No Company/LLP Settlement Scheme Under Consideration: MCA Clarifies

No Company/LLP Settlement Scheme Under Consideration: MCA Clarifies. In a formal response to Starred Question No. 105 raised in the Lok Sabha on 28th July 2025, the Hon’ble Minister of Finance and Corporate Affairs, Smt. Nirmala Sitharaman, provided a significant clarification regarding the regulatory expectations of businesses and professionals under the Companies Act, 2013 and Limited Liability Partnership Act, 2008.
Responding to a query on whether the Government plans to introduce a fresh compliance settlement scheme, the Minister stated:
“At present, no such ‘Company Law and LLP Law Settlement Scheme, 2025’ is under consideration.”
This official statement puts to rest ongoing speculation within the corporate and professional community about the possible introduction of an amnesty or waiver scheme in the near future, similar to past initiatives introduced by the Ministry of Corporate Affairs (MCA) during times of widespread disruption or in response to industry demands for regulatory relief.
Background: Expectations for a New Settlement Scheme
Over the past few months, there had been growing anticipation among industry stakeholders, particularly Company Secretaries, Chartered Accountants, and compliance officers, for a new Company Law and LLP Law Settlement Scheme. Previous schemes most notably those introduced in 2020 and 2021 during the COVID-19 pandemic had provided a temporary compliance window for companies and LLPs to regularize their default filings without attracting hefty penalties.
Given the complexity of the transition to the new MCA V3 portal, and the increased digitalization of compliance mechanisms, several professional bodies had urged the MCA to consider a limited-period settlement scheme for entities that may have missed statutory deadlines due to technical or procedural challenges. 
However, the Government has now officially clarified that no such waiver or amnesty scheme is currently under consideration.
Recent Initiatives by the Ministry to Facilitate Compliance
In the absence of a new settlement or amnesty scheme, the Ministry of Corporate Affairs (MCA) has emphasized its commitment to improving compliance processes through a series of systemic and technology-driven reforms. These initiatives are designed to make regulatory filings more efficient, reduce delays, and ensure seamless user experiences for companies, LLPs, and professionals. Key recent initiatives include:
Integration of 79 Forms under STP/Conditional STP in MCA V3
The Ministry has significantly expanded the scope of Straight Through Processing (STP) and Conditional STP mechanisms under the upgraded MCA V3 portal. As of now, 79 company and LLP forms are processed automatically or semi-automatically without manual intervention, provided they meet pre-defined validation rules. This reduces turnaround times and minimizes the need for back-and-forth correspondence.
Establishment of C-PACE for Accelerated Strike-Off
To address delays in the closure of defunct companies, the MCA launched the Centre for Processing Accelerated Corporate Exit (C-PACE). This centralized body facilitates the fast-track processing of strike-off applications under Section 248 of the Companies Act, 2013. By streamlining the exit process, C-PACE helps inactive companies reduce their compliance burdens more efficiently.
Functioning of Central Processing Centre (CPC)
The Central Processing Centre (CPC) has become a crucial infrastructure component in MCA’s efforts to improve service delivery. It handles centralized, automated processing of corporate filings, allowing for uniform application of compliance standards across the country. CPC ensures faster approvals for routine forms and contributes to improved transparency and consistency.
Rollout of the E-Adjudication Module
Launched in September 2024, the E-Adjudication Module is part of the Ministry’s digital governance initiative. It allows for the electronic issuance of show cause notices, online submission of responses, and digital adjudication of penalties and orders. This module enhances accountability, reduces in-person interaction, and expedites the adjudication process under the Companies Act, 2013. 
Implications for Stakeholders
The Ministry of Corporate Affairs’ recent clarification that no Company Law and LLP Law Settlement Scheme, 2025 is under consideration has several important implications for companies, LLPs, professionals, and other stakeholders operating under the Indian corporate regulatory framework.
Emphasis on Continuous Compliance
The Government's position underscores a fundamental shift towards ongoing and timely compliance rather than temporary relief mechanisms. Unlike earlier settlement schemes that offered a limited window to regularize default filings without penalties, the current approach favors self-regulation and disciplined adherence to statutory obligations throughout the year. Stakeholders must now consider compliance as an integral and uninterrupted business function, not a one-time corrective measure.
Increased Responsibility for Companies and Professionals
With no waiver or amnesty scheme in the pipeline, the responsibility to remain compliant squarely rests on the companies, LLPs, and their compliance professionals such as Company Secretaries, Chartered Accountants, and legal advisors. Non-compliance or delay in statutory filings can lead to penal consequences, disqualification of directors, prosecution, or even the striking off of entities by the Registrar of Companies (RoC).
