Companies Fresh Start Scheme 2020 (CFSS-2020)
The ministry of corporate finance has received much representation form stake holders 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, to resolve this ministry exercise its power under section 460 & 403 of companies act 2013 and come with a scheme called CFSS-2020 which will be applicable form 1st of April 2020 to 30th September 2020.
To provide immunity to stakeholders of the company who are unable to file specified documents including annual filing to ROCs, the ministry of corporate affairs has launched companies fresh start scheme 2020 (CFSS-2020)
Under this scheme, the ministry has decided to provide an opportunity to all defaulting companies registered in India to make fresh start again after complying with all the required pending compliances.
This scheme also grants immunity for any prosecution or proceeding against the company for imposing any penalty on account of delay in filing documents.
HIGHLIGHTS OF CFSS:
➲ No Additional Fees on the pending filing
➲ Immunity of prosecution for imposing a penalty
➲ Immunity of prosecution regarding the interest of KMP for imposing a penalty
➲ Convert inactive companies to dormant without late fees
Which Forms covered In CFSS-2020
➲ MGT-7 Annual Return Form
➲ AOC-4 Financial Statement Form
➲ ADT-1 Appointment of Auditor Form
➲ MGT-14 Filing of Resolutions and agreement to the Registrar
➲ INC-22A Active Company Tagging Identities and Verification (ACTIVE)
➲ INC-20A Declaration for the commencement of business
➲ PAS -3 Return of Allotment
➲ DIR-12 Director appointment and the key managerial personnel
➲ DIR3-KYC / DIR3-KYC Web
BENEFITS UNDER THE SCHEME
➲ Under this scheme the defaulting companies shall required to file the belated documents including annual filing by paying nominal fees without any additional fees as per companies registration offices and feel rules, 2014
➲ This scheme offers corporate immunity in connection with litigation or proceeding to enforce an additional penalty for failure to file late documents.
➲ It doesn’t provide immunity on any other consequential proceeding including proceeding involving the interest of its director or key managerial person (KMP) etc.
➲ If the company appeals against any penalty order issued by the competent court or adjudicating authority then the company must first withdraw its appeal application and provide evidence of withdrawal in order to seek immunity under this CFSS 2020 scheme.
➲ The competent court or adjudicating authority has issued an order for prosecution and the company or officer has not lodged an appeal before the appealing authority or regional director pursuant to section 454(6) of the company acts 2013 as the following issues apply on commencement of this scheme:-
a) The Company or officers may lodge an appeal with the Regional Director within 120 days if the last filing date of the appeal falls between 1 March 2020 and 31 May 2020 & No action instituted against the Company or officers for failure to comply with an adjudicating authority order under section 454(8) of the Companies Act, 2013.
➲ The business or officer must file Eform "CFSS-2020" electronically, free of charge, with ROCs through MCA portal in order to obtain immunity under this scheme and ROCs approved or accepted all documents within 6 months of the closure of this scheme but for following cases immunity will not be granted:
➲ No immunity for any appeal against client management disputes pending in court
➲ No immunity for any penalty imposed by a judge or adjudicating body and no recourse favours the company or officers prior to the implementation of the scheme.
Non Applicability of scheme (CFSS-2020):
CFSS-2020 scheme shall not apply in the following cases are:-
➲ Final notice to strike off the company name already issued by the ROCs under section 248 of the Companies Act, 2013
➲ The company applied for strike off the company's name from ROCs
➲ Companies amalgamated under the agreement & arrangement scheme
➲ If the company has applied for dormant status under section 455 of companies act 2013
➲ Vanished company
➲ If the company has applied for an increase in authorized share capital (Form SH-7),
➲ If the company has applied for charge related documents (CHG-1, CHG-4, CHG-8, & CHG-9)
FOR INACTIVE COMPANIES:
The default inactive companies that have applied for the CFSS-2020 to file due documents and at the same time register for the following actions
➲ Application for dormant status under section 455 of the Companies Act, 2013 by sending nominal fee MSC-1 to ROCs;
➲ Application for striking off the name of the company from ROCs.