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Companies Fresh Start Scheme 2020 (CFSS-2020)

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CFSS Scheme availed by 4.7 Lakh Companies & 21% more Companies formed in Year 2020

CFSS Scheme availed by 4.7 Lakh Companies & 21% more Companies formed in Year 2020

4,73,131 number of Indian Companies and 1,065 number of Foreign Companies have been benefited by availing the Companies Fresh Start Scheme (CFSS), 2020

As per records available with the Ministry of Corporate Affairs (MCA), 4,73,131 number of Indian Companies and 1,065 number of Foreign Companies have been benefited by availing the Companies Fresh Start Scheme (CFSS), 2020 for filing their pending documents.

This was stated by Shri Anurag Singh Thakur, Union Minister of State for Finance & Corporate Affairs in a written reply to a question in Rajya Sabha today.

The Ministry of Corporate Affairs (MCA)through the General Circular No. 12/2020 dated 30.03.2020 launched the Companies Fresh Start Scheme, (CFSS) 2020 which inter- alia provides opportunities to Companies to make good any filing related defaults, regardless of duration of defaults, and make a fresh start as a fully compliant entity.

Giving more details, the Minister said the Scheme condoned the delay in filing the belated documents and gives immunity from prosecutions and proceedings for imposition of penalty which might arise on account of such delayed filing of documents. No additional fees was charged for late filing during a moratorium period from 1st April to 31st December, 2020 in respect of documents, returns etc. required to be filed in MCA-21 Registry.

Break up of Number of Companies that availed the scheme State/UT-wise which is as per below table

COMPANY-LIST

Incorporation of Companies in current fiscal increased 21% as compared to corresponding period in previous fiscal

The number of companies incorporated from April, 2020 till December, 2020 (COVID 19 period) in the Financial Year 2020-21 (till 31-12-2020) compared to corresponding period from April, 2019 to December, 2019 in the Financial Year 2019-20 (till 31-12-2019) has actually increased by about 21% as is evident from the following details:

Number of New Companies IncorporatedApril 2019 to December 2019April 2020 to December 2020Increase in percentage (%)
Total9375411303320.56%

This was stated by Shri Anurag Singh Thakur, Union Minister of State for Finance & Corporate Affairs in a written reply to a question in Rajya Sabha today.

Giving more details, the Minister said, the Ministry of Corporate Affair (MCA) has taken steps to extend help and support to the companies incorporated and its details are as under:

