CA Pooja Madhan

The Ministry of Corporate Affairs Vide its General Circular No. 12/2020 Dated 30/03/2020, has launched the Companies Fresh Start Scheme 2020 that offers the condonation of delay with regard to filing of various forms, returns and documents with Ministry of Corporate Affairs (MCA).

Key Highlits of Companies Fresh Start Scheme 2020 (CFSS 2020) is listed below;

  1. The CFSS 2020 Scheme will be enforceable from 1st April, 2020 to 30th September, 2020.
  2. Defaulting Companies are eligible to file their belated returns with the MCA without any additional fee payable on account of delay from 1st April, 2020 to 30th September, 2020.
  3. The fee payable by the defaulting company will be the normal fee which is payable under the Companies (Registration Offices and Fee) Rules, 2014.
  4. An E-Form CFSS-2020 is required to be filed by the defaulting company to avail the benefits of the scheme with effect from 1st April, 2020, but before the expiry of six months from the date of closure of the scheme.
  5. On Successful filing of the pending returns, documents and forms, along with CFSS-2020 form for the grant of immunity, based on the declaration made by the defaulting company in Form CFSS-2020, the designated authority shall issue the certificate of immunity in respect of documents filed under the scheme.

The Scheme will not apply in certain cases;

  1. To the Companies against which action of final notice u/s 248 for the striking off has already been issued.
  2. Where any Company has already made an application to the designated authority for striking off its name from the Register of Companies.
  3. Companies amalgamated under a scheme of arrangement or compromise under the Act.
  4. Where the Company has already made an application under section 455 of the Act for obtaining the status of a dormant company before this scheme.
  5. Vanishing Companies;
  6. In case of increase in authorized capital is involved.

Benefits to Inactive Companies;

While filing due documents under CFSS-2020, the defaulting inactive companies can simultaneously choose either of the below mentioned options:

  1. Declare itslef Dormant Company under section 455 of Companies Act, 2013 by filing e-form MCS-1 by paying the normal fee applicable on the form,
  2. Apply for the striking off the name of the company from the register of companies by filing Form STK-2 along with prescribed fee.

Special Cases;

  1. If the defaulting company has already filed an appeal against any notice, complaint, order passed by court or by any adjudicating authority, such company can file the application under this Scheme only after withdrawing such appeal, and the proof of such withdrawal need to be furnished along with the E-Form CFSS-2020.
  2. Where the order of penalties have been passed by the adjudicating authority and no appeal has been filed by the company;
  3. Where the last date of filing of appeal falls between 1st March, 2020 to 31st May, 2020, a period of 120 additional days shall be allowed to file an appeal;
  4. Provided during such additional period, no prosecution shall be initiated against the company and its offices.

Companies eligible but not availing the Scheme;

At the conclusion of the Scheme, the Designated Authority shall take necessary actions under the Act against such defaulting companies.