The Central Government in the exercise of powers have introduced the COMPANIES FRESH START SCHEME, 2020 (CFSS-2020), It shall facilitate the companies registered in India to make a fresh start. This scheme aims at providing a one-time opportunity to enable defaulting companies to complete their pending compliances by filing necessary documents in the Ministry of Corporate Affairs including annual filings forms, other returns, documents and statements without paying additional fees on an account of delay and to avail immunity from the launching of prosecution or proceedings for imposing a penalty on account of delay associated with certain filings. In other words, defaulting companies shall require to pay only normal fees for filing of the above-mentioned delayed documents during the currency of CFSS-2020.
This Scheme shall be applicable to any “Defaulting Company”, Defaulting Company here means any company which made a default in filing of any of the documents, statement, returns, etc. including annual statutory documents on the MCA-21 registry on due time and under this scheme is permitted to file all belated documents which were due for filing without any Additional Fees except for two documents and out of which, some permitted documents are as follows:
- Annual Forms:
- Annual Return -MGT-7
- Financial Statements – AOC-4
- Event-based Forms:
- INC-22A (Active Company Tagging Identities and Verification)
- INC-20A (Declaration for the commencement of business)
- PAS-3 (return of Allotment)
- ADT-1 (Appointment of Auditor)
- MGT-14 (Filing of Resolutions and agreements to the Registrar)
- DIR-12 (Particulars of appointment of Directors and the key managerial personnel and the changes among them)
- Two Exceptions which is out of the purview of this Scheme:
- Increase in Authorised Share Capital (SH-7)
- Charger related documents (CHG-1, CHG-4, CHG-8, and CHG-9)
- SCHEME VALIDITY: The Scheme shall come into force on 01st April 2020 and shall remain in form till 30th September 2020.
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- BENEFITS OF SCHEME
- One-time opportunity to enable defaulting companies to complete their pending compliances regarding: annual filings forms, other returns, documents and statements without paying any additional fees.
- Immunity Certificate to save from launching of prosecution or proceedings for imposing a penalty on account of delay associated with such filings.
- PROCEDURE TO AVAIL BENEFITS AND IMMUNITY IN RESPECT OF DOCUMENT(S) FILED UNDER THE SCHEME:
- STEP 1. File all pending forms, documents, returns, statements, etc. as mentioned above with the MCA-21 registry during the currency of the Scheme without paying any additional fees.
- STEP 2. File Form CFSS-2020 for seeking immunity in respect of belated documents filed under the scheme, after the closure of scheme and after the documents are taken on file or on record or approved by the designated authority as the case may be but not after the expiry of six months from the date of closure of the scheme.
- STEP 3. An immunity certificate in respect of documents filed under this scheme shall be issued by the designated authority.
- SCHEME FOR INACTIVE COMPANIES
The defaulting inactive companies, while filing due documents under CFSS-2020 can, simultaneously, either:
(a) Apply to get themselves declared as Dormant Company under section 455 of the Companies Act, 2013 by filing e-form MSC-1 at a normal fee on the said form; or
(b) Apply for striking off the name of the company by filing e-form STK-2 by paying the fee payable on form STK-2.
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- NON APPLICABILITY OF CFSS SCHEME:
- To Vanishing Companies.
- Companies against which action for final notice for striking off the name u/s 248 of the act have already been initiated by the Designated Authority.
- Companies that have already filed STK-2 for strike off of Company with ROC.
- Companies that have amalgamated.
- Companies that have already filed an application for obtaining Dormant Status.
- A company having any appeal which is pending before the Court of law.
- A company having management disputes and pending before any Court of law or Tribunal.
- Companies which are convicted by any Court in any matter and no appeal has been preferred against such orders of the Court before this Scheme has come into force
- Companies upon which an order passed for imposing penalty by an adjudicating authority under the Act and no appeal has been preferred against such orders of the Adjudicating Authority before this Scheme has come into force.
PROTIP: In such challenging times the Ministry has given all Companies an additional chance to make their default good. Therefore it is advisable to take full advantage of the scheme and strive towards becoming compliant.
Chartered Accountant by profession, CA Sanket Agarwal has an experience of above11 years in Cross Border compliance , Import Export , International Taxation & is a passionate content creator.