  1. The “Companies Fresh Start Scheme, 2020” was launched to make a fresh start for companies to be a fully compliant company by allowing them to file belated documents in MCA-21 Registry without any additional fees from 1st April to 31st December, 2020. The said scheme has also given immunity from prosecutions and proceedings for imposition of penalty which might arise on account of such delayed filing of documents.
  2. In the wake of COVID 19 and to provide relief to law abiding companies a scheme was launched for relaxation of time for filing forms related to creation or modification of charges under the Companies Act, 2013 during the period from 1st March to 31st December, 2020.
  3. MCA has announced a Condonation of Delay Scheme for Companies restored by NCLT between 1st December, 2020 to 31st December, 2020 under section 252 of the Companies Act, 2013. The Scheme provides to condone delay in filing forms with the Registrar, and spares payment of additional fees. This Scheme will be in operation from 01st February 2021 and will be available for filing of any overdue e-forms by such companies till 31st March 2021.
  4. In order to provide relief to the companies in view of COVID-19 pandemic, the companies have been allowed to conduct Board Meetings through Video Conference (VC) or other audio-visual means for passing resolutions in respect of matters which were earlier required to be passed in meetings which required physical presence of directors by amending the Companies (Meetings of Board and its Powers) Rules 2014 from time to time during COVID-19 pandemic. Such facility to the companies has been allowed till 30th June, 2021. (initially it was till 30.06.2020, then extended to 30.09.2020 and 31.12.2020).
  5. The companies have been allowed to hold Extraordinary General Meetings (EGMs) through Video Conferencing (VC) or other audio-visual means (OAVM) complemented with e-Voting facility/simplified voting through registered emails till 30th June, 2021.
  6. The companies have been allowed to conduct their Annual General Meetings (AGMs) by Video Conferencing (VC) or other audio-visual means (OAVM) whose AGMs were due to be held in the year 2020 or become due in the year 2021 to conduct their AGMs on or before 31.12.2021. Owing to the difficulties in sending physical copies of the financial statements, the companies are also allowed to send the financial statements, along with Board’s reports, Auditor’s reports and other documents required to be attached therewith, only through email.
  7. The Registrar of Companies on the advice of Ministry had given extension of time in holding of Annual General Meeting for the financial year ended on 31st March, 2020 till 31st December, 2020 (The maximum period which can be extended by the Registrar of Companies under section 96 of the Act).
  8. The Companies (Auditor’s Report) Order, 2020 has now been made applicable from the audit of financial statements for the financial year 2021-22 to ease the auditors and the companies.
  9. The mandatory requirement of holding meetings of the Board of the companies within the intervals provided in section 173 of the Companies Act, 2013 (CA-13) (120 days) were extended by a period of 60 days till next two quarters i.e., till 30th September, 2020. Accordingly, as a one-time relaxation, the gap between two consecutive meetings of the Board were extended to 180 days till the next two quarters, instead of 120 days as required in the CA-13.
  10. Independent Directors (IDs) of a company have been given relaxation from holding atleast one mandatory meeting and accordingly for the financial year 2019-20, if the IDs of a company have not been able to hold such a meeting, the same has not been viewed as a violation.
  11. Timeline for creation of deposit repayment reserve of 20% under section 73(2)(c) of CA-13 and to invest or deposit 15% of amount of debentures under rule 18 of Companies (Share Capital and Debentures) Rules, 2014 was extended till 31st December, 2020.
  12. An additional period of 180 more days has been allowed to comply with the requirement of filing a declaration for Commencement of Business by newly incorporated companies.
  13. Non-compliance of minimum residency in India for a period of at least 182 days by at least one director of every company, under Section 149 of the CA-13 shall not be treated as a non-compliance for the financial year 2019-20 and 2020-21.
  14. Till 31st December, 2020, the inability to dispatch the notice for Rights Issues by listed companies to their shareholders through registered post or speed post or courier would not be viewed as violation of section 62(2) of the Act provided these companies comply with the SEBI Circulars dated 6th May, 2020 and 24th July, 2020 which inter-alia provide the mode/manner of issuance of notice by electronic transmission by listed companies.
  15. Requirement for investing 15% of amount of debentures maturing in a particular year in specified instruments has been done away with for listed companies & Non-Banking Financial Companies (NBFCs) when such debentures are issued on a private placement basis.
  16. Time allowed to Auditors and Audit Firms with the National Financial Reporting Authority (NFRA) for filing NFRA-2 form has been extended till a total period of 270 days in view of the difficulties faced during COVID-19 related disruption.
  17. The expenditure incurred by companies on activities relating to Central Armed Police Forces (CAPF) and Central Para Military Forces (CPMF) Veterans, and their dependents including widows has been considered as CSR expenditure.
  18. Last date of submission of Cost Audit Report by the Cost Auditor to the management of the company has been extended till 31st December 2020 and additional fee has been relaxed for filing of CRA-4 (form for filing of cost audit report) for financial year 2019-2020.
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Rajya Sabha Member Digvijaya Singh Requested FM to extend CFFS & LLP Settlement Scheme

Rajya Sabha Member Digvijaya Singh Requested FM to extend CFFS & LLP Settlement Scheme

Rajya Sabha Member Digvijaya Singh says “Hon Finance Minister must take cognisance of the reasonable demand of Tax Consultants and Tax Payers of extension of CFFS & LL P Settlement Scheme. Because of the Poor Connectivity in Semi Urban and Rural Areas the Portal remained close for a long time”

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ICSI Represented to MCA for Extension of CFSS and LLP Scheme

ICSI Represented to MCA for Extension of CFSS and LLP Scheme

The Institute of Company Secretaries of India has written a representation letter to the Union and Finance Minister requesting for the Ministry of Finance to extend the Companies Fresh Start Scheme to 31st March 2021.

