As announced by Finance Minister Nirmala Sitharaman during the Budget 2021, the launch of MCA21-Version 3.0, the Ministry of Corporate Affairs (MCA) has installed CSC (Central Scrutiny Centre) as a key segment to Version 3.0 in order to reconstruct the corporate governing environment in India which will scrutinize the Straight Through Process (STP) Forms filed by the corporates on the MCA21 registry.
What is MCA21 Version 3.0?
It is a technology-driven project of the Ministry of Corporate Affairs which aims to strengthen enforcement, promote ease of doing business, enhance user experience, facilitate seamless integration and data exchange among regulators.
The project will comprise of micro-services architecture with high scalability and capabilities for advanced analytics.
As per the MCA notification dated March 18, 2021, all the forms filed by companies via Straight Through Processes shall be carrying out scrutiny by the Central Scrutiny Centre (CSC) which will function under the administrative control of the e-governance Cell of the Ministry of Corporate Affairs.
The launch of CSC is a reformist scheme that will eventually promote-
- Mindful approach while filing of the e-forms
- Lesser vagueness affecting influential data
- Flag the companies for more in-depth scrutiny.
- More enhanced e-Governance in regularity compliance
Till the date of this amendment, there were no provisions for scrutiny of the STP forms. However, after the set-up of CSC, these forms bend under the jurisdiction of scrutiny. If CSC found any non-compliance in scrutiny they will issue a Show Cause notice for adjudication/ compounding. Due to this process, many companies who are non-compliant will come to on verge of closure.
AOC-4 being the most important STP form which is required for the submission of the Financials with the Registrar of the Companies being approved through STP mode, there is no regulatory check concerning the data being attached to the forms and their accuracy.
After the induction of CSC, there will be a check on the attachments to the Financials and other documents.
This will leave the corporates with two situations
1. Comply with the law and live a long life.
2. Remain non-compliant with the law and left uprooted.