Need for Digital Adaptation and System Familiarity
The transition to the MCA V3 portal, combined with the rollout of modules like E-Adjudication, CPC, and C-PACE, has redefined how corporate filings and approvals are processed. Businesses must now invest time and resources in understanding the functionality of the new system, training personnel, and ensuring internal readiness for electronic compliance. Familiarity with features like Straight Through Processing (STP) can significantly enhance efficiency and reduce reliance on manual intervention.
Strategic Risk Management and Documentation Discipline
In a regime without leniency windows, proactive risk management becomes essential. Companies should review their historical compliance status, reconcile discrepancies, and maintain updated documentation for all statutory filings. Timely board meetings, adherence to due dates, and accurate data entry in e-forms are important to avoiding inadvertent defaults and regulatory scrutiny.
Shift from Reactive to Preventive Governance
The overall direction of current policy indicates a move away from reactive compliance corrections (via settlement schemes) toward preventive governance. This aligns with global standards of corporate conduct, where consistent, transparent, and automated compliance behaviour is expected and monitored. Companies that embed governance into their operational structure will be better positioned to avoid penalties and foster investor confidence.
Conclusion
While the absence of a new settlement scheme may be disappointing for some, the Ministry’s current focus lies in institutional and technological reforms that aim to enhance the ease of doing business in India. Stakeholders must remain vigilant, adhere to statutory deadlines, and make full use of the digital compliance infrastructure now available.
The clarification from the Hon’ble Minister underlines a forward-looking regulatory approach one that emphasizes efficiency, transparency, and consistent adherence to legal obligations, rather than reactive relief mechanisms.
FAQs
Q1. Is there a Company Law or LLP Law Settlement Scheme planned for 2025?
Ans. No. As confirmed by the Hon’ble Minister of Finance and Corporate Affairs, Smt. Nirmala Sitharaman, in the Lok Sabha on 28th July 2025 (Starred Question No. 105), there is no such settlement or amnesty scheme under consideration at present. 
Q2. What was the purpose of earlier settlement schemes introduced by the MCA?
Ans. Previous schemes (such as those in 2020 and 2021) provided temporary relief to defaulting companies and LLPs by allowing them to file pending documents without paying additional fees or facing penal action. These were introduced primarily during the COVID-19 pandemic.
Q3. With no settlement scheme, how should companies handle pending or default filings now?
Ans. Companies and LLPs must now comply with statutory filing requirements without expecting fee waivers. Any delays may attract penalties, prosecution, or disqualification under the Companies Act, 2013 or LLP Act, 2008.
Q4. What is STP/Conditional STP in the MCA V3 portal?
Ans. Straight Through Processing (STP) allows certain forms to be automatically approved upon submission if they meet system validations. Conditional STP includes additional system checks before automatic approval. 79 forms are currently processed under STP/Conditional STP in MCA V3.
Q5. What is the role of the Central Processing Centre (CPC)? 
Ans. The CPC is a centralized unit that processes e-forms filed by companies and LLPs. It ensures uniform scrutiny, faster processing, and transparency in form approvals.
Q6. What is C-PACE and how does it benefit companies? 
Ans. C-PACE (Centre for Processing Accelerated Corporate Exit) handles strike-off applications for defunct companies. It speeds up the closure process under Section 248 of the Companies Act, allowing non-operational companies to exit with reduced delays and compliance burden.
Q7. What is the E-Adjudication Module launched by MCA? 
Ans. Introduced in September 2024, the E-Adjudication Module enables online adjudication of defaults. It facilitates digital issuance of show cause notices, submission of replies, and final orders, making the process more transparent and efficient.
Q8. Are companies required to submit physical documents under the new MCA system? 
Ans. No. The MCA V3 portal supports complete digitization of compliance processes. All forms, replies, and supporting documents are submitted electronically, including through the E-Adjudication platform.
Q9. What are the risks of non-compliance in the absence of a waiver scheme? 
Ans. Non-compliance may lead to monetary penalties, disqualification of directors, prosecution, and even strike-off of the company/LLP. Without a settlement scheme, there is no cushion for delayed filings or defaults.
Q10. How should stakeholders stay informed about MCA policy updates? 
Ans. Professionals and companies should regularly check the MCA portal (www.mca.gov.in), official notifications, press releases, and Parliamentary responses to stay updated on compliance requirements, regulatory changes, and system enhancements.

