The Ministry of Corporate Affairs (MCA) vide its General Circular No. 11 dated 24th March 2020 and 12/2020, comes up with the Companies Fresh Start Scheme, 2020 for a one-time application of amnesty of delay of filling the various forms, documents, returns, etc. with the MCA.
Earlier Company Settlement Schemes introduced by MCA in 2010,2011, 2014,2018, and this time in 2020.
CFSS 2020 is a one-time opportunity to clear all belated defaults and make a new beginning of the Financial Year 2020-2021.
The form CFSS-2020 is self-declaration –based form.
To avail, the benefit of the scheme existing director of Defaulting Companies has to compulsorily have to file form DIR 3 KYC.
Defaulting company means a company which has made a default in filing of any of the documents, returns, statement, etc. including annual statutory documents (AOC-4 & MGT- 7) on the MCA.
Inactive Company means a company which, during the last two financial years, has not been carrying on any business or operation, or has not made any significant accounting transaction, or has not filed annual returns and financial statements during the last 2 financial years.
- This Scheme is effective from 1st April 2020 and will last till 30th September 2020.
- CFSS, 2020 Applicable to all defaulting company is permitted to file its belated compliances with the MCA within months without payment of additional fees on account of any delay.
- Every Defaulting Company shall be required to pay as prescribed under the Companies Act, no additional fees are required.
- The Application may be made electronically in the Form CFSS-2020 to avail such benefit.
- On filing, Recording, and approving from documents forms and returns by the Defaulting Companies, the Designated Authority shall issue an Immunity certificate within 6 months from the closer of the scheme.
SOME SPECIAL CASES
- If Defaulting Company has filed an appeal against any notice, order, complaint passed by a court, or by an adjudicating authority, it can file an application under this scheme for immunity certificate only after withdrawing from such appeal and furnishing proof of such withdrawal with the application CFSS-2020.
- Where an order of Penalties was imposed by adjudicating officer on companies because of delay of filing documents and no appeal has been filled as on today
- Where the last date for filing appeal falls between 1st March 2020 to 31st May 2020, a period of 120 days additional days shall be allowed to file an appeal, provided that no prosecution shall be initiated against the company and its officers.
SOME CASES ON WHICH THIS SCHEME SHALL NOT APPLY
- Companies against which action for final notice for striking off the name u/s 248 of Companies Act have already initiated by the designated authority (the ROC).
- Where an application already filled by the company for the action of striking off the name of the company from the ROC.
- Companies that have amalgamated under a scheme of compromise or arrangement under this act.
- An application has been already been filled for obtaining the status of Inactive Status.
- Form SH-7 in order to increase authorized share capital and Form CHG-1, CHG-4, CHG-8, CHG-9 related to charging.
- To Vanishing Companies
EFFECT OF IMMUNITY CERTIFICATE
The Designated Authority shall withdraw the prosecution before any court and proceeding pending before Adjudicating authority in respect of which the immunity has been granted by the Designated Authority.
Scheme for In-active Company
The inactive company can also take the status of Dormant Company u/s 455 by filing a simple application in FORM MSC-1 can apply for striking off the name by filing e-form STK-2 With normal fees.
