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March 31, 2020

Process to apply Companies Fresh Start Scheme, 2020 with FAQ

by facelesscompliance in Corporate Law

Now covert your dormant, defaulting and inactive companies Active by applying in Companies Fresh Start Scheme, 2020

In furtherance of the Ministry of Corporate Affairs Circular No. 11/2020, dated 24th March. 2020 and in order to facilitate the companies registered in India to make a fresh start on a clean slate, this Ministry has decided to take certain alleviative measures for the benefit of all companies via General Circular No. 12/2020 dated 30/03/2020

Companies Act, 2013 requires all companies to make annual statutory compliance by filing the Annual Return and Financial Statements. Apart from this, various other statements, documents, returns, etc are required to be filed on the MCA21 electronic registry within prescribed time limits. Filing fees for filing such statements, documents, returns, etc is governed by section 403 of the Companies Act, 2013 read with Companies (Registration Offices and Fees) Rules 2014

The MCA has received representations from various stakeholders requesting for grant of one-time opportunity, so as to enable them to complete their pending compliance by filing necessary documents in the MCA-21 registry including annual filings without being subject to a higher additional fees on account of any delay

In order to give such an opportunity to the defaulting companies and to enable them to file the belated documents in the MCA-21 registry, the Central Government in 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 above mentioned documents with the Registrar, insofar as it relates to charging of additional fees, and granting of immunity from launching of prosecution or proceedings for imposing penalty on account of delay associated with certain filings. Only normal fees for filing of documents in the MCA-21 registry will be payable in such ease during the currency of CMS-2020 as per the provisions of section 403 read with Companies Registration Offices and Feel Rules, 2014 and section 460 of the Act.

The scheme gives an opportunity to inactive companies to get their companies declared as ‘dormant company’ under section 455 of the Act by filing a simple application at a normal fee. The said provision enables inactive companies to remain on the register of the companies with minimal compliance requirements

Frequently Asked Questions – FAQ on Companies Fresh Start Scheme, 2020

1) What is duration of Companies Fresh Start Scheme, 2020 ?

The Companies Fresh Start Scheme, 2020 Shall be start from 01st April, 2020 and end on 30th September, 2020.

2) Why the scheme and applicable to whome?

The Scheme condoning the delay in filing the form mentioned below with the Registrar, in so far it is relate to

a)   charging of Additional Fees and

b)   granting of immunity from launching of Prosecution or

c)   proceedings for imposing Penalty on account of delay associated with filings.

3) Do we have to pay additional fees?

Under the Scheme Companies have to pay only normal fees of the forms without additional fees. Fees would be considered as it was filed within due date. MCA shall not charge any additional fees in the given time period of 6 Months. Only Normal Fees of the forms shall be required to pay by the Companies.

4) Which all forms will be covered?

Scheme shall apply on Following forms:

Annual Return- MGT-7

Financial statement- AOC-4

Other forms required to be file with Roc Like

–      PAS-3

–      MGT-14

–      ADT-1

–      Any other form

5) Which all forms will not be covered?

The following two forms shall not be covered

–      SH-7- Increase in Authorized Capital

–      Charge related form (CHG-1, CHG-4, CHG-8 or CHG-9)

6) Which all Companies will not be covered in Scheme?

a)   To company 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.

b)   Where Company has already filed STK-2 for strike off of Company with ROC.

c)   Companies which have amalgamated.

d)   Whether application has already been filed for obtaining Dormant Status.

e)   To Vanishing Companies.

f)    Where companies marked for CIRP or Liquidation

7) Immunity in Companies Fresh Start Scheme, 2020 is granted for ?

Authority shall provide immunity certificate to Company. Company shall withdrawal of appeal against any prosecution launched. ROC Shall withdrawal all the prosecution pending regarding such forms/ returns.  ROC shall withdarawal the proceedings of adjudication of penalties u/s 454.

8) What is meaning of defaulting Company?

Defaulting Company means a Company defined under Companies Act, 2013 and Companies Which has made a default in filling of

–      Any of Document, Statement, Return etc

–      Including Annual Statutory Document

9) What if you have Query?

You can drop email at info@facelesscompliance.com or Chat with our team

10) What if any Director DIN is not active ?

