Companies Fresh Start Scheme, 2020 (CFSS)

As expected, MCA has finally announced the Companies Fresh Start Scheme 2020 (CFSS) giving one time opportunities to defaulting companies to file the pending forms Without any additional fees and seek immunity from the penalties and prosecutions as provided under Companies Act, 2013.

As the name of the scheme suggests, it is a one-time opportunity given to all the defaulting companies to start afresh. Companies Fresh Start Scheme, 2020 (CFSS) will condone the delay in filing the documents with Registrar (ROC) in so far as it relates to charging of additional fees and granting of immunity from the launching of prosecution or proceedings for imposing a penalty on account of delay associated with certain filings.

Important points of Companies Fresh Start Scheme, 2020(CFSS) are as below:

• The Scheme is valid between April 1, 2020 to September 30, 2020
• The scheme enables company to file any document as may be required under Companies Act, 2013 which is due for filing on any given date without any additional fees. Except for few specified forms which are excluded.
• Immunity under the CFSS is provided from 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  pertain to any delay associated with the filings of the belated documents.
• Any other consequential proceedings, including any proceeding involving interests of any shareholder or any other person of the company or its directors or KMP would not be covered by Immunity.
• Companies filing any belated document under the scheme may file form CFSS 2020 to avail immunity for such delay after filing of such belated document but not after the six months of the expiry of the Scheme.
• There is no fees for filing of Form CFSS 2020.
• Based on declaration and subject to certain limitations,  a Certificate of Immunity will be issued on filing of form CFSS 2020
• Companies Fresh Start Scheme, 2020(CFSS) shall not apply to
  • Strike off companies or companies against which action for final notice is already initiated by ROC.
  • Companies that have filed an application for strike off with ROC.
  • Dormant Companies
  • Vanishing Companies
  • For Forms like Increase in Capital (SH-7), Charge Related forms (CHG 1, CHG 4, CHG 8 and CHG 9)
• Defaulting Inactive Companies, while filing the Form CFSS 2020 can simultaneously either:
  • Apply for Dormant Status by filing form MSC 1; or
  • Apply for strike off by filing Form STK 2.
• At the conclusion of Scheme, it is expected that ROC will initiate the action against defaulting companies which have not filed pending documents.

Disclaimer:

This material and the information contained herein are prepared by JMJA & Associates LLP, Practising Company Secretaries (JMJA) is intended to provide general information on a particular subject or subjects and is not an exhaustive treatment of such subject(s). None of JMJA, its associate firms, or its members/employees is, by means of this material, rendering professional advice or services. The information is not intended to be relied upon as the sole basis for any decision which may affect you or your business. Before making any decision or taking any action that might affect your personal finances or business, you should consult a qualified professional adviser. JMJA shall not be responsible for any loss whatsoever sustained by any person who relies on this material.

Also read:

Official Circular of MCA on Companies Settlement Scheme, 2020