COMPANIES FRESH START SCHEME, 2020

The Ministry of corporate affairs via its general circular no 12/2020 dated 30/03/2020 has furnished a Companies Fresh Start Scheme, 2020 in order to provide the opportunity for the companies registered in India to make a fresh start on a clean slate.

There are various compliances which the companies have to comply under Companies Act, 2013 within the specified period and if fails todo the same then they will be called as defaulting companies, so in order to provide them facilitythe MCA has implement this scheme. In this scheme companies can file their pending documents such as Annual Return and Financial Statements without paying higher additional late fees.

SCHEME:

The scheme shall come into force on the 01.04.2020 and shall remain in force till 30.09.2020.

The scheme is applicable on the following mentioned forms:

1. MGT-7 Annual Return
2. AOC-4 Financial Statements
3. PAS-3
4. MGT-14
5. ADT-1
6. Or any other Form

EXECPT:

1. SH-7 (Increase in Authorized Capital )
2. Charge Related Documents ( CHG-1, CHG-4, CHG-8 and CHG-9)

SCHEME NOT TO APPLY IN CERTAIN CASES:

The scheme shall not apply to:

1. Companies against whom the designated authority has already initiated the action of final notice for the striking off the name.
2. Where the companies has already filed the application (STK-2) for striking off the name to the ROC.
3. Companies which have amalgamated.
4. Application for obtaining the statusdormant company has already been filled.
5. Vanishing Companies.

BENEFIT OF THE SCHEME:

• Additional fee will not be charged during the scheme.
• Grating immunity* from prosecution or proceeding and obtain immunity certificate.
• Withdrawal of appeal against any prosecution launched by the companies
• ROC shall withdraw all the prosecution pending regarding such forms/return.

*For example, Section 42(4) provides for return of allotment be filed before utilization of funds raised through private placement. The scheme provides immunity towards belated filing of return but not the contravention of section of utilization of funds before filing return of allotment.

NOTE: If the last date for filing the appeal against the order of the authority under the section 454(6) falls between 01.03.2020 to 31.05.2020 then extension of 120 days will be given with the effect from such last date for the appeal.

APPLICATION FOR ISSUE OF IMMUNITY:

On completion of the scheme on 30th September 2020, CFSS-2020 E-Form shall be available for filing for the companies availing benefit under the scheme but not after the expiry of six months from the date of the closure of the Scheme and immunity certificate will be issued by MCA. There shall not be any fee payable on this form.

SCHEME FOR INACTIVE COMPANIES:

The defaulting inactive companies along with filing of due documents under CFSS-2020 can also either:

1. Apply to be declared as dormant company under section 455 by filing MSC-1 at normal fee.
2. Apply for striking of the name by filing STK-2.