MCA introduces Compliance Monitoring System

The Ministry of Corporate Affairs has introduced the Compliance Monitoring System (CMS) that uses Artificial Intelligence (AI) to identify & flag non-compliance. This hi-tech surveillance system, will help the Ministry of Corporate Affairs to issue Show-Cause Notices (SCN) to non-compliant companies & directors. The defaulting company should respond to the show-cause notice on CMS portal only.

The show-cause notice will be delivered to the email ID of the company’s director / key management person. It will contain a reference number which would look like F.No. D/RC000/000/2019/00/11-11 & will contain information about the non-compliance (e.g. non-filing of annual returns), section under which notice is issued and the due date for submitting the reply. The company shall get maximum of 15 days to reply to the SCN. Failure to respond within the prescribed time will attract penal consequences both, on the company and the director.

To reply to the SCN

  • Login to MCA-CMS platform,
  • Click on Reply to Show Cause Notice & input CMS reference number in portal
  • A one-time password will be generated and sent to the registered email ID. Enter the OTP to log-in
  • Reply to the SCN in not more than 500 words. If more data has to be submitted, do so on a separate letter, printed on the company letterhead. This letter should be attested by the Director or the Company Secretary.
  • Submit reply and retain the acknowledgement.

Companies not complying with the law are now prone to receiving SCN faster & automatically. This should encourage compliance levels and will push companies to follow all aspects of the Companies Act 2013. BCL India strongly advices full compliance with the law.

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