Companies Fresh Start Scheme, 2020 (CFSS-2020)

Companies Fresh Start Scheme, 2020 (CFSS-2020)

Under The Companies Act, 2013, All companies are required to make annual statutory compliance by filing the Annual Return and Financial Statements. Apart from that, various other statements, documents, returns etc. are required to be filed with MCA. However there are many companies who have defaulted in compliances under the Companies Act, 2013 and filing with ROC/ MCA.

Ministry of Corporate Affairs, Government of India, on receipt of representations from various stakeholders,  vide General Circular No. 12/2020 dated 30/03/2020 has given an opportunity to file the belated documents with MCA and complete their pending compliances.

Details of the Scheme are as follows:

1)     Name of the Scheme

Companies Fresh Start Scheme, 2020 (CFSS-2020)

2)     Time period of Scheme

The scheme shall be available w.e.f. 01-04-2020 and shall remain in force till 30-09-2020.

3)     Few Definitions for the purpose of this scheme:

a)     “Act” means the Companies Act, 2013 and Companies Act, 1956 wherever applicable;

b)    Companies means a company as defined under Companies Act, 2013;

c)     “Defaulting Company” means a company defined under the Companies Act, 2013 and which has made default in filing of any of the documents, statement, returns etc. including annual statutory documents on the MCA-21 registry;

d)    “Designated Authority” means the Registrar of Companies having Jurisdiction over the registered office of the company;

e)     “Immunity Certificate” means the certificate referred to in sub-paragraph [viii] of paragraph 6 of the scheme

f)      “Inactive Company” means a company as defined in Explanation (i) to sub-section 1 of section 455(1) of the Companies Act, 2013

4)     Applicability of the Scheme

Any defaulting company is permitted to file belated documents which were due for filing on any given date in accordance with the provisions of this scheme

5)     Filing Fees for Belated Documents

Normal fees as applicable as on date shall required to be paid for filing of such documents and no additional fees shall be payable thereon.

6)     For Inactive Company

The defaulting companies while filing due documents under CFSS, 2020 can simultaneously file either

Ø  to get their companies declared as “Dormant Company” by filing a simple application at a normal fee. This will help inactive companies to remain on the register of the companies with minimal compliance requirements. They need to file MSC-1 with nominal fee on said form.

Or,

Ø   file STK-2 for striking off by paying fee payable for STK-2

7)     Things to be Done before filing of application for immunity certificate

The Company has to withdraw appeal and furnish proof of such withdrawal along with the application for granting immunity certificate in cases where appeal was filed for non-compliances of provisions of the Act related to filing of statutory filing.

8)     Filing of Application for issue of Immunity Certificate

Application for seeking Immunity from launch of prosecution or proceedings for imposing penalty for delay in filing of documents with MCA21 registry is required to be filed in Form CFSS-2020.

This form can be filed before expiry of 6 months from the closure of the Scheme. There is no filing fee for this form.

9)     Immunity Shall not be available in case

Ø  Where any appeal is pending in the matter of any appeal pending before the Court of Law and in case of management disputes of the company pending before any court of law or tribunal

Ø  Where any court has ordered conviction in any manner or an order imposing penalty has been passed by an adjudicating authority under the Act, and no appeal is preferred before this scheme has come into force.

10)Order granting Immunity Certificate

Immunity certificate granting immunity from penalty and prosecution shall be granted by Designated Authority on the basis of declaration filed in form CFSS, 2020.

11)Effect of Immunity

After granting the immunity, the Designated Authority shall withdraw the prosecution pending before the concerned court and proceedings of adjudication of penalties under section 454 of the Act. Defaults against which immunity was granted shall be deemed to have completed without any further action on the part of the Designated Authority

12) Scheme not applicable in certain cases

a)     Companies against which final notice of strike off has already been initiated

b)    Where application has already been filed for strike off of the company

c)     Companies which have been amalgamated

d)    Where application has been filed for dormant status under section 455 of the Act

e)     To vanishing companies

f)      Where any increase in authorised capital is involved and also charge documents

[Source: https://www.mca.gov.in/Ministry/pdf/Circular12_30032020.pdf ]

DISCLAIMER

The material and information contained in this blog are for general information purpose only.  Though we have made every efforts to make our interpretation correctly, we do not make representation either express or implied about the completeness or correctness of the subject matter.  Under no circumstances the author is not responsible / liable for any loss or damage caused to anyone due to any mistake / error / omissions.