance. According to the most recent MCA data, there were almost 15 million active firms and about 2,50,000 active LLPs as of September 2022. Nearly 2,40,000 new businesses have started up in the previous three years. This has increased the number of MCA filing as well.

The ministry has received complaints about the portal issues from a various stakeholders, including compliance experts like company secretaries and chartered accountants. For instance, in late October, the MCA received new requests for extensions for the AOC4 form files from the Institute of Chartered Accountants of India and the Institute of Company Secretaries of India, both of which cited technical issues with the MCA platform. On social media, several professionals have also voiced their complaints.

As per news and Media Many of the companies and professionals choose to do their filings in the last week before the deadline, leading to abnormal surge in the portal traffic during the peak season. This should be avoided,” the official said. “Depending on the increase in the traffic, the MCA will take a call on transitioning to a cloud server system which will allow a large in- crease in the capacity.

The ministry systems are now transitioning from MCA Version 2 to Version 3. The new portal is anticipated to be more effective and user-interactive.

Most of the glitches reported in the last one year have been with Version2. There have also been some issues faced while integrating the Version 2 forms with Version 3. When the integration is finished in the middle of next year, the ministry expects that all of the problems will be resolved.

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