The Institute of Company Secretaries of India (ICSI) has requested the Ministry of Corporate Affairs (MCA) to introduce a new initiative titled “Company Law & LLP Law Settlement Scheme – 2025”. The proposal was officially submitted on 10 November 2025, following earlier representations made in July 2023, October 2024 and June 2025.
This request reflects an increasing industry need for regulatory relief as companies struggle to meet mandatory filing and compliance obligations.
1.Rising Need for a Fresh Settlement Framework
Over the past few years, a large number of companies and LLPs have found it difficult to file their annual returns and financial statements within the prescribed timelines. ICSI has pointed out several key reasons contributing to this situation:
- Persistent technical difficulties on the MCA portal
- Operational and administrative challenges
- Financial constraints, especially affecting MSMEs
These issues have created a backlog that prevents many entities from completing further filings or applying for strike-off, leaving them stuck in non-compliance.
2. Sharp Increase in Non-Compliance Numbers
ICSI has highlighted a steady rise in non-filings of both financial statements and annual returns, which impacts registry accuracy and regulatory efficiency. The figures below show the scale of the issue:
Financial Year | Companies Yet to File Financial Statements | Companies Yet to File Annual Returns |
2018–19 | 1,79,697 | 1,75,034 |
2019–20 | 2,18,237 | 2,19,854 |
2020–21 | 2,61,785 | 2,58,961 |
2021–22 | 3,70,886 | 3,70,021 |
2022–23 | 5,30,076 | 5,14,343 |
These data points reflect a significant rise in compliance delays, creating challenges for regulators, professionals, and businesses alike.
3.What ICSI Has Proposed
To help companies and LLPs become compliant again, ICSI has recommended implementing a one-time relief scheme with the following features:
- Special filing window for submitting all overdue e-forms
- Waiver or capping of additional fees
- Immunity from adjudication or prosecution of defaults covered under the scheme
- Simplified strike-off or dormant status process for long-inactive companies
According to ICSI, such a scheme would encourage voluntary compliance and reduce the burden of ongoing disputes and penalties.
4.Potential Benefits to Stakeholders
If approved, the scheme is expected to positively impact:
- Non-compliant companies and LLPs seeking revival
- Investors and lenders expecting clean records
- Corporate governance and transparency standards
- The Ministry’s regulatory efficiency
- Professionals handling corporate filing and compliance
The initiative aligns strongly with the Government’s agenda of promoting ease of doing business in India.
5.Industry Expectations and the Way Forward
ICSI has expressed its readiness to support the Ministry by contributing data insights, stakeholder feedback, and assistance in drafting the framework.
The corporate ecosystem now awaits the Ministry’s response with optimism, hoping that Settlement Scheme 2025 will provide timely relief and encourage companies to clean up their compliance backlog.
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