Companies Fresh Start Scheme, 2020

OVERVIEW & PURPOSE

The Ministry of Corporate Affairs, in pursuance of the Government of India has introduced the “Companies Fresh Start Scheme, 2020” (CFSS-2020) to provide a first of its kind opportunity to companies to make good any filing related defaults, irrespective of duration of default, and make a fresh start as a fully compliant entity.

1. This is a One time opportunity to the companies to enable them to complete their pending compliances by filing necessary documents in the MCA-21 registry including annual filings without being subject to a higher additional fees on account of any delay.

2. The Scheme shall come into force on the 1st April, 2020 and shall remain effective up to 30 th September, 2020 (both days inclusive).

3. It Provides an opportunity to inactive companies to get their company declared as a dormant company through a simple application without additional fee.

Applicability of Companies Fresh Start Scheme 2020

1. Defaulting Company: which has not filed any document, statement, return etc. including annual statutory documents, which were due for filing on any given date in accordance with the provisions of this Scheme.
2. Inactive Company: The scheme gives an opportunity to inactive companies to get such an inactive company declared as „dormant company‟ under section 455 of the Act by filing a simple application at a normal fee. The said provision enables inactive companies to remain on the register of the companies with minimal compliance requirements.

Non Applicability:

1. Companies has already filed application for strike off or  Final notice of “Strike off” Under Section 248 already initiated by Designated authority
2. Before filing any pending compliance make sure DIR-3 kyc to be filed and INC-22A is already filed i.e Co. need to have active status for availing the facility under this scheme.
3. Disqualification in any way will not get cured under this scheme.
4. Companies which have amalgamated under the Scheme of arrangement or compromise under the act;
5. Where a company has already filed the Application for obtaining Status of Dormant Company U/s 455 of the act;
6. Vanishing companies
7. Forms Regarding Increasing In Authorised Capital Form SH-7, Charge Related forms, CHG-1, CHG-4, CHG-8, & CHG-9
8. If you already filed the form with additional fee then there is no refund and the amendment is not retrospective.

Immunity under CFSS 2020

Defaulting companies shall get immunity against only to the penalties or prosecution associated with the late filing Additional Fees but any consequential proceeding including proceedings related to the interest of any person/director/KMP/shareholder are not covered under the Immunity under this CFSS-2020 Scheme.

Non eligibility to obtain Immunity Certificate

1. An appeal is pending in court against the company.
2. In case of management disputes pending before any court of law or Matter of ordered conviction
3. Where an order is passed by the court and no appeal has been made before the scheme came into force.

Effect of  Immunity Certificate

After granting the immunity, the ROC office shall withdraw the prosecution(s) pending, if any, before the concerned court(s)  and the proceedings of adjudication of penalties under section 454 of the Act.
It  doesn’t cover  other provisions of law. CFSS 2020 cannot provide any immunity for condonation of delay, charge related matter; or Insolvency & Bankruptcy Code, 2016 or any other applicable law of the land.