Company Fresh Start Scheme 2020- One time additional fees waiver

General Circular No:-11/2020 dated 24 March 2020

General Circular No:-12/2020 dated 30 March 2020

MCA as COVID 19 relief providing initiatives with Central Govt., has introduced scheme namely Company fresh start Scheme, 2020 as one time opportunity to file various statements, documents and returns required under Companies act, 2013 as well as Companies Act, 1956.

Similar measures had been taken for LLP’s also namely LLP settlement Scheme, 2020. Although analysis related to companies is done as follows-

Objective of the scheme

1.Incentivize the compliance

2.Reduction in compliance burden

3.One time waiver of additional fees

Brief of the scheme:-

• One time measure to enable defaulting companies to complete their fillings with no additional fees.
• Scheme will remain in force from 1^st 2020 to 30^th Sep. 2020.
• Scheme is applicable for all companies i.e. defaulting companies having pendancy of filling of any document, statement and returns as per Companies acts for any period.
• There is no restriction in regard to no. of years and no. of returns to file under this scheme I.e. all pendancy may be filed with ROC since incorporation of the company.
• Provides an opportunity to inactive companies to get status of dormant company by filling a simple application at normal fees and remains same with minimal compliances.
• Immunity granted from prosecution or proceeding for imposing penalty provisions relevant to non/delayed filling by issuance of immunity certificate. However consequential substantive defaults are not immuned under this scheme.
• Seperate form CFSS-2020 is to be filed for grant of Immunity certificate. Form can be filed without any fees and within 6 months from the expiry of this scheme.
• After granting of immunity certificate, all pending prosecution shall be withdrawn and deem to be completed without any further action.
• In total, 76 types of forms are available for this scheme including LLP Settlement scheme,2020. Bifuracation therof are as under:

Companies Act, 1956 10 Forms

LLP 12 Forms

Companies Act, 2013 54 Forms

• Enquire fees facility will show the normal fees and additional fees as generally applicable, as this scheme is not in nature of permanent one, so additional fees waiver has not been incorporated at Enquire fees mechanism.

Matters which are at Appeallate level:-

• If defaulting company or any officer in default has filed appeal with respect to notice issued or complaint filed or order issued by court/adjudicating authority in respect to any statutory fillings under Companies act, 2020, shall withdraw the appeal proceeds to avail this scheme and furnish the proof of the same.
• This scheme is not applicable for the appeals pending before the court of law and in case of management disputes of the company.
• No immunity shall be provided if Court has convicted or penalty order has been passed by an adjudicating authority and no further appeal has been preferred against such order before this scheme.

In case no appeal has been filed:-

•  If order or penalty in respecṭ of delayed filling of document, statement o return etc., were imposed by an adjudicating officer and appeal is not filed until 01^stApril 2020 and appeal period lies between 1^st march, 2020 to 31^st May, 2020, then additional period of 120 days from 31^st may 2020 shall be given for filling an appeal before the concerned period.
• Captioned period has been immuned from the prosecution regarding non compliance in regard to order of concernec RD.

Non applicability of the scheme:-

• Companies for which final notice for strike off has already been initiated
• In case, Strike off application filed by the company itself
• Companies amalgamated under the scheme of arrangement or compromise
• Where application for Dormant status has been filed
• Vanishing companies I.e. those companies which raised funds from public through initial public offers (IPOs) and subsequently failed, inter-alia, to comply with the listing/ filing requirements of Registrar of Companies (ROC) and the Stock Exchanges for a period of two years and were not found at their registered office address at the time of inspection done by authorities / Stock Exchange.
• In case of SH-7 and charge related forms i.e. CHG-1, CHG-4, CHG-8 and CHG-9.

Options available for Inactive Companies:-

I-Apply fro Dormant status by filling MSC-1

II-Apply for strike off by filling STK-2

Special Considerations:-

Q 1.Whether scheme is applicable for MGT-14 not filed beyond 300 days?

Ans:-For filling of MGT-14 beyond 300 days, condonation from central govt. is to be firstly availed and then filling of relevant forms may be filed without any additional fees.

Q 2.What if all the directors are disqualified u/s 164(2)?

Ans. In case of disqualification of all directors of the co., firstly atleast one director is to be appointed then fresh filling may be made for availment of the scheme. Further as in the relevant case, it may take several months to depict on MCA portal, so for timely appointment of director in records of MCA, ticket may be raised.

Q 3.Whether if a company is striked off by the authorities but afterwards received Revival order is eligible for the scheme?

Ans. Yes, as the current status of the co. is active after receipt of revival order, so the scheme is available to file pending forms

Q 4.What if Company is still under strike off process, the scheme may be availed?

Ans. To avail the scheme, Active status is must for the company. So at first, revival application may be moved u/s 252(3) to NCLT for the same. After receipt of the same, this scheme may be availed for pending filling. Further as of now, if revival order is received after the expiry of the scheme, company could not able to avail this scheme.

Q 5.Whether the scheme may immune violations of all compliances under Companies act.

Ans. No, on ly immunity from the procedureal compliance related to relevant forms is provided. Immunity from the operation of law related compliance not be provided.

Q 6.What if the company has not filed Active Form (INC-22 A) and Director KYC also not done?

Ans. KYC of directors and Form Active, both are eligible for this scheme I.e. no additional fees. Firstly Director KYC is to be done, hereafter Form Active may be filed then all other pendancy may be initiated.

Q 7.Whether Scheme is available for PAS-3 (Return of allotment) and MSME forms?

Ans. Yes, as only SH-7 and charge related forms are excluded.

Q 8.Whether this scheme is available for name approval and Incorporation processes?

Ans. No. But for the extension of time limit of approved name and for resubmission of RUN form, concern may be raiseed to MCA. It may consider and extend the captioned time limit on case to case basis.

Q 9.Whether Scheme is available for Foreign Companies?

Ans. Yes

Q 10. Whether non compliance in respect to Scc 96 is eligible for the scheme?

Ans. No, as it is not related to filling of forms.

Q 11.Whether DPT-3 and Ben-2 are covereed in this scheme?

Ans. Yes

Q 12.Whether Nidhi Companies are eligible for this scheme?

Ans. Yes

Q 13.Whether immunity from prosecution for non filling of the forms for which nil normal fees is applicable?

Ans.Clarification may be issued by ROC.

Q 14.Whether there would be any chance of prosecution to the Company secretary filling the relevant forms?

Ans. No, it is subject to the management disputes with CS.

Q 15.Whether this scheme is available for Event based non compliance I.e. No. of directors, Not holding AGM etc?

Ans. No, only form filling related non compliance will be immuned in this scheme.

Q 16.Whether there is any exemption in filling of forms?

Ans. No, only Additional fees is waived.

Q 17.Whether seperate Board resolution is required to file CFSS-2020 Form?

Ans. Yes, resolution to file relevant form shall be of the period after the expiry of the scheme.

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