DIN holders of DINs marked as ‘Deactivated’ due to non-filing of DIR-3KYC/DIR-3 KYC-Web and those Companies whose compliance status has been marked as “ACTIVE non-compliant” due to non-filing of Active Company Tagging Identities and Verification(ACTIVE) eform are encouraged to become compliant once again in pursuance of the General Circular No. 11 dated 24th March, 2020 & General Circular No.12 dated 30th March 2020 and file DIR-3KYC/DIR-3KYC-Web/ACTIVE as the case may be between 1st April, 2020 to 30th September, 2020 without any filing fee of INR 5000/INR 10000 respectively. This is clarified by MCA

The details of the Companies Fresh Start Scheme, 2020 Scheme are as under:-

(i) The scheme shall come into force on the 01.04.2020 and shall remain in force till 30.09.2020

(ii) Definitions – In this Scheme, unless the context otherwise requires,

(a) ‘Act” means the Companies Act, 2013 and Companies Act, 1956 (where ever applicable);

(b) “Company” means a company as defined in clause (20) of section 2 of the Companies Act, 2013;

(c) “defaulting company means a company defined under the Companies Act, 2013, and which has made a default in filing of any of the documents, statement, returns, etc. including annual statutory documents on the MCA-21 registry.

(d)Designated authority” means the Registrar of Companies having jurisdiction over the registered office of the company;

(e) “Immunity certificate’ means the certificate referred to in sub­paragraph of paragraph 6 of the Scheme;

(f) “inactive Company means a company as defined in Explanation (i) to sub-section (1) of section 455(1) of the Companies Act, 2013;

(iii) – Any ‘defaulting company” is permitted to file belated documents which were clue for filing on any given date in accordance with the provisions of this Scheme:

(iv) Manner of payment of normal fees for filing of belated documents and seeking immunity under the Scheme – Every defaulting company shall be required to pay normal fees as prescribed under the Companies (Registration Offices and Feel Rules, 2014 on the date of filing of each belated document and no additional fee shall be payable. Immunity from the launch of prosecution or proceedings for imposing penalty shall be provided only to the extent such prosecution or the proceedings for Imposing penalty under the Act pertain to any delay associated with the filings of belated documents. Any other consequential proceedings, including any proceedings involving interests of any shareholder or any other person qua the company fir its directors or key managerial personnel would not he covered by such Immunity  For Example, under section 420, every company is required to file a return of allotment within the period provided therein. However, the proviso to section 42(4) also requires that the utilisation of money raised through private placement shall not be made unless the return of allotment has been filed in the registry. Now, the immunity under the Scheme shall only be available in respect of the proceeding for imposing penalty On account of delay in filing the return of allotment, but not on account of utilization of the money raised through private placement prior to the filing of the return with the registry.

(v)Withdrawal of appeal against any prosecution launched or the proceedings for imposing penalties initiated: If the defaulting company with respect to any statutory filing under the Act, or its officer in default as the case may be has filed any appeal against any notice issued or compliant filed or an order passed by a court or by an adjudicating authority under the Act, before a competent court or authority for violation of the provisions under the companies Act, 1956 and /or Companies Act ,2013 in respect of which the application foe issued of immunity certificate ,withdraw the appeal and furnish proof of such withdrawal along with the application.

(vi)Special measures for cases where the order of the adjudicating authority was passed but the appeal could not be filed: In all cases where due to delay associated in filing of any document , statement or return ,etc.in the MCA-21 registry ,penalties were imposed by an adjudicating officer under the Act, and no appeal has been preferred by the concerned company or its officer before  the Regional Director under section 454(6) as on the date of commencement of the scheme, the following would apply :-

  • Where the last date filing the appeal against the order of the adjudicating authority under section 454(6) falls between the 1st March 2020 to 31st May 2020 (Both days included), a period of 120 additional days shall be allowed with effect from such last date to all companies and their officers for filing the appeal before the concerned Regional Directors;
  • During such additional period as stated in (A)above prosecution under section 454(8)for non-compliance of the order of the adjudicating authority insofar as it relates to delay associated in filing of any document statement or return etc. in the MCA -21 registry shall not be initiated against such companies or their officers.

