The Ministry of Corporate Affairs after receiving representations from various stakeholders has rolled out a one time opportunity for all the corporates in India to make all the pending ROC filings including the annual filings without paying any kind of additional fees.
The Ministry of Corporate Affairs has launched a scheme vide its General Circular No. 12/2020, dated 30th March,2020 ‘Companies Fresh Start Scheme, 2020’ to enable the companies to make the ROC filings for any number of years on normal fees and granting of immunity from any kind of prosecution or proceedings for delay in ROC filings.
We have come out with FAQs to cover up the queries involved with the aforesaid scheme, as under:-
1. Who can benefit from this Scheme?
All the companies which have defaulted in filing the mandatory ROC forms at any point of time.
2. Why this scheme has been introduced?
This scheme has been introduced to benefit all the defaulting companies to make the pending ROC filings without any additional fees and at the same time without any prosecutions related to such filings.
3. What is the tenure of the Scheme?
This Scheme shall be valid from 1st April, 2020 till 30th September, 2020.
4. What are defaulting companies?
It refers to those companies defined under Companies Act, 2013 which have defaulted in filing of any of the documents, forms, statements, returns including annual statutory documents on the MCA 21 registry.
5. What do you mean by immunity granted under this Scheme?
It implies that the defaulting company shall be granted immunity from any kind of prosecution or proceeding related to ROC forms filings. However this will not cover any consequential proceedings related to the interests of the stakeholders or any other person qua the company or its officials.
6. How the defaulting company can get immunity certificate under this Scheme?
After filing all the pending forms and returns with the MCA registry, the defaulting company shall file e-form CFSS-20 within a period not exceeding six months from the closure of this Scheme. Once the form is filed, the Registrar of Companies shall issue the immunity certificate.
7. Under what circumstances immunity certificate won’t be issued?
1) In case any appeal is pending in any court of law;
2) In case of management disputes pending before any court of law or Tribunal;
3) In case any court has ordered conviction in any matter;
4) In case an order imposing penalty has been passed by an adjudicating authority under the Act and no appeal has been preferred against such orders before the date of this Scheme.
8. What all forms can be filed by the defaulting companies under this Scheme?
The defaulting Companies can file the following forms under this Scheme:-
1) Annual compliance forms i.e. Form AOC-4 & MGT-7.
2) Event based forms
However the following forms cannot be filed under this Scheme:-
a) Charge related forms (CHG-1, CHG-4, CHG-8, CHG-9)
b) Increase in Authorized share capital related form (SH-7)
9. Can the form DIR-3KYC be filed without any late fees?
Yes, the directors can file form DIR-3 KYC without any fines / late fees.
10. What are inactive companies?
As per Explanation (i) to Section 455(1) of the Act; “Inactive Company” means a company which has
1) not been carrying on any business or operation, or
2) has not made any significant accounting transaction during the last two financial years, or
3) has not filed financial statements and annual returns during the last two financial years”
11. What are the benefits for defaulting inactive companies?
The defaulting inactive companies while filing due documents under this Scheme, can simultaneously either
1) Apply to get them declared as Dormant company by filing e-form MSC-1 at a normal fee or
2) Apply for striking off the name of the company by filing form STK-2 by paying the normal fee on the said form.
12. What are the cases in which this Scheme shall not be applicable?
This Scheme shall not be applicable in the following cases:-
1) Companies against which action for final notice under Section 248 has already been initiated by the authorities.
2) Where any application has already been filed by the company with the ROC for striking off the name of the company.
3) Companies which have amalgamated under the scheme of compromise or arrangement
4) Where application has already been filed under Section 455 for getting the status of a dormant company.
5) Vanishing companies
6) Where any increase in authorized share capital or charge related documents are involved.
13. What are vanishing companies?
A company would be deemed to be a vanishing company, if it is found to have:
1) Failed to file returns with Registrar of Companies (ROC) for a period of two years;
2) Failed to file returns with Stock Exchange (SE) for a period of two years (if it continues to be a listed company);
3) It is not maintaining its registered office of the company at the address notified with the Registrar of Companies/ Stock Exchange; and
4) None of its Directors are traceable.
14. How to avail this Scheme?
This Scheme shall be availed in the following manner:-
The defaulting company needs to file all its pending returns and forms before 30.09.2020.
Once the filing is complete, then E-form CFSS – 2020, needs to be filed within the six months of the closure of the said scheme.
15. Is there any fees on filing of E- form CFSS-2020?
No there is no fees on filing of E- form CFSS-2020.
16. Can a defaulting company which has filed appeal against any Notice or Complaint or Order passed by the court or adjudicating authority for violation of provisions of the Companies Act,2013 / 1956?
Yes, the defaulting Company can avail the benefit of this Scheme in case it withdraws the appeal before furnishing the application for issue of immunity certificate and submits the proof of the same with ROC.
17. What shall be the effect of the immunity certificate issued by the Designated authority / ROC?
After the issue of immunity certificate, the Registrar of Companies shall withdraw the prosecutions / proceedings pending, if any, before the concerned Court(s) and the proceedings of adjudication of penalties under Section 454 of the Act shall be deemed to have been completed without any further action on the part of Designated authority.
18. What will happen in case the defaulting companies do not avail this Scheme and do not make the pending filings with Ministry?
The Designated authority shall take the necessary action in a timely manner against those defaulting companies which do not avail this Scheme and consequently do not make the filings.
The above questions cover all the major aspects of the “Companies Fresh Start Scheme,2020” and in case the reader has further queries, he / she can contact at the below mentioned contact.