MCA Announcement: Companies Fresh Start Scheme 2020

April 3, 2020 / Articles / By

On 30th March 2020, the Ministry of Corporate Affairs (MCA) announced the ‘Companies Fresh Start Scheme (CFSS) 2020’.

CFSS condones delay in filing the forms mentioned below with the Registrar and relates to:

  1. charging of additional fees
  2. granting of immunity from prosecution
  3. proceedings for imposing penalty on account of delay associated with filings

CFSS 2020 will enable companies to make good on any longstanding filing-related defaults, irrespective of duration of default, and make a ‘fresh start’ as fully compliant business entities. Along with the modified LLP Settlement Scheme, the CFSS is the government’s effort to reduce the compliance and financial burdens on companies during the COVID-19 global crisis.

During the period starting from 1st April and ending on 30th September, both schemes offer a one-time waiver on additional filing fees for delayed filings with the RoC by companies or LLPs. They offer longer timelines for corporates to comply with various filing requirements as per Companies Act 2013 and LLP Act, 2008. They also contain a provision for giving companies and LLPs immunity from penal proceedings, including against the imposition of penalties for late submissions. This means that they have to pay only normal fees with forms without additional fees. But if penalties are already imposed, entities have additional time for filing appeals before the concerned Regional Directors. However, the immunity is only against delayed filings in MCA 21 and not against any substantive violation of law.

CFSS shall apply on the following forms:

  • Annual Return- MGT-7
  • Financial statement- AOC-4
  • Other forms required to be filed with the RoC including:
    • PAS-3
    • MGT-14
    • ADT-1

CFSS shall not apply on these forms:

  • SH-7 for increase in authorised capital
  • Charges-related forms such as CHG-1, CHG-4, CHG-8 or CHG-9

CFSS shall not apply on:

  • Companies against whom action for final notice for striking  off the name u/s 248 of the act has already been initiated by a Designated Authority
  • Companies that have already filed STK-2 for strike off of Company with the ROC
  • Companies that have amalgamated
  • When application has already been filed for obtaining dormant status
  • Vanishing companies
  • Companies marked for CIRP or liquidation

Taxguru is still operational during the COVID-19 crisis. However, to keep our staff safe, we have adopted a Work-From-Home model. For any queries or concerns, please call 9224618250 email us at info@mytaxguru.net.

Disclaimer: The information is provided purely for informational and educational purposes only. It should not be misconstrued as legal advice. Taxguru cannot take any responsibility for the result or consequences of any attempt to use or adopt any of the information presented herein.

Post Views: 474
Spread the love

Leave a Comment