In a formal response to Starred Question No. 105 raised in the Lok Sabha on 28th July 2025, the Hon’ble Minister of Finance and Corporate Affairs, Smt. Nirmala Sitharaman, provided a significant clarification regarding the regulatory expectations of businesses and professionals under the Companies Act, 2013 and Limited Liability Partnership Act, 2008.

Responding to a query on whether the Government plans to introduce a fresh compliance settlement scheme, the Minister stated:

“At present, no such ‘Company Law and LLP Law Settlement Scheme, 2025’ is under consideration.”

This official statement puts to rest ongoing speculation within the corporate and professional community about the possible introduction of an amnesty or waiver scheme in the near future, similar to past initiatives introduced by the Ministry of Corporate Affairs (MCA) during times of widespread disruption or in response to industry demands for regulatory relief.

Background: Expectations for a New Settlement Scheme

Over the past few months, there had been growing anticipation among industry stakeholders, particularly Company Secretaries, Chartered Accountants, and compliance officers, for a new Company Law and LLP Law Settlement Scheme. Previous schemes most notably those introduced in 2020 and 2021 during the COVID-19 pandemic had provided a temporary compliance window for companies and LLPs to regularize their default filings without attracting hefty penalties.

Given the complexity of the transition to the new MCA V3 portal, and the increased digitalization of compliance mechanisms, several professional bodies had urged the MCA to consider a limited-period settlement scheme for entities that may have missed statutory deadlines due to technical or procedural challenges.

However, the Government has now officially clarified that no such waiver or amnesty scheme is currently under consideration.

Recent Initiatives by the Ministry to Facilitate Compliance

In the absence of a new settlement or amnesty scheme, the Ministry of Corporate Affairs (MCA) has emphasized its commitment to improving compliance processes through a series of systemic and technology-driven reforms. These initiatives are designed to make regulatory filings more efficient, reduce delays, and ensure seamless user experiences for companies, LLPs, and professionals. Key recent initiatives include:

Integration of 79 Forms under STP/Conditional STP in MCA V3

The Ministry has significantly expanded the scope of Straight Through Processing (STP) and Conditional STP mechanisms under the upgraded MCA V3 portal. As of now, 79 company and LLP forms are processed automatically or semi-automatically without manual intervention, provided they meet pre-defined validation rules. This reduces turnaround times and minimizes the need for back-and-forth correspondence.

Establishment of C-PACE for Accelerated Strike-Off

To address delays in the closure of defunct companies, the MCA launched the Centre for Processing Accelerated Corporate Exit (C-PACE). This centralized body facilitates the fast-track processing of strike-off applications under Section 248 of the Companies Act, 2013. By streamlining the exit process, C-PACE helps inactive companies reduce their compliance burdens more efficiently.

Functioning of Central Processing Centre (CPC)

The Central Processing Centre (CPC) has become a crucial infrastructure component in MCA’s efforts to improve service delivery. It handles centralized, automated processing of corporate filings, allowing for uniform application of compliance standards across the country. CPC ensures faster approvals for routine forms and contributes to improved transparency and consistency.

Rollout of the E-Adjudication Module

Launched in September 2024, the E-Adjudication Module is part of the Ministry’s digital governance initiative. It allows for the electronic issuance of show cause notices, online submission of responses, and digital adjudication of penalties and orders. This module enhances accountability, reduces in-person interaction, and expedites the adjudication process under the Companies Act, 2013.

Implications for Stakeholders

The Ministry of Corporate Affairs’ recent clarification that no Company Law and LLP Law Settlement Scheme, 2025 is under consideration has several important implications for companies, LLPs, professionals, and other stakeholders operating under the Indian corporate regulatory framework.

Emphasis on Continuous Compliance

The Government's position underscores a fundamental shift towards ongoing and timely compliance rather than temporary relief mechanisms. Unlike earlier settlement schemes that offered a limited window to regularize default filings without penalties, the current approach favors self-regulation and disciplined adherence to statutory obligations throughout the year. Stakeholders must now consider compliance as an integral and uninterrupted business function, not a one-time corrective measure.

Increased Responsibility for Companies and Professionals

With no waiver or amnesty scheme in the pipeline, the responsibility to remain compliant squarely rests on the companies, LLPs, and their compliance professionals such as Company Secretaries, Chartered Accountants, and legal advisors. Non-compliance or delay in statutory filings can lead to penal consequences, disqualification of directors, prosecution, or even the striking off of entities by the Registrar of Companies (RoC).

