Preetika Chawla
In furtherance of Govt. of India efforts to minimize the fast spreading pandemic COVID 19,our Govt had also taken several measure to provide relief to the Corporates operating in the Country. Companies Fresh Start Scheme, 2020 is one of its kind and it’s a golden opportunity for Companies and LLP’s to save huge amount of late fees, which would otherwise be payable:
1. Applicability:
A defaulting company for filing belated documents due for filing on any given date
2. When this scheme will become operational?
This scheme will become operational from 1st April, 2020 to 30th September, 2020
3. Payment of fees:
Every defaulting Company shall be required to pay only normal fees as prescribed under the Companies (Registration office and fees) Rules, 2014
4. Immunity:
Immunity from the launch of the prosecution or proceedings for imposing penalty shall be provided only to the extent such extent or prosecution or the proceedings for imposing penalty under the act pertains to delay in filing of any belated documents.
5. Forms for which this scheme is applicable:
This scheme is applicable to all filing forms like: MGT 7, AOC 4, PAS 3 etc except the following forms:
√ Form SH-7 for an increase in Authorised Share Capital
√ Form CHG-1, CHG-4, CHG-8 or CHG-9 (Charge Related forms)
6. To whom this scheme is not applicable:
√ 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 an application has already been filed by the companies in Form STK-2 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 obtaining Dormant Status under section 455 of the Act before this scheme.
√ To vanishing companies.
√ Where companies are marked as ‘under CIRP’ or ‘Liquidation’ under the Act or as per the Insolvency and Bankruptcy Code, 2016
7. Special measures for cases where the order of the Adjudicating authority was passed but the order could not be filed:
In all the cases in filing of documents,statements etc in MCA 21 registry,penalties were imposed by Adjudicating authorities but no appeal has filed by any Authorized representative of Company before the Regional Director,the following would apply:
√ Where the last date of appeal the appeal u/s 454(6) falls between 1st day of march, 2020 to 31st May, 2020 (both days included), a period of 120 additional days shall be granted with effect from the last date to all Companies and their officers before the concerned Regional Directors
8. Issuance of Immunity Certificate under this scheme:
The application for seeking immunity in respect of belated documents filed under this scheme may be made electronically in the Form CFSS-2020 as available on MCA portal and after the documents are taken on file or record or approved by the Designated Authority as the case may be but not after the expiry of 6 months from the date of closure of the scheme. There shall not be any fees payable on this form.
9. To whom this immunity shall not apply:
The immunity shall not be provided in the following cases:
√ If any appeal is pending before the court of law and in case of management disputes of the company pending before any court of law or tribunal.
√ 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 and no appeal has been preferred against such orders of the court or of the adjudicating authority as the case may be before this scheme has come into force.
Scheme for Inactive Companies:
A defaulting inactive companies while filing pending form under scheme simultaneously can apply for followings:
√ Apply for Dormant u/s 455
√ Apply for Strike off U/s 248
Contact: cspreetichawla07@gmail.com
Doing what I do, I come across many Financial reforms employed by different countries (including India) – but rarely ever do they come across as thought-provoking. Desperate times like these required desperate measures in place, which is what the FinMin, and Nirmala Sitharaman brought out with the Fresh Start Scheme (2020). A large majority of businesses affected by covid-19 in any way, can avail this scheme – which, can really turn out to be a fresh start for many.
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