“COMPANIES
FRESH START SCHEME 2020”
UNIQUE WINDOW OF OPPORTUNITY
FOR
“DEFAULTING
COMPANIES”!!!
Upon the COVID-19 outbreak which has shaken the
entire world Ministry of Corporate affairs has given light to sth to the ”Defaulting
Companies” to combat with economic disruptions and also to make a fresh
start on a clean slate, In furtherance to its General Circular No. 11/2020
dated 24th March, 2020 & vide its General Circular No. 12/2020
dated 30th March, 2020 by notifying “Companies Fresh Start
Scheme, 2020”
Ø Synopsis of Companies Fresh
Start Scheme-2020:
Legal
provision:
|
The Central Government in exercise of its power
u/s 460 of the Companies Act, 2013 read with section 403 has decided to
introduce a scheme namely "Companies
Fresh Start Scheme, 2020", by allowing
a One-time condonation
of delay in filing statutorily required documents with the
Registrar.
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Tenure of the Scheme
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1st April, 2020 up to 30th September,
2020.
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Scheme Applicable To:
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Defaulting Companies: 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.
"Defaulting Company" means a company defied under the Companies Act,
2013, and which has made default in filing of any documents, statement,
returns etc. including annual statutory documents on the MCA-21 registry.
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Payment of Fees as per
Companies Fresh Start
Scheme-2020:
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The defaulting Companies may file forms by making payment of normal fees as prescribed under the
Companies (Registration offices and Fee) Rules, 2014 on the date of filing of
each belated document and no additional fee is payable.
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Seeking Immunity under the
scheme:
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Immunity shall be granted to defaulting companies from launch of
prosecution and proceedings for imposing penalty to the extent to delay
associated with the filings of belated documents.
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Withdraw of Appeal:
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If a company has filed an appeal against any notice issued or
complaint filed or an order passed by a court or by an adjudicating authority
regarding statutory filing under the Act, then the company shall before
filing an application for issue of immunity certificate, withdraw such appeal
and furnish proof of withdraw of appeal along with application.
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In case order is passed
but appeal could not be filed:
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When any order regarding delay associated in filing of document,
statement or return etc. and penalties were imposed by an adjudicating
officer and appeal is not filed until 1st April 2020 and the last
date of appeal falls between 1st March 2020 and 31st
May, 2020, then additional period of 120 days i.e. until 28th
September, 2020 shall be given for filing an appeal before the concerned RD.
Also, No prosecution regarding non-compliance of order of adjudicating
authority shall be initiated against the company during such additional
period.
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Application for Issue of
Immunity:
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Application for seeking immunity regarding belated documents filed
under the scheme shall be made in e-Form
CFSS-2020 after closure of the scheme
and documents are taken on file or on record or approved by Designated
authority but before six months from closure of the scheme.
NO FEES PAYABLE FOR FILING THE FORM.
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Exception from Obtaining
Immunity:
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No immunity shall be provided if:
1)
An appeal is pending before the court of law and in case of management
disputes pending before the court of law or tribunal.
2)
An order of conviction has been passed by court or an order imposing
penalty has been passed by adjudicating authority and no appeal has been
filed before this scheme came into force.
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Issue of Immunity
Certificate:
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Designated authority shall issue Immunity certificate in respect of
documents filed under the scheme based on declaration made in Form CFSS-2020.
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Scheme Applicable to:
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All forms that are in the list of Eligible
hosted by Ministry of Corporate Affairs on MCA Portal.
Link for the same is:
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Scheme not Applicable to:
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i. Company
against which final notice of strike off has already initiated by designated
authority.
ii. Company
filed an application for striking off the name of the company from register
of companies.
iii. Companies
amalgamated under a scheme of compromise and arrangement.
iv. Company
filed application to obtain dormant status.
v. Vanishing
Companies.
vi. Where
Companies are marked as “under CIRP or liquidation”.
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Effect of Immunity
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After granting the
immunity, the Designated authority concerned 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, other
than those in which order conviction in any matter or order imposing penalty
has been passed, in respect of defaults against which immunity has been so
granted shall be deemed to have been completed without any further action on
the part of the Designated authority.
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Scheme for Inactive
Companies:
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When Defaulting Inactive
Companies files due documents under the scheme, then it can simultaneously,
either:
i. Make
an application for obtaining dormant status in form MSC-1 at a normal fee.
ii. Make
an application for striking off the name of the company from register of
companies in form STK-2 at a
normal fee.
