The Ministry of Corporate Affairs (MCA) vide its General Circular No. 12/2020, comes up with the Companies Fresh Start Scheme, 2020 for one-time application of condonation of delay of filling the various documents, forms, returns etc. with the MCA.
Let us have a quick review:
FEW SPECIAL CASES
FEW CASES ON WHICH THIS SCHEME SHALL NOT APPLY
1. To companies against which action for final notice for striking off the name u/s 248 of Companies Act has already initiated by the designated authority (the RoC).
2. Where an application had already been filled by the company for action of striking off the name of the company from the ROC.
3. Companies which have amalgamated under a scheme of arrangement or compromise under the act.
4. Where an application has already been filled for obtaining the status of Dormant Status.
5. To vanishing companies.
6. Forms related to increase in authorize capital (SH-7) and charge related documents (CHG-1, CHG-4, CHG-8 and CHG-9)
EFFECT OF IMMUNITY
The designated authority shall withdraw the prosecutions before any courts and proceedings pending before adjudicating authority in respect of which the immunity has been granted by the designated authority.
SCHEME FOR INACTIVE COMPANIES
Defaulting inactive companies while filling application under Form CFSS-2020, may also file:
1. Form MSC-1 to obtain the status of Dormant Company.
2. Form STK-2 for striking off the name of company.
Note: Immunity shall only be provided to the extent, it pertains to any delay associated with the filling of belated documents with the MCA 21, and not for the Non Compliance.
MEANING OF VANISHING COMPANIES
Vanishing Companies are those companies which had raised funds from public through initial public offers (IPOs) and subsequently failed 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.
Thus, a company would be deemed to be a vanishing company, if it is found to have:
About the Author
Author is Divya Goel, ACS working as Assistant Manager- Company Secretary with Neeraj Bhagat & Co. Chartered Accountants, a Chartered Accountancy firm helping foreign companies in setting up business in India and complying with various tax laws applicable to foreign companies while establishing their business in India.