In order to support and enable Companies and Limited Liability Partnership (LLPs) in India to focus on taking necessary measures to address the COVID-19 threat, including the economic disruptions caused by it, the Ministry of Corporate Affairs has come out with a BIG RELIEF for all defaulting Companies/LLPs and DIN holders.
RELIEF 1: INTRODUCTION OF COMPANIES FRESH START SCHEME, 2020 (CFSS-2020)
It has introduced COMPANIES FRESH START SCHEME 2020 (“the Scheme”) vide Circular 12/2020 dated 30/03/2020 which applies to all companies in India. It shall come into force on 1.4.2020 and remains effective till 30th Sep 2020.
OPPORTUNITY FOR DEFAULTING COMPANIES:
Under Companies Act, 2013, the companies are required to file, submit various forms, returns, documents, financial statements etc. on time to time basis therefore the Ministry has provided a one-time opportunity to all companies to file their pending Annual Returns (e-form MGT-7), financial statements (e-form AOC-4) and other documents WITHOUT any additional fees. Only normal fees for filing of the documents in the MCA21 registry will be payable during the effective period of the Scheme.
IMMUNITY FROM PROSECUTION:
Further, the Scheme provides immunity to defaulting companies or its officers in default in relation to prosecution or proceeding for imposing an additional penalty for not filing of belated documents. This Scheme doesn’t provide immunity on any other consequential proceedings including proceeding involving the interest of any shareholder of the company or its directors or key managerial personnel etc.
OPPORTUNITY FOR INACTIVE COMPANIES:
The Scheme gives an opportunity to the inactive company to convert into a dormant company under section 455 of Companies Act, 2013 by filing form MSC-1 with nominal fees & help the inactive companies to remain on ROCs register with minimum compliance requirement.
NON-APPLICABILITY OF THE SCHEME:
1. Companies against which action for final notice for striking off the name under section 248 of the Companies Act, 2013 or under section 560 of Companies Act 1956 has already been initiated.
2. Where Company has already filed STK-2 for strike off of Company with ROC.
3. Companies which have amalgamated
4. Whether application has already been filed for obtaining Dormant Status.
5. To Vanishing Companies
6. Charge related documents (CHG-1, CHG-4, CHG-8 and CHG-9)
7. Increased in authorized capital (Form SH-7).
APPLICATION FOR IMMUNITY CERTIFICATE (E-FORM CFSS-2020)
All the companies, who has filed any belated document or form under this scheme, need to make an application in e-form “CFSS-2020” (annexed hereinafter) without any fees with designated authority (ROC/RD) through MCA portal to availed immunity under this scheme after closure of this scheme and after document(s) are taken on record by the designated authority but not later than 6 month from the expiry of this scheme.
NO APPLICATION FOR IMMUNITY:
No immunity shall be granted:
1. for any appeal pending in the court in case of company’s management disputes;
2. for any case of conviction ordered passed by a court or adjudicating authority and no appeal has been preferred against such order before the scheme came in enforce.
Based on the e-form CFSS-2020 filed by the Companies, an immunity certificate in respect of documents filed under this scheme shall be issued by designated authority
OTHER BENEFITS UNDER THE SCHEME:
1. Special measures for cases where the order of the adjudicating authority was passed but the appeal could not be filled: 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 shall be allowed for filing of appeal from last date as may be specified under the order.
2. The companies, who has filed appeal against any notice issued or complaint filed or an order passed by a court or by any adjudicating authority, can also submit application for issue of immunity certificate if they withdraw their appeal and furnish the proof of such withdrawal with the application.
RELIEF NO 2: FOR DEFAULTING LLPs
MCA earlier has issued “LLP Settlement Scheme (the Scheme)” dated 4th March, 2020 where it had provided an opportunity to all defaulting LLPs to file their pending documents or forms with ROC by paying a late fee of Rs. 10 per day subject to maximum of Rs. 5,000/- per form (earlier it was Rs. 100 per day without any maximum limit).
Now, the MCA has further amended this Scheme and completely waived off the additional fees. So, the defaulting LLPs now file their pending documents or forms with ROC WITHOUT any additional fees.
Further, the defaulting LLPs, which have filed their belated documents till 30th September, 2020 and made good the default, shall not be subjected to any prosecution for such defaults.
The revised effective date of the Scheme shall be from 1st April, 2020 till 30th September, 2020
RELIEF NO 3: For DIN Holder and Registered office KYC Compliances
DIN holders of DINs marked as ‘Deactivated’ due to non-filing of DIR-3KYC/DIR-3 KYC-Web and those Companies whose compliance status has been marked as “ACTIVE non-compliant” due to non-filing of Active Company Tagging Identities and Verification(ACTIVE) e-form are encouraged to become compliant once again in pursuance of the General Circular No. 11 dated 24th March, 2020 & General Circular No.12 dated 30th March 2020 and file DIR-3KYC/DIR-3KYC-Web/ACTIVE as the case may be between 1st April, 2020 to 30th September, 2020 without any filing fee of INR 5000/INR 10000 respectively.
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