Company Fresh Start Scheme 2020(CFSS- 2020) By CS Shubham Phule



Brief about the Scheme:

MCA vide its circular dated 30/03/2020 came out with Company Fresh Start Scheme 2020 (CFSS-2020) So as to enable Companies to file pending Annual filing documents, financial statements, belated returns etc. in the MCA registry without being subject to higher fees on account of any delay and granting of immunity from launching of prosecution of proceedings for imposing penalty on account of delay associated with certain filings.

Conditions for Granting Immunity:

Immunity will only be granted pertaining to delay associated with filings of belated documents. Any other consequential proceedings, including any proceedings involving interests of any stakeholder or other person qua the company or its directors or KMP would not be covered under the scheme.

Immunity will not be granted if any appeal is pending before the court of law and in case of management disputes pending before any court of law or tribunal or court has ordered any conviction in any matter or an order imposing penalty has been passed and no appeal has been preferred against such orders.

Total 76 forms of Company and LLP can be filed with Normal Fees. (64 forms of Company and 12 forms of LLP)

Scheme in Detail:

  • The Scheme is applicable to any defaulting company” to file belated documents which were due for filing on any given date in accordance with the scheme
  • Defaulting Company means a company which has made a default in filing of any documents, returns, statement etc. including annual filing statutory documents with MCA-21 registry
  • The Scheme gives an opportunity to inactive companies to declare as dormant companies under section 455 of the act by filing a simple application at a normal fee.
  • The Scheme shall be applicable from 01.04.2020 and shall remain in force till 30.09.2020.
  • If the defaulting Company has filed any appeal with respect to statutory filings under the act or officers in default as the case may be, the applicant shall before filing an application for issue of immunity certificate withdraw the appeal and furnish proof of withdrawal along with the application.
  • In all the cases where penalties were imposed by the adjudicating officers under the act and no appeal has been preferred by the concerned company or its officer before the Regional Director as on date
  • Where the last date for appeal falls between 1st March, 2020 to 31st May 2020 (both days inclusive) a period of 120 additional days shall be allowed with effect from such last date to file the appeal before the concerned Regional Directors.
  • During such additional period stated above in so far it relates to delay associated in filing of any document, statement of return etc. in the MCA-21 registry prosecution for non-compliance shall not be initiated against the companies or its officers.
  • The Application for seeking immunity in respect of the belated documents shall be filed in the Form CFSS 2020 annexed after the closure of the scheme and after the documents are taken on file, on record and approved by designated authority but not after the expiry of six months from the date of closure of scheme. There shall not be any fee on Form CFSS 2020.
  • Based on the declaration made in the Form CFSS 2020 an immunity certificate shall be issued by the designated authority in respect of documents filed under this scheme.

CFSS 2020 Scheme not applicable to:

  1. Companies against action for final notice of striking off the name has already been initiated by the designated authority;
  2. Where an application has been filed for striking off the Company from the register of companies;
  3. The Companies which have amalgamated under the scheme or arrangement or compromise;
  4. Where application for dormant status has already been filed under section 455 of the Companies Act, 2013 before this scheme.
  5. Vanishing Companies;
  6. Any increase in authorized capital is involved ( Form SH-7) and also charge related forms( Form CHG-1,Form CHG-4, CHG-8 and CHG-9)

Effect of Immunity:

The Designated authority concerned shall withdraw the prosecutions pending, if any, before the concerned Courts and the proceedings of adjudication of penalties under section 454 (Adjudication of Penalties) of the Companies Act, 2013.

The defaults against immunity has been granted shall be deem to be completed without any further action.

Scheme for Inactive Companies:

The defaulting Companies while filing due documents documents under the scheme can get themselves declared as Dormant Company under section 455 of the Companies Act, 2013.

Apply for striking off of the name of the Company by filing e-Form STK-2 by paying fee applicable for Form STK-2.                                                           

Lex comply

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