CA and CS has also taken it to Twitter to express their demands, as due date ends at 31 December 2020 and to extend the same till 31 March 2021

MCA: December: 2020
 
Shri Rajesh Verma, IAS Secretary
Ministry of Corporate Affairs Government of India
Shastri Bhawan Dr.Rajendra Prasad Road New Delhi -110001 

Subject: Request for extension of timelines due to COVID-19-reg.

Respected Sir, 

We extend our heartfelt gratitude towards the Ministry of Corporate Affairs (MCA) for having extended various relaxations to the corporate and other stakeholders in the times of Covid 19. As you are kindly aware that impact of Covid 19 pandemic is not yet over and the stakeholders are still facing significant challenges in undertaking the functions smoothly.

CS fraternity protesting at ROC Mumbai over non functioning of MCA Website and draconian late fees (Reference Twitter)

Considering the ongoing situation, we request you to consider further relaxation in due dates of the following compliances:
 

SRMCA Notification DateCircular NoDetailSuggestion
1.General Circular 12/2020 dated March, 2020No. 30thCompanies Fresh Start Scheme, 2020 (CFSS- 2020)The scheme may extended upto 31st March, 2021.
 General Circular 30/2020 dated September, 20 0No. 28thThe Companies Fresh tart Scheme was introduced on the 1st April, 2020. The scheme offered one-time opportunity to the defaulting companies to file the pendin documents without charging higher additional fees on any delay with the MCA. The said scheme as extended till 31st December, 2020. 
2.General Circular 13/2020 dated March, 2020 General Circular 31/2020 dated September, 20 0No. 30th No. 28thLLP Settlement Scheme, 2020 The LLP Settlement Schem was introduced on the 1st April, 2020. The scheme offered one-time opportunity to the defaulting LLPs to file the pending documents witho t charging higher additional fees on any delay with the MCA. The said scheme was extended till 31st December, 2020.The scheme may extended upto 31st March, 2021 and accordingly the due date for filing belated docume ts may be extended
 General Circular 37/2020 dated November, 20 0No. 9th 
3.General Circular 23/2020 dated June, 2020No. 17thScheme for relaxation of time for filing forms related to creation or mod fication of charges under the ActThe period may be extended u to 31stMarch, 2021.
 General Circular 32/2020 dated September, 20 0No. 28thThe scheme is available whi h granted relaxation in filing of Form No. C G-l and Form No. CHG-9 by a company or a charge holder which has been extended till 31st December, 2020. 
4.MCA Notification no. GSR 186 (E) dated 19th March, 2020 MCA Notification no. 395(E) dated 23rd June, 2020 MCA Notification no. G.S.R. 590(E) dated September 28, 2020Holding Board Meeting through Video Conferencing In terms of the provisions of Rule 4 of the Companies (Meetings of Board and its Powers) Rules, 2014, certain matters at the Board Meeting shall not be dealt with in any meeting through video conferencing or other audio-visual means. The said provisions were relaxed and such matters were allowed to be conducted through Video Conferencing till 31st December, 2020.This relaxation may be extended up to 31st March, 2021.This relaxation may be extended up to 31st March, 2021.
5.General Circular No. 14/2020 dated 8th April, 2020Companies to hold EGMs or transact business through postal ballots through VC or OAVMThis relaxation may be extended up to 31st March, 2021.
 General Circular No. 17/2020 dated 13th April, 2020The MCA has allowed companies to conduct their EGMs through VC or OAVM or transact items through postal ballot in accordance with the framework provided in the Circulars upto 31st December, 2020. 
 General Circular No. 22/2020 dated 15th June, 2020  
 General Circular No. 33/2020 dated 28th September, 2020  

We hope that the above submissions which are on account of the difficulties and hardship faced by the stakeholders would be considered favorably. We shall be pleased to provide any further information in this regard on hearing from your goodself.