(vii) Application for issued of immunity in respect of documents filed under the scheme-The application for seeking immunity in respect of       belated document filed under the scheme may be made electronically in the Form CFSS-2020 Annexed, after closure of the scheme and after the documents are taken on file, on record or approved by the Designated authority as the case may be but not after the expiry of six months from the date of closure of the scheme. There shall not be any fee payable on this Form.

Provided that this immunity shall not be applicable in the matter of any appeal pending before the court law and in case of management disputes of the company pending before any court of law or tribunal.

Provided also that no immunity shall be provided in case any court has ordered conviction in any matter,or an order imposing penalty has been passed by an adjudicating authority under the Act, and no appeal has been preferred against such order of the court or of the adjudicating authority , as the case may be before this scheme has come in to force.

(viii) Order by designated authority granting immunity from penalty and prosecution – 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.

(ix) Scheme not to apply in certain cases – This scheme shall not apply :-

  1. To companies against which action or final notice for striking off the name u /s 248 of the Act (Previously section 560 of companies Act 1956 has already been initiated by the Desinated authority.
  2. Where any application has already been filed by the companies for action of striking off the name of the company from the register of companies.
  3. To companies which have amalgamated under a scheme of arrangement or compromise under the Act.
  4. Where application have already been filed for obtaining dormant status under section 455 of the Act before this scheme.
  5. To vanishing companies
  6. Where any increase in authority capital is involved (Form SH-7)and also charge related documents (CHG-1,CHG4,CHG8 AND CHG-9)

(x)Effect of immunity: After granting the immunity the designated authority concerned shall withdraw the prosecutions pending of any before the concerned courts and the proceedings of adjudication of penalties under section 454 of the Act other than those referred in the second proviso to sub – paragraph (vii) of paragraph 6 of this scheme, 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.

(xi)Scheme for inactive companies: The defaulting inactive companies while filing due documents under CFSS-2020 can simultaneously either.

  1. 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 on said form or
  2. Apply for striking off the name of the company by filing e- Form STK-2 by paying the fee payable on form STK-2

7. At the conclusion of the 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 in a timely manner.

List of Documents and information Required to apply Companies Fresh Start Scheme, 2020

Name and CIN of Company

  1. Name and CIN of Company
  2. Email Address
  3. Digital Signature of Director or authorised representative
  4. Proof of withdrawal of any appeals against any notice issued or complaint filed or an order passed by a court or by an adjudicating authority under the Act.
  5. Details in respect of prosecutions pending against the company and its officers in respect of belated documents filed under the scheme which require withdrawal by the registrar.
  6. No of SRN forms Filed

Format of Immunity Certificate under CFSS, 2020

Government of India

Ministry of corporate Affairs

<Name of ROC office>

<Address of the ROC office>

<Corporate Identify Number or Foreign Company Registration Number >, <CIN/FCRN>

Certificate for grant of Immunity form precaution or imposition of penalty under Companies Fresh Start Scheme (CFSS, 2020)

Where <Company Name> (herein referred to as the company) has filed the documents mentioned below and has filed an application under the CFSS, 2020 for grant of immunity from prosecution under the companies Act, 2013

SRN FORM Numbers Date of filing Date of Event Normal fees charged under CFSS, 2020 (In Rs.) Total Fees (in Rs.)
           
           
Total    

And where the company has also declared that no petition or appeal was filed against any noticed issued or complaint filed before any court or NCLT or NCLAT or Regional Director or any other adjudicating authority for violation of the provision under the Act in respect of the above mentioned documents or where filed has withdrawn such appeal.

Now therefore in exercise of the powers conferred under CFSS, 2020 the undersigned here by issues this certificate to the said company granting immunity from prosecution or imposition of penalty under the Act subject to the provision contained in the scheme in respect of a foresaid documents covered In the application .

<Full name of the authorizing approving the work item>

<AROC/DRoC>

<Registrar of Companies >

<Name of the RoC Office>

Mailing address as per record available in Registrar of Companies Office:

<Name of the Company>

<Address of the registered office or of the principal place of business in India of the Company>

Note: Immunity Certificate has been generated on the basis of the declaration made in the form which may be subject to verification at an appropriate stage. Immunity under the Companies Act,2013 shall be available strictly in accordance with the terms and conditions mentioned in the Companies Fresh Start Scheme (CFSS) and will be Limited to any default associated with the delay in filing of documents in the registry.