MCA vide circular No. 11/2020 dated 24th March, 2020 has taken certain measures, to address COVID -19 including economic disruptions caused by it, for companies in order to reduce their compliance, burden and other risks and notified Company Fresh Start Scheme 2020 for defaulting Companies to give them an opportunity to be Legal Compliant under Companies Act, 2013–
|1.||The Ministry has launched a scheme Known as “Company Fresh Start Scheme 2020”||No additional fees shall be charged for late filing during a moratorium period from 01st April to 30th September, 2020, in respect of document, return, statement etc. required to be filed in the MCA- 21 Registry irrespective of its due date.|
|2.||Relaxation in holding Board Meeting within 120 days||Now a further gap of 60 days stands allowed for a meeting to be held in next two quarters for f.y. 2020-2021. So that the gap between two board meetings can be up to 180 days till September, 2020.|
|3.||Companies (Auditor’s Report) Order, 2020||Applicability of Companies (Auditor’s Report) Order, 2020 for financial year 2020-21 instead of being applicable for financial year 2019-20.|
|4.||Independent Directors are required to hold a meeting without the presence of Non Independent Directors and members.||For Financial Year 2019-20, if they could not been able to hold such a meeting the same shall not be viewed as violation.|
|5.||Companies accepting Deposits under Section 73 are required to create a reserve of 20% of the Deposits by 30th April 2020.||Now those Companies can do the same by 30th June, 2020|
|6.||Requirement under rule 18 of the Companies (Share Capital & Debentures) Rules, 2014 to invest or deposit at least 15% of amount of debentures maturing in specified methods of investments or deposits before 30th April 2020.||Now those Companies can do the same by 30th June, 2020|
|7||Newly incorporated companies are required to file a declaration for Commencement of Business within ‘180 days of incorporation under section 10A of the Companies Act, 2013||Additional 180 days been allowed to comply the same|
COMPANY FRESH STARTUP SCHEME, 2020
“NO ADDITIONAL FEES WILL BE CHARGED FOR FILLING
IMMUNITY WILL BE PROVIDED TO THE OFFICERS OF THESE DEFAULTING COMPANIES UP TO 30th SEPTEMBER, 2020
1. What is Company Fresh Startup Scheme 2020?
The Ministry of Corporate Affairs has provided a one time opportunity to companies to make a “Fresh Start” in their life by issuing a General Circular No. 12/2020 dated 30th March 2020.
MCA introduced a scheme called ‘COMPANIES FRESH START SCHEME 2020 (CFSS-2020)’.
2. Benefit to Company
3. Applicable For:
4. Time Period: The Scheme shall come into force on 01.04.2020 and shall remain in force till 30.09.2020.
5. In case of any appeal filed for any Order issued by Authorities under MCA, to seek Immunity under this Scheme that appeal is required to be withdrawn.
6. After Closure of Scheme, one form CFSS – 2020 shall be available to be filed by the defaulting Companies and for documents filed under this scheme during Apr-Sep 2020, within 6 months of Closure of the Scheme (Effectively this CFSS-2020 to be filed by 31st March, 2020.
7. This Scheme of Immunity shall not be applicable for any cases pending before the Court of Law of in case of Management Disputes under c
8. Based on Declaration made under CFSS-2020, Immunity Certificate will be provided by Designated Authority.
SCHEME NOT APPLICABLE IN CERTAIN CASES
Vanishing company means a company, registered under the Companies Act, 1956 and listed with Stock Exchange which, has failed to file its returns with Registrar of Companies and Stock Exchange for a consecutive period of two years, and is not maintaining its registered office at the address notified with the Registrar of Companies or Stock Exchange and none of its directors are traceable.
Criteria for identification of a vanishing company:
A company would be deemed to be a vanishing company, if it is found to have:
(a) Failed to file returns with Registrar of Companies (ROC) for a period of two years;
(b) Failed to file returns with Stock Exchange (SE) for a period of two years (if it continues to be a listed company);
(c) It is not maintaining its registered office of the company at the address notified with the Registrar of Companies/ Stock Exchange; and
(d) None of its Directors are traceable.
(i) All the conditions mentioned above would have to be satisfied before a listed company is declared as a vanishing company;
(ii) The conditions mentioned at (a), (c) & (d) would suffice to declare a company as vanishing, if such company has been de-listed from the Stock Exchange.
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