Thanking You, Yours faithfully,

ICSI Secretary

Few Tweets for Request

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Know 7 Due dates extended by MCA to 31st December 2020

Know 7 Due dates extended by MCA to 31st December 2020

Considering the difficulties faced by the corporates and professionals due to the continued disruption in certain parts of the country and to provide greater Ease of doing business, various representation has been made by industry and professional bodies to enhance the timelines as the corporates are not able to take the desired benefit of the relaxations.

The Government has considered the request and has extended the following timelines:

1. The Companies Fresh Start Scheme (CFSS) which was introduced on 1st April, 2020 and was open till the 30th September, 2020. The scheme offered one-time opportunity to the defaulting companies’ to file all the pending documents including the annual tiling of the company without charging higher additional fees on any delay with the Ministry. The same has now been extended to 31st December, 2020.

2. The LLP Settlement Scheme, 2020 which incentivise compliance and reduce compliance burden during the unprecedented public health situation caused by Covid-19. The scheme was a one-time waiver of additional filing fees for delayed filings by the LLPs with the Registrar of Companies during the period starting from 1st April, 2020 and ending on 30th September, 2020. The same has now been extended to 31st December, 2020

3. Special measures adopted to enable and support Limited Liability Partnerships constituted under Limited Liability Partnership Act, 2008 in view of COVID19 outbreak to reduce their compliance burden and other risks. The same has now been extended to 31st December, 2020.

4. Filing of DIR 3 KYC is also a part of the CFSS- 2020 and LSS-2020 schemes. The same has also been extended to 31st December, 2020.

5. Companies to hold EGMs or transact business through postal ballots through Video Conferencing or Other Audio Visual Means by 30th September, 2020. The same has now been extended to 31st December, 2020.

6. Filing of forms related to creation or modification of charges under the Companies Act 2013 was earlier provided till 30th September, 2020. The same has now been extended to 31st December, 2020.

7. The last date for registration of details of Independent Directors in the ID Data Bank was extended upto 30th September, 2020. The same has now been extended to 31st December, 2020.

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List of Forms eligible for CFSS & LLP Scheme 2020 Extended till 31 December 2020

List of Forms eligible for CFSS & LLP Scheme 2020 Extended till 31 December 2020

The Ministry of Corporate Affairs has extended the duration of CFSS-2020 & LLP Scheme till 31 December 2020 in view of the continued disruption caused due to the COVID-19 pandemic in certain parts of the country and to provide greater Ease of Doing Business.

