Posted on by Nikita Bhatia

Companies Fresh Start Scheme, 2020 (CFSS-2020)

The Ministry of Corporate Affairs on 30th March 2020 issued a circular regarding Companies Fresh Start Scheme 2020.

This is opportunity to all defaulted companies to file the all belated documents as fresh started documents without any additional fees.

OBJECTIVE:

  • Granting Condonation of additional fees: It is a one-time opportunity which will enable stakeholders in filing their pending compliances including Annual Return and Financial statement and various other statements, documents and returns to be filed with the Ministry of Corporate Affairs (MCA), without being subject to additional fees on account of any delay.
  • Granting Immunity: To grant immunity from prosecution or proceeding or imposing a penalty on account of delay associated with filing of belated documents (and not any other consequential proceeding).
  • Opportunity to inactive companies: To give an opportunity to inactive companies to get their companies declared as ‘dormant company’ under section 455 of the Companies Act, by filing a simple application at normal fees, which would help these inactive companies to remain on the register of the Companies with minimal compliance requirement.

DURATION: The Companies Fresh Start Scheme shall come into force on the 1st of April 2020 till the 30th of September 2020.

NON-APPLICABILITY: The Fresh Start Scheme shall not apply in the following cases:

  • To companies against which action for final notice for striking off the name u/s 248 of the Act has already been initiated by the designated authority.
  • Where any application has already been filed by the Companies for striking off the name of the Company from the registrar of Companies.
  • To Companies which have amalgamated under a scheme of arrangement or compromise under the Act.
  • Where applications have already been filed for maintaining dormant status under section 455 of the Act before the scheme.
  • To varnishing Companies.
  • Where any increase in authorized capital (Form SH-7) and charge related documents (Form CH-1. CH-4, CH-8, CH-9) are involved.
  • The immunity provided shall not be applicable in the matter of any appeal pending before the court of law and in case of management dispute of the Company before any court of law or tribunal.
  • The immunity shall not be provided in case any court has ordered conviction in any matter or an order imposing any penalty has been passed by an adjudicating authority under the Act.

PROCEDURE:

  • The defaulting company shall file their overdue documents/returns/other statements as well as statutory Annual Filing documents in respective prescribed e-Forms by paying the normal statutory filing fee (without any additional fee) within the immunity period.
  • The defaulting Companies shall file the Form CFSB-2020 after making all default good and after all the filings are taken on record or approved by the Designated authority as the case may. This form can be filed even after closure of the Scheme but not after the expiry of six months from the date of closure of the Scheme. The is no filing fees of Form CFSB-2020.
  • The Form CFSB-2020 is entirely self-declaration-based form. After submission of Form CFSB-2020 and on the basis of self-declaration made by Director, the ROC will issue Immunity Certificate.

SCHEME FOR INACTIVE COMPANIES: The defaulting inactive companies while filing the pending documents under CFSS 2020, can simultaneously either:

  • Apply to get themselves declared as dormant Company under section 455 of the Companies Act 2013 by filing e-form MSC-1 at a normal fee on said form or;
  • Apply for striking off the name of the Company by filing e-form STK-2

The Companies Fresh Start Scheme is in furtherance to the special measures under Companies Act, 2013 (CA-2013) and Limited Liability Partnership Act, 2008 in view of the COVID-19 outbreak, to provide relief to the law abiding Companies and Limited Liability Partnerships.

Official Circular : http://www.mca.gov.in/Ministry/pdf/Circular12_30032020.pdf

Please feel free to contact us at hello@ventureasy.com if you would like to complete your past or current filings with the MCA.

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