Companies Fresh Start Scheme 2020- Analysis with FAQs

The ministry of corporate affairs (MCA) has in furtherance with the MCA Circular No. 10/2020, come up with the ‘Companies Fresh Start Scheme 2020’ as Government of India’s efforts to provide relief to law abiding companies and Limited Liability Partnerships (LLPs) in the wake of COVID-19, to enable companies make good any filing-related defaults, irrespective of duration of default, and make a fresh start as a fully compliant entity. As per the Scheme companies have to pay ONLY NORMAL FEES of the forms WITHOUT ANY ADDITIONAL FEES.

The Companies Fresh Start scheme (Circular 12/2020 dated 30.03.2020) and modified LLP Settlement Scheme (Circular 13/2020 dated 30.03.2020) incentivize compliance and reduce compliance burden during the unprecedented public health situation caused by COVID-19.

The scheme will be provided during the period starting from 1st April, 2020 and ending on 30th September, 2020.

Brief detailing of the companies fresh start scheme 2020

• The scheme provides a one-time opportunity to file all the pending documents including the annual filing of the company by paying nominal fees (without including Additional Fees).
• It Provide immunity from penal proceedings, including against imposition of penalties for late
• This Scheme doesn’t provide immunity on any other consequential proceedings including proceeding involving the interest of its directors or key managerial personnel etc.
• If the company appeal against any order of prosecution for penalty passed by the competent court or adjudicating authority then the company first need to withdraw his application of appeal and furnish the proof of withdrawal to avail immunity in this CFSS 2020
• It Provide additional time for filing appeals before the concerned Regional Directors against imposition of penalties, if already imposed. However, the immunity is only against delayed filings in MCA 21 and not against any substantive violation of

Application to be filed for Issue of Immunity in respect of document(s) filed under Companies Fresh Start Scheme 2020

• The application for seeking immunity in respect of belated documents filed under the scheme shall be filed electronically in the Form CFSS-2020
• After closure of scheme and after the documents are taken on file or on 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

There is no fee payable for this Form CFSS-2020.

Provided, no immunity shall be given in the following matters:

• If any appeal pending before the court of law and in case of management disputes of the company pending before any court of law or
• No appeal has been preferred against such orders of the court or the adjudicating authority before this scheme came into force.

Non-Applicability of Companies Fresh Start Scheme, 2020 (CFSS-2020)

This scheme shall not apply in the following cases: –

> To any company against which Final notice for striking off the name of the company under section 248 of the companies act, 2013 already issued by the designated authority.

> Where the company has already made an application for striking off the name of the company from Registrar of

> To companies which have amalgamated under the scheme of compromise &

> Where applications have already filed for obtaining Dormant status under section 455 of the companies act, 2013 before the scheme

> To Vanishing Companies

> Documents related to Increase in authorised share capital (FormSH-7)

> Charge related documents (CHG-1, CHG-4, CHG-8 &CHG-9)

Scheme for Inactive Companies:

The defaulting inactive companies while filing pending form under scheme simultaneously can apply for the following:

• Application for dormant status under section 455 of the companies act, 2013 by filing MSC-1 to ROCs with nominal
• Application for striking off the name of the company from ROC under Section 248.

Frequently asked Questions (FAQ) on Companies Fresh Start Scheme 2020

Q 1. When can the Form CFSS 2020 can be filed?

Ans: This Scheme is available during the period starting from 1st April 2020 till 30th September,2020.

Q 2.Which Forms can be filed under this Scheme?

Ans: All the forms which were not filed on their due dated can be filed under this scheme EXCEPT:

• Form SH-7 for increase in Authorized share capital
• Form CHG-1, CHG-4, CHG-8 or CHG-9 relating to Charge.

Q 3. Which companies are eligible to file Form under this Scheme?

Ans: Any ‘defaulting company’ is permitted to file belated documents which were due for filing on any given date in accordance with the provisions of the scheme.

Q 4. What is the ‘defaulting Company’?

Ans: Defaulting company means a company defined under the companies act 2013, and which has been made a default in filing of any of the documents, statements, returns etc. including statutory documents on the MCA Registry.

Q 5. Who is the Designated Authority?

Ans: Designated Authority means the Registrar of companies having jurisdiction over the registered office of the company.