Companies Fresh Start Scheme, 2020

The MCA vide its circular dated 30th March 2020 has issued Companies Fresh Start Scheme, 2020 to promote defaulting companies to make a fresh start on a clean slate and waive the additional fee as charged under section 403 of Companies Act, 2013 which is applicable on certain forms to be filed with MCA.

Scheme: A company which has failed to any return or form including Annual Returns and Financial Statements and which is governed under section 403 of Companies Act, 2013 can be filed with effect from 1st April 2020 to 30th September 2020 at a nominal fee as prescribed under The Companies (Registration and Office) Rules, 2014 and avail immunity certificate from prosecution or imposition of penalty under the Act for belated filing. However, the same is restricted to imposing of additional fee on certain forms but not contravention of provisions of Companies Act, 2013.

For example, Section 42(4) provides for return of allotment be filed before utilization of funds raised through private placement. The scheme provides immunity towards belated filing of return but not the contravention of section of utilization of funds before filing return of allotment.

The inactive companies can also apply simultaneously for obtaining dormant and strike off as per fees applicable on such form while filing returns.

On completion of the scheme on 30th September 2020, CFSS-2020 e-form shall be available for filing for companies availing benefit under the scheme and immunity certificate will be issued by MCA.

Non- Applicability: Companies Fresh Start Scheme, 2020 does not apply to Companies striked off by ROC u/s 248, companies applied for strike off/Amalgamation/merger/dormant, vanishing companies and on form SH-7, CHG-1, CHG-4, CHG-8 & CHG-9 (Increase in capital & charge related forms)

*Companies which has appealed against any prosecution launched for imposing penalties shall withdraw the appeal before availing the scheme.

Queries:

What forms which can be filed under the Companies Fresh Start Scheme, 2020 ?

The forms which are subject to additional fee under section 403 of Companies Act, 2013.

Whether a company as striked off by ROC due to non-filing of returns avail the benefits under the Companies Fresh Start Scheme, 2020 ?

Such companies shall make an application to NCLT for revival of the company and on being active can file returns under the scheme on orders of NCLT.

Whether the active non-compliant companies can file returns under the Companies Fresh Start Scheme, 2020 ?

Yes, the companies can file belated returns under  the scheme subject to restrictions as issued for active non-compliant companies. 

Do we need to make any application before filing such forms?

No application is required to be filed before filing belated returns. However on completion of scheme, the company shall file e-form CFSS-2020 (yet to be deployed) with no fee and obtain immunity certificate.

Can the company file form MGT-14 under the scheme?

No, the same is not governed under the provisions of Section 403 of Companies Act, 2013.

What about the companies where the order is issued for belated filing of returns?

In the cases, wherein the penalties are imposed under the Act and the company has not further appealed to higher authorities and such period of appeal lies between 1st March 2020 to 31st May 2020, a period of additional 120 days be allowed for filing of appeal from last date as may be specified under the order.

Further, such companies can also avail to withdraw the appeal, if any filed and avail benefits of the scheme.

What will be the filing fee for application of strike off or dormant company?

Normal fee depending upon paid up capital of the companies as prescribed under The Companies (Registration and Office) Rules, 2014 to apply for dormant companies and Rs.10,000/- to apply for strike off under STK-2.

Will the directors disqualified under the Act, after filing due returns will be regularized and disqualification be removed?

No, the scheme does not waive the disqualification of Directors and the status of DIN will continue to remain same even after filing of such returns.

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11 Comments

  1. abhi says:

    Our company was incorporated in 2011 and got striked-off due to not filing returns in 2016(returns have not filedd from the year 2011), are we applicable to this scheme

  2. Sathish Kumar says:

    Can a OPC which got strike off because of non filing of Annual Returns for continuous period of 3 years, avail the scheme. Since it has only one director what about the status of the disqualified director and whether any new director should be appointed. Kindly Advice.

    1. PRIYANKA RAJORA says:

      The opc shall apply for revival and post obtaining the status of active shall continue to file the returns.
      The present director will be able to proceed with filings.

  3. Priyanka Rajora says:

    MCA has excluded SH-7 for increase in capital and charge forms from the scheme and clarification is issued for DIR 3 KYC and Active tagging can be filed with no fee.
    All regular forms will be able to file without late fee.

    1. Priyanka Rajora says:

      MCA has excluded SH-7 for increase in capital and charge forms from the scheme and clarification is issued for DIR 3 KYC and Active tagging can be filed with no fee.
      All regular forms will be able to file without late fee.

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