The various forms for which filings are extended are

S No.Form No.Description
123CAppointment of Cost Auditors
      2      MR-2Form of Application to the Central Government for approval of appointment or reappointment and remuneration or increase in remuneration or waiver for excess or over payment to managing director or whole time director or manager and commission or remuneration to directors
3ADT-2Application for removal of auditor(s) from his/their office before expiry of term
4NDH-2Application for extension of time
5DIR-3CIntimation of Director Identification Number by the company to the registrar
6INC-12Application for grant of License under section 8
7MSC-1Application to ROC for obtaining the status of dormant company
  8  DIR-12Particulars of appointment of directors and the key managerial personnel and the changes among them
9INC-4Intimation for Change in Member/Nominee
S No.Form No.Description
10INC-6One Person Company – Application for Conversion
11INC-22Notice of Situation or Change of situation of Registered Office of the Company
  12  INC-27Conversion of public company into private company or private company into public company
1320BAnnual Return
1421AAnnual Return for company having no share capital
1523BNotice by Auditor
1623DInformation by cost auditor to Central Government
1723ACFiling balance sheet and other documents with the Registrar
1823AC- XBRLForm for filing XBRL document in respect of balance sheet and other documents with the Registrar.
19Form 66Form for submission of Compliance Certificate
S No.Form No.Description
20AOC-4Form for filing financial statement and other documents with the Registrar
21AOC-4 CFS  Form for filing consolidated financial statements and other documents with the Registrar
22AOC- 4(XBRL)Form for filing XBRL document in respect of financial statement and other documents with the Registrar
23ADT-1Information to the Registrar by company for appointment of auditor
24ADT-3Notice of Resignation by the Auditor
25BEN-2Return to the Registrar in respect of declaration under section 90
26CRA-2Form of Intimation of appointment of cost auditor by the company to Central Government
27CRA-4Form for filing Cost Audit Report with the Central Government
28DPT-3Return of deposits
S No.Form No.Description
29DPT-4Statement regarding deposits existing on the commencement of the Act
30GNL-2Form for submission of documents with the Registrar
31INC-5One Person Company- Intimation of exceeding threshold
32IEPF-1Statement of amounts credited to the Investor Education and Protection Fund
33IEPF-2Statement of unclaimed or unpaid amounts
  34  IEPF-3Statement of shares and unclaimed or unpaid dividend not transferred to the Investor Education and Protection Fund
35IEPF-4Statement of shares transferred to the Investor Education and Protection Fund
S No.Form No.Description
  36  IEPF-6Statement of unclaimed or unpaid amounts to be transferred to the Investor Education and Protection Fund
37IEPF-7Statement of amounts credited to IEPF on account of shares transferred to the fund
38IEPF-5 e- verificati on report  Application to the authority for claiming unpaid amounts and shares out of Investor Education and Protection Fund (IEPF) – E-verification report
  39  I-XBRLForm for filing XBRL document in respect of cost audit report and other documents with the Central Government
40MGT-7Annual Return
41MR-1Return of appointment of key managerial personnel
42MSC-3Return of dormant companies
43NDH-1Return of Statutory Compliances
44NDH-3Return of Nidhi Company for the half year ended
S No.Form No.Description
45  NDH-4  Application for declaration as Nidhi Company and for updation of status by Nidhis
46PAS-3Return of allotment
47SH-11Return in respect of buy-back of securities
  48  A-XBRLForm for filing XBRL document in respect of compliance report and other documents with the Central Government
49DIR-3 KYC/Web form    Application for KYC of Directors
50FC-1Information to be filled by Foreign company
51FC-2Return of alteration in the documents filed for registration by foreign company
52  FC-3Annual accounts along with the list of all principal places of business in India established by foreign company
53FC-4Annual Return of a Foreign Company
54INC-22AActive Company Tagging Identities and Verification (ACTIVE)
55INC-20ADeclaration for commencement of business
S No.Form No.Description
56AOC-5Notice of address at which books of account are maintained
57DIR-11Notice of resignation of a director to the Registrar
  58  GNL-3Particulars of person(s) or key managerial personnel charged or specified for the purpose of sub-clause (iii) or (iv) of clause 60 of section 2
59INC-20Intimation to Registrar of revocation/surrender of license issued under section 8
60INC-28Notice of order of the Court or Tribunal or any other competent authority
61MGT-6Return to the Registrar in respect of declaration under section 89 received by the company
62MGT-10Changes in shareholding position of promoters and top ten shareholders
63MGT-14Filing of Resolutions and agreements to the Registrar under section 117
64MGT-15Form for filing Report on Annual General Meeting
65Form 27 LLPForm for registration of particulars by Foreign Limited Liability Partnership (FLLP
S No.Form No.Description
  66  FORM 3Information with regard to limited liability partnership agreement and changes, if any, made therein
67FORM 8Statement of Account & Solvency
68FORM 15Notice for change of place of registered office
69FORM 11Annual Return of Limited Liability Partnership (LLP)
  70  FORM 4Notice of appointment, cessation, change in name/ address/designation of a designated partner or partner and consent to become a partner/designated partner
71FORM 5Notice for change of name
72FORM 12Form for intimating other address for service of documents
73FORM 22Notice of intimation of Order of Court/ Tribunal/CLB/ Central Government to the Registrar
74FORM 31Application for compounding of an offence under the Act
  75  FORM 23Application for direction to Limited Liability Partnership (LLP) to change its name to the Registrar
76Form 29 LLPNotice of (A) alteration in the certificate of incorporation or registration; (B) alteration in names and addresses of any of the persons authorised to accept service on behalf of a foreign limited liability partnership (FLLP) (C) alteration in the principal place of business in India of FLLP (D) cessation to have a place of business in India
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Ministry of Corporate Affairs has extended the duration of several schemes till 31 December 2020

Ministry of Corporate Affairs has extended the duration of several schemes till 31 December 2020

The Ministry of Corporate Affairs has extended the duration of several schemes till 31.12.2020 in view of the continued disruption caused due to the COVID-19 pandemic in certain parts of the country and to provide greater Ease of Doing Business.