Need for Digital Adaptation and System Familiarity

The transition to the MCA V3 portal, combined with the rollout of modules like E-Adjudication, CPC, and C-PACE, has redefined how corporate filings and approvals are processed. Businesses must now invest time and resources in understanding the functionality of the new system, training personnel, and ensuring internal readiness for electronic compliance. Familiarity with features like Straight Through Processing (STP) can significantly enhance efficiency and reduce reliance on manual intervention.

Strategic Risk Management and Documentation Discipline

In a regime without leniency windows, proactive risk management becomes essential. Companies should review their historical compliance status, reconcile discrepancies, and maintain updated documentation for all statutory filings. Timely board meetings, adherence to due dates, and accurate data entry in e-forms are important to avoiding inadvertent defaults and regulatory scrutiny.

Shift from Reactive to Preventive Governance

The overall direction of current policy indicates a move away from reactive compliance corrections (via settlement schemes) toward preventive governance. This aligns with global standards of corporate conduct, where consistent, transparent, and automated compliance behaviour is expected and monitored. Companies that embed governance into their operational structure will be better positioned to avoid penalties and foster investor confidence.

Conclusion

While the absence of a new settlement scheme may be disappointing for some, the Ministry’s current focus lies in institutional and technological reforms that aim to enhance the ease of doing business in India. Stakeholders must remain vigilant, adhere to statutory deadlines, and make full use of the digital compliance infrastructure now available.

The clarification from the Hon’ble Minister underlines a forward-looking regulatory approach one that emphasizes efficiency, transparency, and consistent adherence to legal obligations, rather than reactive relief mechanisms.

FAQs

Q1. Is there a Company Law or LLP Law Settlement Scheme planned for 2025?

Ans. No. As confirmed by the Hon’ble Minister of Finance and Corporate Affairs, Smt. Nirmala Sitharaman, in the Lok Sabha on 28th July 2025 (Starred Question No. 105), there is no such settlement or amnesty scheme under consideration at present.

Q2. What was the purpose of earlier settlement schemes introduced by the MCA?

Ans. Previous schemes (such as those in 2020 and 2021) provided temporary relief to defaulting companies and LLPs by allowing them to file pending documents without paying additional fees or facing penal action. These were introduced primarily during the COVID-19 pandemic.

Q3. With no settlement scheme, how should companies handle pending or default filings now?

Ans. Companies and LLPs must now comply with statutory filing requirements without expecting fee waivers. Any delays may attract penalties, prosecution, or disqualification under the Companies Act, 2013 or LLP Act, 2008.

Q4. What is STP/Conditional STP in the MCA V3 portal?

Ans. Straight Through Processing (STP) allows certain forms to be automatically approved upon submission if they meet system validations. Conditional STP includes additional system checks before automatic approval. 79 forms are currently processed under STP/Conditional STP in MCA V3.

Q5. What is the role of the Central Processing Centre (CPC)?

Ans. The CPC is a centralized unit that processes e-forms filed by companies and LLPs. It ensures uniform scrutiny, faster processing, and transparency in form approvals.

Q6. What is C-PACE and how does it benefit companies?

Ans. C-PACE (Centre for Processing Accelerated Corporate Exit) handles strike-off applications for defunct companies. It speeds up the closure process under Section 248 of the Companies Act, allowing non-operational companies to exit with reduced delays and compliance burden.

Q7. What is the E-Adjudication Module launched by MCA?

Ans. Introduced in September 2024, the E-Adjudication Module enables online adjudication of defaults. It facilitates digital issuance of show cause notices, submission of replies, and final orders, making the process more transparent and efficient.

Q8. Are companies required to submit physical documents under the new MCA system?

Ans. No. The MCA V3 portal supports complete digitization of compliance processes. All forms, replies, and supporting documents are submitted electronically, including through the E-Adjudication platform.

Q9. What are the risks of non-compliance in the absence of a waiver scheme?

Ans. Non-compliance may lead to monetary penalties, disqualification of directors, prosecution, and even strike-off of the company/LLP. Without a settlement scheme, there is no cushion for delayed filings or defaults.

Q10. How should stakeholders stay informed about MCA policy updates?

Ans. Professionals and companies should regularly check the MCA portal (www.mca.gov.in), official notifications, press releases, and Parliamentary responses to stay updated on compliance requirements, regulatory changes, and system enhancements.