• By ADMIN
• Posted 07 Jul, 2020
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Companies Fresh Start Scheme (CFSS), 2020

CA.Selvakumar Selvaraj

Government of India, Ministry of Corporate Affairs has issued a general circular no.12/2020 dated 30th March 2020 to introduce Companies Fresh Start Scheme (CFSS), 2020. This scheme enables all non-compliant corporates to comply with by filing all pending e-Forms without additional meter fees and thus allows the defaulted companies to pay normal fee as if it is filed within due dates prescribed under Companies Act, 2013.

Object of the Scheme

Active Companies:

This scheme is to give an opportunity to Active Indian companies to have fresh start on a clean slate. It is an onetime opportunity to file all pending e-Forms with ROC. This scheme is introduced for condoning the delay in filing the documents/e-Forms with Registrar, in so far 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.

Inactive Companies:

Further, this scheme also for inactive companies to get their companies declared as “dormant company” under section 455 of the Companies Act, 2013 by filing a simple application at a normal fee. Inactive companies are those companies:-

a. which has not been carrying on any business or operation, or

b. has not made any significant accounting transaction during the last two financial years, or

c. has not filed financial statements and annual returns during the last two financial years.

{“Significant accounting transactions” means any transaction other than (a) payment of fees by the a company to the Registrar (b) payments made by it to fulfil the requirements of this Act; and any other law; (c) allotment of shares to fulfil the requirements of this Act; and (d) payments for maintenance of its office and records}

 Filing Fees

Only normal fees for filing of documents in ROC will be payable in such case during the period covered in this scheme of CFSS-2020 in line with section 403 of the Companies Act, 2013 read with Companies (Registration of Offices and fees) Rules, 2014. It is easy to enquire about fee payable for each form by following the link.

Period of force of CFSS-2020

It will be in force from 1st April 2020 to 30th September 2020.Further it is extended up to 31.12.2020

eForms Covered under CFSS-2020

Any of the documents, statement, returns under the Companies Act, 2013 including Annual filing which are overdue and not filed till 31st March 2020 are covered under this scheme.

Applicability of this Scheme:

It is applicable to all company which had defaulted in filing any such forms to ROC but not applicable to the following cases:-

a. To companies 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 any application has already been filed by the companies for action for striking off the name of the company from the registrar of companies.

c. To companies which have amalgamated under a scheme of arrangement or compromise under the Act.

d. Where application have already been filed for obtaining Dormant Status under section 455 of the Act before this Scheme. (i.e. before 1st April, 2020)

e. To vanishing Companies

f. Where any increase in authorized capital involved (Form SH-7 and also charge related documents (CHG-1, CHG-4, CHG-8 and CHG-9)

Extent and coverage of Immunity under this Scheme:

Immunity from the launch of prosecution or proceedings for imposing penalty shall be provided only to the extent such prosecution or proceedings for imposing penalty under the Act pertain to any delay associated with the filing of belated documents. Any other consequential proceedings, including any proceedings involving interest of any share holders or any other person qua the company or its directors or key managerial personnel would not be covered by such immunity.

Withdraw appeals to avail the benefit of this scheme

If the defaulting applicant 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, 1956/2013 , in respect of which the application for issue of immunity certificate , withdraw the appeal and furnish proof of such withdrawal along with the application.

Application in e-Form CFSS-2020 to be filed after closure of the scheme (i.e. 30th September, 2020) and after the document(s) are taken on file, or on record or approved by the Designated Authority but not after six months from the closure of the scheme. No fees payable on this e-filing of the Form. Based on filing of this Form, an immunity certificate shall be issued by competent authority.

Scheme for inactive companies

The defaulting inactive companies, while filing the due documents under CFSS-2020 can simultaneously, either:- 

a. Apply to get themselves as Dormant Company u/s 455 of the Companies Act, 2013 by filing Form MSC-1 at a normal fee, or

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

The Warning Signals

At the conclusion of the scheme CFSS-2020, 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.