The Ministry of Corporate Affairs had introduced a new scheme known as the Companies Fresh Start Scheme, 2020, valid from 01.04.2020 to 30.09.2020 to enable companies to make good their previous defaults. This Scheme has now been extended till 31.12.2020.

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The MCA had also introduced a new scheme known as the LLP Settlement Scheme, 2020 which was valid from 01.04.2020 to 13.06.2020 and was later extended till 30.09.2020. The Scheme has been further extended to 31.12.2020 to enable LLPs to make good their previous defaults.

The Scheme for relaxation of time for filing forms related to creation or modification of charges under the Companies Act, 2013 and the time for conducting EGMs through Video Conference or Other Audio Visual Means also stand extended till 31.12.2020.

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Companies Fresh Start Scheme, 2020 Fresh start for defaulting companies

Companies Fresh Start Scheme, 2020 Fresh start for defaulting companies

The economic impact of the 2020 coronavirus pandemic in India has been largely disruptive. The lockdown though necessary has led to a disastrous impact on the economy. The Government of India announced a variety of measures to tackle the situation, from food security and extra funds for healthcare and for the states, to sector related incentives and tax deadline extensions. The RBI too had announced various measures to the curb the economic impact of the pandemic.

The Ministry of Corporate Affairs (MCA) too, in an attempt to ease matters for the companies, introduced a new scheme known as the Companies Fresh Start Scheme, 2020 (CFSS). According to the provisions of the Companies Act, 2013, all companies are required to follow statutory compliances annually.

These include the Annual Returns, Financial Statements and all the other necessary forms, documents and statements that are specified, within that particular time frame. Non – compliance of the same results in the imposition of penalties and fines.

A company that fails to adhere to the compliances is called a defaulting company. The Companies Fresh Start Scheme, 2020 shall be applicable to such defaulting companies from 1st April, 2020 to 30th September, 2020.

What is the manner of payment under this Scheme?

Defaulting companies shall pay only the normal fees as prescribed by the Companies Rules, 2014 for all filings with the MCA 21 registry. There will be no additional fees payable on the date of filing of belated documents.

What immunity is available under this Scheme?

Immunity will be available against prosecution and proceedings for imposing penalty only where:-

  • The prosecution and proceedings arose due to the delay in filing of belated documents.
  • any consequential proceeding including proceedings related to the interest of any person/director/KMP/shareholder are not covered under the Immunity under this Scheme
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After Granting the Immunity, the designated authority shall withdraw the prosecutions pending, if any, pending before the Concerned Court and Proceedings of adjudication of penalties, other than those whose order is already passed.

In respect of default against which immunity has been granted shall be deemed to have completed without any further action on part of the Designated Authority.

Can a person who has previously filed for appeal file an application for immunity under this Scheme?

If a Defaulting company or any of its Officer has filed any appeal against any notice issued/complaint filed/order passed by any court or adjudicating authority under act, then the applicant company has to withdraw such appeal before filing an application for Immunity & shall file the Proof of Withdrawal along with the application for immunity.

At the time of making the application for the scheme, the company must furnish a copy of such withdrawal along with the application as proof.

What measures are available for Cases where order was passed but appeal wasn’t filed?

Where the order has been passed by the court and the company has not filed an appeal against the same as on the commencement of the scheme:-

  • The company is allowed 120 days to file an appeal before the Regional Director
  • During this period of 120 days, for the non – compliance of the order passed by the court with regard to the delay in filing of any documents for the same shall be condoned and no further action shall be initiated against the company.

How shall one apply for issue of Immunity under this Scheme?

