Refer MINISTRY Circular 11/2020 dated 24th day of March, 2020. : In order to support and enable companies to focus on taking necessary measures against COVID 19, MCA decided to reduce compliance burden and other risks.
Additional filing fees waived from 1st April 2020 to 30th Sept. 2020.
It also enabled long standing non- compliant companies to make a “fresh start”.Indicated new circular which has been issued as stated above on the title.
There were other measures too regarding the Board Meeting Gap, which got extended up to 180 days in place of 120 days, CARO 2020 applicability got extended and now effective from 2020-2021 only, waiver of attendance of ID (Independent Director), Deposit repayment reserve of 20% of deposits maturing in the FY 2020-21 period extended up to 30th June in place of 30th April 2020, similarly for Debentures maturing period extended up to 30th June in place of 30th April 2020, Declaration for Commencement of Business new Company period got extended from 180 days to 360 days from the date of incorporation, Non – compliance of minimum residency for 182 days period restriction waived.
Thus the opening paragraph of the the CFSS- 2020 scheme states that in furtherance of the circular 11/2020 the scheme is detailed. It is a fresh start on a clean slate for the benefit of all defaulting companies and inactive companies.
Important definitions: CFSS Scheme
1. “Defaulting company” means company defined under the Companies Act, 2013, and which has made default in filing of any or the documents, statement, returns, etc including annual statutory documents on the MCA-21 registry
2. Immunity certificate”‘ means the certificate referred to in subparagraph (viii) of paragraph 6 of the Scheme;
3. Inactive Company” means a company as defined in Explanation (i) to sub-section (l) of section 455(1) of the Companies Act, 2013;
Any ‘defaulting company’ is permitted to file belated documents which were due for filing on any given date in accordance with the provisions of this Scheme.
Without any Additional Fees
Immunity from the launch of prosecution or proceedings for imposing penalty shall be provided only to the extent such prosecution or the proceedings for imposing penalty under the Act pertain to any delay associated with the filings of belated documents.
An application for seeking immunity in respect of belated documents filed under the Scheme in the Form CFSS-2020, after closure of the Scheme and after the document(s) are taken on file, or on record or approved by the Designated authority as the case may be but not after the expiry of six months from the date of closure or the Scheme. There is no fee payable on this Form.
Provided also that no immunity shall provide in case any court has ordered conviction in any matter, or an order imposing 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.
It has been stated in the scheme that before filing an application for issue of immunity certificate, withdraw the appeal and furnish proof of such withdrawal along with the application.
After granting the immunity, the ROC office shall withdraw the prosecution(s) and the proceedings of adjudication of penalties under section 454 of the Act, if any, in respect of defaults against which immunity has been so granted shall be deemed to have been completed without any further action.
This scheme shall not apply:
> to companies against which action for final notice for striking off the name u/s 248 of the Act (previously section 560 of Companies Act. 195j has already been initiated by the ROC.
> where any application has already been filed by the companies for action of striking off the name of the company from the register 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 any increase in authorized capital is involved (Form SH7)- NO
> Also charge related documents (CHG-I, CHG-A. CHG-8 and CHG-9);- NO
Scheme for inactive Companies:-
The defaulting inactive companies while filing due documents under CFSS -2- 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 by paying the fee payable on form STK-2.
The Designated authority shall take necessary action under the Act against the companies who have not availed this Scheme and are in default in filing these documents in a timely manner.