All about the Ministry of Corporate Affairs Company fresh start scheme 2020

MCA introduces and has issued the Companies fresh start scheme, 2020 and revised the LLP settlement scheme, 2020 as a golden opportunity for each company and LLP’s providing relief or opportunity to defaulting companies or LLPs to make a fresh start as the fully compliant entity in the wake of COVID-19. Under this Scheme, a one-time waiver of additional fees for delayed filings is allowed by the Ministry of Corporate Affairs i.e., the company can file all pending forms without additional fees during Scheme period (1^st April to September 30^th, 2020) to the Registrar of companies.

What is CFSS, 2020?

Any defaulting company can file the deferred obligatory compliances which were outstanding previously without any additional charges. Ministry has waived off the additional fees and will grant immunity from prosecution or proceedings for imposing a penalty on account of delayed filings. Only normal fees will be charged for completing the pendency of compliances to the Ministry without any additional fees.

Special Cases for Appeal to defaulting companies

Case A

If any defaulting company has filed an appeal with respect to statutory filings against any order issued or grievance filed or order of the court or Adjudicating Authority for contravention of provisions of law, the applicant shall first withdraw the appeal and then file the CFSS, 2020 form along with the evidence of such extraction with the application. 

Case B

Order of adjudicating authority was passed, penalties were imposed but an appeal could not be filed in this case where:

1. Last Date of filing of the appeal falls between 1st March 2020 to 31st May 2020 (both inclusive), a period of supplementary 120 days shall be sanctioned for filing the appeal before the concerned Regional Director (RD).

2. Throughout such a supplementary period action shall not be taken against any entity and its officers.

Immunity from Prosecution

The protection or immunity from any actions or proceedings for commanding penalties shall be provided only to the coverage of any delay linked with filings. While any other consequential proceedings shall not be covered under this scheme. Resistance shall not be appropriate for those companies whose matter of appeal awaiting the decision of the court of law and in case of administration disputes of the company pending before any courtyard or Tribunal. Subsequent to the declaration filed in E-form CFSS, 2020 immunity certificate as an official document will be issued under this scheme to the companies and LLP who has complied with the provision of the scheme.

Applicability of Scheme

It is applicable on the following mentioned E-forms:

1. Annual return MGT-7
2. Financial Statement AOC-4
3. PAS-3, MGT-14, ADT-1, or any other forms required to be filed with ROC
4. DIR-3 KYC, INC-20A, INC-22A
5. Any other incident-based form.

Non- Applicability of Scheme

1. On those companies for which registrar has issued a public notice in the form STK-5 for removal of name from the register of the companies.

2. Where the application has been filed for striking off the name in STK-2 of the company.

3. Those companies which have filed with the department to acknowledge themselves as a dormant company. Or those companies which are vanishing companies

4. Those companies which have been combined under a scheme of compromise or arrangement as per the law.

5. Where an increase in authorized share capital in SH-7 and charge related documents in CHG-1, CHG-4, CHG-8, CHG-9 are involved

Scheme for Inactive Companies

In addition to this the scheme gives an opportunity to those companies who are not in working right now to get their companies acknowledged as “Dormant Companies” and remain active on the Register of the Companies with bare minimum compliances. The defaulting inactive companies apply to get them declared as Dormant Companies by filing e-form MSC-1 or apply for striking off the name of the company by filing e-form STK-1.

Conclusion:

Consequently to bring to a close on the above matter the ministry has release the notification stating that the resistance is provided only against the deferred filings and not against any infringement of law. NeuSource Startup Minds India Limited hereby helps you in getting immune from the penal provisions applicable on the companies through making you an active compliant once again with a fresh start.

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The NeuSource Startup Mind is the finest business startup consultant that offers various services of compliances along with the registration like Proprietorship Firm compliances, Partnership Firm compliances, LLP compliances, Company compliances, GST compliances, etc. 

Akash Rai

"Any time is a good time to start a company.” Neusource indulge in providing business consultancy services which help startups to accomplish their desired results as a TAJ EXPRESS. If you’re passionate about something and you work hard, then neusource is the right choice for you.