About the Companies Fresh Start Scheme, 2020:

In order to facilitate the Companies registered in India to make a fresh start on a clean slate and to give such an opportunity to defaulting Companies by enabling them to file the belated documents in MCA-21 registry, the Central Government has introduced a scheme namely Companies Fresh Start Scheme, 2020 (CFSS – 2020)” condoning the delay in filing the forms.

It is a Scheme condoning the delay in filing the documents with Registrar (ROC), in so far it relates to:

  • Charging of additional fee;
  • Granting of immunity from launching of persecution or proceedings for imposing penalty on account of delay associated with certain filings.

Only normal fees will be payable in such cases during the currency of CFSS-2020

The immunity under this scheme shall only be availed in respect of the proceedings for imposing the penalty on account of delay in filing the form but not on account of any other default.

The Scheme shall come into force on the 01.04.2020 and shall remain in force till 30.09.2020.

Applicability of Companies Fresh Start Scheme, 2020:

– The Scheme is applicable to all the Companies which are defaulted in filing any forms within the due date.

The Companies revived by Order of NCLT and the status of which has become “Active” before 30.09.2020 can avail the benefits under this scheme.

– The Scheme is applicable to the forms like

  • AOC-4 – filing of Balance Sheet
  • MGT-7 – filing of Annul Return
  • INC-22 – Shifting of Registered Office
  • MGT-14 – filing of Resolutions
  • ADT-1 – Appointment of Auditors
  • PAS-3 – Return of Allotment
  • Any other Form

Except the following:

  • SH-7 – for increase in Authorized Capital
  • Charge Related Forms (CHG-1, CHG-4, CHG-8 and CHG-9)

Non-applicability of Companies Fresh Start Scheme, 2020:

The Scheme shall not apply to:

– To Companies against which action for final notice for striking off the name under Section 248 of the Companies Act, 2013 has already been initiated by the Designated Authority

– Where Company has already filed application for strike off with ROC in form STK-2

– Companies which have amalgamated under a scheme of arrangement or compromise

– Where Company has already filed application to obtain the Status of Dormant Company

– To Vanishing Companies

Special measures for cases where order of adjudicating authority was passed but appeal could not be filed:

In all the cases where due to delay associated in filing of any documents, penalties were imposed by adjudicating officer under the Act, and no appeal has been preferred before the Regional Director as on the date of commencement of the scheme, the following would apply:

  • Where the last date for appeal under Section 454(6) against such order falls between 1st March to 31st May, 2020, an additional period of 120 days shall be allowed from such last date for filing the Appeal
  • During such additional period, prosecution under section 454(8) for non-compliance of the order of the Adjudicating Authority, in so far as it relates to delay associated in filing of any documents in MCA-21, shall not be initiated against such Companies and its officers.

Application for issue of immunity in respect of documents filed under Companies Fresh Start Scheme, 2020:

The Application for seeking immunity in respect of the belated documents filed under the Scheme shall be made electronically in Form CFSS-2020

  • after the closure of the scheme; or
  • documents are taken on record / approved by the Designated Authority; but
  • before expiry of months from the date of closure of the Scheme

There shall not be any fees payable on the above Form.

Effect of the Companies Fresh Start Scheme, 2020

  • No additional fees for filing the belated forms irrespective their due dates
  • Company shall apply and get the Immunity Certificate. The onus of applying and getting the certificate will be on the Company.
  • The Designated Authority shall withdraw the prosecutions pending regarding such forms or documents
  • The Designated Authority shall withdraw the adjudication of penalties.
  • In respect of the defaults against which immunity has been so granted shall be deemed to have been completed without any further action on part of Designated Authority.

At the conclusion of the scheme the designated authority shall take necessary action under the act against the companies who have not availed this scheme and are defaulted in filing the documents

The Notification in this regard is available on the following link:

https://taxguru.in/company-law/companies-fresh-start-scheme-2020.html

(Author can be reached at shrinath@charteredassociates.com)

Author Bio

Qualification: CS
Company: N/A
Location: Bangalore, Karnataka, IN
Member Since: 26 Feb 2019 | Total Posts: 13
I am an Associate Member of Institute of Companies Secretaries of India and a Practicing Professional having office in Bangalore. I have experience in legal and Company Secretarial matters, Trade Mark law, IBC and other allied laws. View Full Profile

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