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Upon Conclusion of Scheme:
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The Registrar shall take
necessary action under the Companies Act, 2013 against the companies which have not
availed this Scheme and are in default in filing of documents as required
under the provisions of Companies Act, 2013 in a timely manner.
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Ø
IMPORTANT TIMELINES:
Commencement of Scheme on
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1st April, 2020
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Scheme Shall remain in force upto
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30th September, 2020
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Source:
FAQs:
Below
FAQs seek to answer some common questions asked with reference to the following
Scheme:
Sr.
No.
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Questions
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Answer
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1.
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What is Companies Fresh Start
Scheme-2020?
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It is a One-time opportunity to make Fresh or clean start Scheme for filing
statutorily required documents/forms of Companies which were due for filling
by paying normal fees and no additional fees per form with the Registrar of
Companies.
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2.
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Tenure of Scheme?
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1st April, 2020 to 30th
September,2020
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3.
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Scheme Applicable to?
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Only to defaulting companies.
Defaulting companies/ Non-Compliant companies
means those companies who have failed to file any
documents, statement, returns etc. including annual statutory documents.
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4.
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Additional fees during
the Scheme?
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No additional fees payable on filing any forms under the
scheme.
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5.
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To whom the
immunity is granted?
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Immunity shall be granted to any defaulting
company who has filed belated documents under the scheme i.e. only for those
forms that will be filed in CFSS duration i.e. 01/04/2020 to 30/09/2020.
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6.
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When the
Immunity is granted?
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After filing application of immunity after
the closure of scheme but before six months from closure of the scheme.
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7.
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Application
of Immunity is made in which form?
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The application of obtaining immunity
regarding belated documents filed shall be made in e-Form CFSS-2020.
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8.
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Can immunity have
granted to all companies?
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Immunity shall not be granted if appeal
against order of court or any adjudicating authority is pending.
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9.
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Scheme Applicable for Which forms?
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All forms that are in the list of Eligible
hosted by Ministry of Corporate Affairs on MCA Portal.
Link for the same is:
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10.
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Scheme is Strictly not Applicable for
Which forms?
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Forms related to Increase in authorized
capital, Charge related forms and also to vanishing companies, dormant
companies, amalgamated companies, also Where Companies are
marked as “under CIRP or liquidation” and companies under
procedure of strike off.
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11.
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Can inactive companies file forms under
such scheme?
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Yes, Inactive companies can file forms under
the scheme.
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12.
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What are the Consequences if the
Defaulting company doesn’t take benefit of Companies Fresh Start Scheme-2020?
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If the Defaulting company doesn’t take
benefit of Companies Fresh Start Scheme – 2020, then the said companies have
to file forms with additional fees (THAT MAY BE HUGE AMOUNT) in addition to any
fee that is normally payable.
OR
Registrar may Initiate Prosecution against
Defaulting companies.
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13.
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What are the Advantages to the
Defaulting companies those took benefit of Companies Fresh Start Scheme-2020?
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i. Monetary
benefits as Huge amount of Additional fees is waived.
ii. The
defaulting companies, which have filed their pending Forms till 30th
September, 2020 and made good the default, shall not be subjected to
prosecution by Registrar for such defaults.
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14.
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Is there any fee payable on filing
application for immunity in Form CFSS-2020?
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No, there is no fee
payable on filing application for immunity in Form CFSS-2020.
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15.
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Documents,
statements or returns upto which date shall be filed under the scheme?
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Documents, statements or returns of a
company which are due for filing till 30th September, 2020
can be filed under the scheme.
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16.
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Which type of companies can be covered under
definition of defaulting company given under the scheme?
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All companies registered under Companies
Act, 2013 or Companies Act, 1956 or any previous Companies Act.
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17.
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Which
forms can be filed by an Inactive Company under the scheme?
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An Inactive Company can file Form MSC-1 for
obtaining dormant status and Form STK-2 for application of striking off name
from register of companies under this scheme.
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18.
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Is
it Compulsory to file FORM DIR-3 KYC/ WEB FORM DIR-3 KYC before availing the
benefits of the said Scheme?
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Yes, It is Compulsory to File Form DIR 3
KYC/ web form DIR 3 KYC of all the Existing directors of Defaulters Companies
before availing the benefit of the said Scheme.
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19.
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Is It compulsory to file
Active Form INC-22A?
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Yes,
It
is compulsory to file Active Form INC-22A. (Once the prerequisite
forms are filed for Form INC-22A).
Only the companies whose status is Active
will be able to seek the benefit of the scheme.
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The Said Write
up- Article is just an interpretation from the view of Author.
