Immunity dose for Defaulting Companies- Companies Fresh Start Scheme, 2020 (CFSS 2020) | Frequently Asked Questions
Amid all the chaos of COVID-19, MCA and SEBI are issuing notifications, orders, regulations, guidelines and advisories to give relaxations for their mandatory compliance. In additions to these, MCA has come out with Companies Fresh Start Scheme, 2020 (Scheme) with its circular dated March 24, 2020. This Circular termed this scheme a fresh start on a clean start. We call it immunity dose for defaulting companies by the Ministry because after this Registrar of Company(s) will withdraw the prosecution and their compliant health status will become similar to law-abiding companies.
Q 1. What is the validity of the Scheme?
Ans. Validity of the scheme CFSS-2020 is for 6 months from 01.04.2020 to 30.09.2020
Q 2. What is the Scheme?
Ans. Any defaulting company will be permitted to file belated documents which were due for filing on any given date. The scheme will help all the defaulting companies to complete their pending compliance by filing necessary documents/forms etc. with Ministry including annual filing without any additional fees.
Q 3. On which companies this scheme is applicable?
Ans. The scheme is applicable on Defaulting Companies.
Q 4. What is the meaning of defaulting companies?
Ans. Defaulting Companies means a Company defined under Companies Act, 2013 and companies which has made a default in filing of
-Any of documents,
-Any of Statement,
-Any of Return etc
-including Annual Statutory documents.
Q 5. What shall be per day additional fees as per Scheme?
Ans. MCA shall not charge any additional fees within the validity of period i. e 6 months. Only Normal Fees of the Forms shall be required to pay the Companies.
Q 6. What forms, returns etc., can be filed under the Scheme?
Ans. All forms including annual forms like AOC-4, MGT-7 can be filed under the Scheme.
However, following forms cannot be filed:
Q 7. Non Applicability of the Scheme?
Ans. The “Companies Fresh Start Scheme,2020” shall not apply to the following:
Q 8. What immunities are available under the Scheme?
Ans. Immunity from prosecution to the extent of default connected with non-filing of form; and immunity from proceedings related to adjudication of penalty under Section 454.
However, immunity has not granted from any consequential proceedings including any proceedings involving interests of any shareholder or any other person qua the Company or its Directors or KMP.
For example, immunity against non-filing of form PAS-3 under Section 42, can be availed under the Scheme by filing the Form but immunity from consequential defaults arising on account of default like utilizing of application money without the filing the Form PAS-3, will not be granted.
Q 9. What are the circumstances under which immunity is not available under the Scheme?
Ans. No immunity shall be available in the following cases:
Q 10. What is certificate of immunity?
Ans. Where prosecution has been initiated against any company and its officers before any court under the Act or where proceeding for adjudication of penalty has been initiated under Section 454 of the Act then the certificate should be obtained in all cases, so that immunity can be availed against any future prosecution or adjudication of penalty proceedings.
Q 11. What is pre-condition for availing immunity?
Ans. Where the defaulting company has filed any appeal against the order passed by a court or by an adjudicating authority, the applicant shall withdraw such appeal and furnish proof of such withdrawal before filing an application for issue of immunity certificate.
Q 12. Cases in which immunity is not available under the Scheme?
Ans. No immunity shall be available under the Scheme in the following cases:
Q 13. Which form is required to be filed in application for issue of immunity?
Ans. Once belated filing has been made under the scheme, for availing immunity certificate there is to file eForm CFSS-2020 within 6 months of closure of the Scheme without payment of any fees.
Q 14. Is there any benefit when adjudication order under Section 454 has been passed but no appeal has been filed against the same?
Ans. Where adjudication order has been passed under Section 454 with respect to any default on account of non-filing of any form, return or statement etc., but no appeal has been preferred to the Regional Director against the said order as on the date of commencement of the Scheme, following benefits have been provided:
Q 15. What benefit can be availed by the defaulting inactive companies under the scheme?
Ans. Defaulting inactive companies, while filing due documents under the scheme can, simultaneously, either:
(All views expressed in the Article are my own and do not represent the opinions of any entity whatsoever with which I have been, am now or will be affiliated.)