  • Application for seeking immunity regarding belated documents filed under the Scheme may be made in e-form CFSS-2020 without any fee.
  • Application should be made after closure of the Scheme and after the documents are taken on record or approved by the Designated Authority, but not later than 6 months from closure of the Scheme
  • Designated Authority shall issue an Immunity Certificate on the basis of declaration made in e-form CFSS-2020, in respect of the documents filed under the Scheme

In what situations will immunity not be granted under this Scheme?

Immunity is not granted where:-

  • An appeal is pending in court against the company.
  • In case of management disputes pending before any court of law.
  • Where an order is passed by the court and no appeal has been made before the scheme came into force

In what situation will this Scheme not be applicable?

The Scheme would not apply to the following companies:

  • Companies against which Final notice of “Strike off” Under Section 248 already initiated by Designated authority
  • Where the company has already filed the application for Strike off with Registrar of Companies
  • Companies which have amalgamated under the Scheme of arrangement or compromise under the act
  • Where a company has already filed the Application for obtaining Status of Dormant Company U/s 455 of the act
  • Vanishing companies
  • Forms Regarding Increasing in Authorized Capital Form SH-7, Charge Related forms, CHG-1, CHG-4, CHG-8, & CHG-9.

What Opportunities under this Scheme are available for inactive companies?

The Scheme provides an opportunity to inactive companies to get a dormant status under section 455 with minimal compliance requirements or Strike off the name under Section 248 of the Act by making simple application with the normal fees.

The defaulting inactive companies may apply for the Scheme so as to file the due documents. Additionally, they may also do the following:-

  • Submit an application for Dormant Status under Section 455 of the Companies Act, 2013 by way of filing of e-Form MSC – 1 along with the prescribed fees.
  • Submit an application for striking off the name of the company from the Register of Companies.
  • Extension granted to file e-Form ACTIVE: An extended timeline between 1st April 2020 and 30th September 2020 is provided by MCA for the ‘ACTIVE non-compliant’ companies to come forward and file e-Form ACTIVE. The filing fee of Rs 10,000 will not apply.

What Revisions are made to the LLP Settlement Scheme 2020?

  • The LLP Settlement Scheme 2020 is applicable between the 1st of April, 2020 and the 30th of September, 2020.
  • Applicable to the defaulting LLPs for the filing of belated documents that were due for filing till the 31st of August, 2020.
  • No additional fees charged on the filing of the belated documents other than the normal application fees.
  • No prosecution by the Registrar for those defaulting LLP’s who complete the filing of all the belated documents and dues by the 30th of September, 2020.
  • The scheme is not applicable to LLPs who have made the application for the striking off of the name of the LLP from the Registrar as per the LLP Rules, 2009.

Companies Fresh Start Scheme, 2020 is an excellent step to bring non-complaint companies under the legal fold. The scheme is a golden opportunity for the companies to make a fresh start and to clear their past defaults. This would lead to setting an example for E-governance in near future.

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MCA notifies relaxation for filings relating to creation or modification of charges

MCA notifies relaxation for filings relating to creation or modification of charges

Introduction

The economic impact of the 2020 coronavirus pandemic in India has been largely disruptive. The lockdown though necessary has led to a disastrous impact on the economy. The Government of India announced a variety of measures to tackle the situation, from food security and extra funds for healthcare and for the states, to sector related incentives and tax deadline extensions.

Representations were also received by the MCA, requesting that the timelines related to filing of certain charge related forms to be suitably relaxed so as to provide a window of compliance for the registration of charges. The Central Government in exercise of its powers under section 460 read with section 403 of the Act and the Companies (Registration Offices and Fees) Rules, 2014 decided to introduce the “Scheme for relaxation of time for filing forms related to creation or modification of charges under the Companies Act, 2013” for the purpose of condoning the delay in filing certain forms related to creation/ modification of charges.

