Overview – Company Fresh Start Scheme 2020
Companies Fresh Start Scheme, 2020.
In order to facilitate the companies registered in India to make a fresh start on a clean slate, the Ministry of Corporate Affairs has decided introduced Companies Fresh Start Scheme, 2020.
Annual Filings by Companies
Companies Act, 2013 requires all companies to make annual statutory compliance by filing the Annual Return and Financial Statements. Apart from this, various other statements, documents, returns, etc are required to be filed on the MCA21 electronic registry within prescribed time limits. Delay in filing these returns will attract penalty fine and penal actions asper Companies Act.
One Time Opportunity
In order to give an opportunity to the defaulting companies and to enable them to file the belated documents, MCA has introduced “Companies Fresh Start Scheme, 2020 (CFSS-2020) for condoning the delay in filing the returns with the Registrar, insofar as it relates to charging of additional fees, and granting of immunity from launching or prosecution or imposing penalty.
Fee Payable for CFSS
Only normal fees for filing of documents in the MCA-21 registry will be payable in such case during the currency or CFSS-2020. There will not be any additional fee for any documents.
Every defaulting company shall be required to pay normal fee as prescribed under the Companies (Registration Offices and FCC) Rules, 2014 on the date of filing of each belated document and no additional fee shall be payable.
Applicability of CFSS
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:
Immunity from the launch of prosecution or proceedings for imposing penalty shall be provided only to the extent such prosecution or the proceedings for imposing penalty under the Act pertain to any delay associated with the filings of belated documents.
Application for issue of immunity under the CFSS
An application for seeking immunity in respect of belated documents filed under the Scheme in the Form CFSS-2020, after closure of the Scheme and after the document(s) 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 or the Scheme. There is no fee payable on this Form.
Scheme not to apply
This scheme shall not apply
- * to companies against which action for final notice for striking off the name u/s 248 of the Act (previously section 560 of Companies Act. 195j has already been initiated by the ROC.
- * where any application has already been filed by the companies for action of striking off the name of the company from the register of companies;
- * to companies which have amalgamated under a scheme of arrangement or compromise under the Act;
- * where applications have already been filed for obtaining Dormant Status under section 455 of the Act before this Scheme
- * to vanishing companies;
- * Where any increase in authorized capital is involved (Form SH7)
- * also charge related documents (CHG-I, CHG-4. CHG-8 and CHG-9);
Company Fresh Start Scheme (CFSS) 2020 – Requirements
“Defaulting company” means company defined under the Companies Act, 2013, and which has made default in filing of any or the documents, statement, returns, etc including annual statutory documents on the MCA-21 registry
Company Fresh Start Scheme 2020 – Process
Identify the Pending ROC Returns
Assess the filing status of the Company and Identify the pending returns by the company.
File the Returns Before 30th September 2020
File all the returns before 30th September 2020 to avail the scheme
Audited Financial Accounts
Get the audited Annual Accounts ready for filing with the office of ROC
Secretarial Records and Board Minutes of Company
It is necessary to get Secretarial Records and Board Minutes of Company ready before filing ROC returns
Annual Return of Company
Need to compile shareholders and directors details for Annual Return of Company
Benefits : Company Fresh Start Scheme 2020
No Penalty / Additional Fee
Under CFSS, no company has to pay any additional Fee/ penalty for any filing
Immunity from prosecution / penalty.
Companies can claim immunity from prosecution / penalty under Companies Act.
Immunity certificate under CFSS-2020
ROC will issue an immunity certificate in respect of documents filed under this Scheme.
Effect of immunity
The company shall be deemed to have complied all the requirements as to filing of reruns and there will nor be any further action from the office of ROC.