All about Companies Fresh Start Scheme 2020
Life doesn’t come with a re-set button but you can always give your life a fresh start anytime you choose. Similarly, the Ministry of Corporate Affairs(MCA) has come up with a scheme to provide a Fresh Start to the life of corporates.
The Ministry of Corporate Affairs has provided an opportunity to corporates to make a “Fresh Start” in their life by issuing a General Circular No. 12/2020 dated 30th March 2020. MCA introduced a scheme called ‘COMPANIES FRESH START SCHEME 2020 (CFSS-2020)’.
The salient features of this scheme have been discussed here:
Q1. What is the COMPANY FRESH START SCHEME 2020?
A1. To allow the defaulting companies and to enable them to file the belated documents, the Central Government in the exercise of powers conferred under section 460 read with section 403 of the Companies Act, 2013 has decided to introduce a scheme namely “COMPANIES FRESH START SCHEME- 2020 (CFSS-2020)” condoning the delay in filing the documents with Registrar of Companies.
Q2. What is the effective date of the scheme?
A2. The scheme shall be effective from 1st April 2020 to 30th September 2020.
Q3. To whom this scheme is applicable?
A3. Any “defaulting Company” is permitted to file belated documents, which were due for filing on any given date under the provisions of this Scheme.
Q4. What is ‘Defaulting Company’?
A4. “Defaulting Company” means a company defined under the Companies Act, 2013 and which has made a default in filing of any of the documents, statements, returns etc. including annual statutory documents.
Q5. For which forms this scheme is applicable?
A5. This scheme shall be applicable for filing all the forms except the following:
- Form SH-7 for an increase in Authorised Share Capital
- Form CHG-1, CHG-4, CHG-8 or CHG-9 (Charge Related forms)
Q6. To whom this scheme is not applicable?
A6. This scheme shall not apply:
- To companies against which action for final notice for striking off the name u/s 248 of the act has already been initiated by the Designated Authority.
- Where an application has already been filed by the companies in Form STK-2 for striking off the name of the company from the Registrar 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 companies are marked as ‘under CIRP’ or ‘Liquidation’ under the Act or as per the Insolvency and Bankruptcy Code, 2016.
Q7. What is the additional fee as per this scheme?
A7. There shall not be any additional fees for the given period of 6 months. Companies are required to pay only Normal Fees of the forms.
Q8. From which date Defaulting Companies can file forms under this scheme?
A8. The Defaulting Companies shall avail this scheme w.e.f 1st April 2020 and file all pending forms on or before 30th September 2020.
Q9. How to apply for the issuance of Immunity Certificate under this scheme?
A9. The application for seeking immunity in respect of belated documents filed under this scheme may be made electronically in the Form CFSS-2020 after the closure of the scheme and after the documents are taken on file or record or approved by the Designated Authority as the case may be but not after the expiry of 6 months from the date of closure of the scheme. There shall not be any fees payable on this form.
Q10. To whom immunity shall not be provided?
A10. The immunity shall not be provided in the following cases:
- if any appeal is pending before the court of law and in case of management disputes of the company pending before any court of law or tribunal.
- In case any court has ordered conviction in any matter or an order imposing any penalty has been passed by an adjudicating authority under the act and no appeal has been preferred against such orders of the court or of the adjudicating authority as the case may be before this scheme has come into force.
Q11. How the immunity certificate will be issued?
A11. Based on the declaration made in the Form CFSS-2020, an immunity certificate in respect of documents filed under this scheme shall be issued by the Designated Authority.
Q12. What is the Scheme for Inactive Companies?
A12. The defaulting inactive companies while filing pending documents under CFSS-2020 can either:
- 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; or
- Apply for striking off the name of the company by filing e-form STK-2 at a normal fee.
Q13. What will happen on the conclusion of this scheme?
A13. On the conclusion of this Scheme, the Designated Authority shall take necessary action under the Act against the companies who have not availed this scheme and are in default in filing these documents on time.