A similar scheme namely the Companies Fresh Start Scheme, 2020 (CFSS-2020) was also introduced earlier:-

  1. The MCA received representations from the stakeholders to provide a one-time opportunity to file all the pending documents including the annual filing of the company without charging higher additional fees on any delay.
  2. The MCA came up with the ‘Companies Fresh Start Scheme 2020’ in March 2020 to enable companies make good of any filing-related defaults, irrespective of duration of default, and make a fresh start as a fully compliant entity.
  3. This Scheme provided immunity to stakeholders who were unable to file specified documents including annual filing to ROCs.
  4. CFSS 2020 also granted immunity for any prosecution or proceeding against the company on account of delay in filing documents.
  5. The CFSS 2020 scheme is applicable from 1st April 2020 to 30th September 2020.

What documents are present with the MCA?

  1. The Companies Act provides for, and casts an obligation on companies incorporated under the Act, to file various forms, returns & documents with the Registrar of Companies (RoC) under the Ministry of Corporate Affairs (MCA).
  2. Requirements are laid down in various sections of the Act and in the rules/ regulations made there-under, which prescribe the forms, returns and other documents to be filed with the RoC.
  3. Thus, a large volume of information gets generated and stored as a by-product of administration and regulatory compliance of the Companies Act.
  4. The forms, returns and documents to be filed include various applications, returns, balance-sheet, prospectus, memorandum of agreement, article of association, particulars of charges, etc. As per the Act these documents are required to be maintained by the RoC.
  5. These documents contain thorough information about the companies, their net worth, shareholding and ownership pattern and detailed financial statements i.e. Balance Sheet and Profit & Loss Accounts.
  6. The information available with the RoC is relied upon by various courts, financial institutions etc.

What is the new ‘’Scheme for relaxation of time for filing forms related to creation or modification of charges under the Companies Act, 2013’’?

For the purpose of condoning the delay in filing certain forms related to the creation/ modification of charges, the Central Government decided to introduce a Scheme for relaxation of time for filing forms related to creation or modification of charges under the Companies Act, 2013.

The scheme shall be applicable in respect of Filing of Form No. CHG-1 and Form No. CHG-9 by a company or a charge holder, where the date of creation/modification of charge:

  1. Is before 1st March, 2020, but the timeline for filing such form had not expired under section 77 of the Act as on 1st March, 2020

Or

2. Falls on any date between 1st March, 2020 and 30th September, 2020 (both dates inclusive).

What benefit is provided under this scheme?

  1. If the charge is created before the 1st March, 2020 and date of registration of charge is fall between 1st March, 2020 to 30th September 2020, then the first day after 29th February, 2020 shall be reckoned as 1st October, 2020 for the purpose of counting the number of days within which the form is required to be filed under section 77 or section 78 of the Act.
  2. If the charge is created between 1st March, 2020 and 30 March 2020, then the period beginning from the date of creation/modification of charge to 30th September 2020 shall not be reckoned for the purpose of counting of days under section 77 or section 78 of the Act. In case, the form is not filed within such period, the first day after the date of creation/modification of charge shall be reckoned as 1st October, 2020 for the purpose of counting the number of days within which the form is required to be filed under section 77 or section 78 of the Act.

What is Section 77 and 78?

As per section 77 of the Companies Act, the charge must be registered with the RoC within 30 days from its creation or modification. This period can be extended up to 120 days, which would attract late fees. 

The scheme is also applicable for the timeline under section 78 which relates to the charge-holder filing the charges with the RoC in case the company fails to do it.

According to Section 78, where a company fails to register the charge within the period of 30 days referred in section 77, without prejudice to its liability in respect of any offence under this Chapter, the person in whose favor the charge is created may apply to the Registrar for registration of the charge along with the instrument created for the charge, within such time and in such form and manner as may be prescribed and the Registrar may, on such application, within a period of 14 days after giving notice to the company, unless the company itself registers the charge or shows sufficient cause why such charge should not be registered, allow such registration on payment of such fees, as may be prescribed.

When will this Scheme not be applicable?

The MCA barred the applicability of this circular on:-

  1. CHG-1 and CHG-9 Forms, which has already been filed before the date of issue of this Circular
  2. The timeline for filing the form has already expired under section 77 or section 78 of the Act prior to March 1, 2020
  3. If the timeline for filing the form expires at a future date, despite the exclusion of the time provided
  4. Filing of Form CHG-4 for the satisfaction of charges.

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