Overview : <p style="margin-top: 0cm; line-height: 16pt; background-image: initial; background-position: initial; background-size: initial; background-repeat: initial; background-attachment: initial; background-origin: initial; background-clip: initial;"><span style="font-size:11.0pt;font-family:&quot;PT Serif&quot;,&quot;serif&quot;;color:#47525E">The Ministry of Corporate Affairs (MCA) has come up with the ‘Companies Fresh Start Scheme 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.</span><span style="color: rgb(71, 82, 94); font-family: &quot;PT Serif&quot;, serif; font-size: 11pt;">To provide a similar facility to Limited Liability Partnerships (LLPs), the MCA has also revised the ‘LLP Settlement Scheme, 2020’, which is in vogue today.</span></p>

Companies Fresh Start Scheme, 2020

In pursuance of the Government of India’s efforts to provide relief to law abiding companies and Limited Liability Partnerships (LLPs) in the wake of COVID 19, the Ministry of Corporate Affairs, has introduced the “Companies Fresh Start Scheme, 2020” and revised the “LLP Settlement Scheme, 2020” which is already in vogue to provide a first of its kind opportunity to both companies and LLPs to make good any filing related defaults, irrespective of duration of default, and make a fresh start as a fully compliant entity. The Fresh Start scheme and modified LLP Settlement Scheme incentivize compliance and reduce compliance burden during the unprecedented public health situation caused by COVID-19. The USP of both the schemes is a one-time waiver of additional filing fees for delayed filings by the companies or LLPs with the Registrar of Companies during the currency of the Schemes, i.e. during the period starting from 1st April, 2020 and ending on 30th September, 2020. 2. The Schemes, apart from giving longer timelines for corporates to comply with various filing requirements under the Companies Act 2013 and LLP Act, 2008, significantly reduce the related financial burden on them, especially for those with long standing defaults, thereby giving them an opportunity to make a “fresh start”. Both the Schemes also contain provision for giving immunity from penal proceedings, including against imposition of penalties for late submissions and also provide additional time for filing appeals before the concerned Regional Directors against imposition of penalties, if already imposed. However, the immunity is only against delayed filings in MCA 21 and not against any substantive violation of law. 3. Details of the both the Schemes may be perused from the Circulars dated 30.03.2020, issued by the Ministry of Corporate Affairs.

Queries:

What forms which can be filed under the Companies Fresh Start Scheme, 2020 ?

The forms which are subject to additional fee under section 403 of Companies Act, 2013.

Whether a company as striked off by ROC due to non-filing of returns avail the benefits under the Companies Fresh Start Scheme, 2020 ?

Such companies shall make an application to NCLT for revival of the company and on being active can file returns under the scheme on orders of NCLT.

Whether the active non-compliant companies can file returns under the Companies Fresh Start Scheme, 2020 ?

Yes, the companies can file belated returns under  the scheme subject to restrictions as issued for active non-compliant companies. 

Do we need to make any application before filing such forms?

No application is required to be filed before filing belated returns. However on completion of scheme, the company shall file e-form CFSS-2020 (yet to be deployed) with no fee and obtain immunity certificate.

Can the company file form MGT-14 under the scheme?

No, the same is not governed under the provisions of Section 403 of Companies Act, 2013.

What about the companies where the order is issued for belated filing of returns?

In the cases, wherein the penalties are imposed under the Act and the company has not further appealed to higher authorities and such period of appeal lies between 1^st March 2020 to 31^st May 2020, a period of additional 120 days be allowed for filing of appeal from last date as may be specified under the order.

Further, such companies can also avail to withdraw the appeal, if any filed and avail benefits of the scheme.

What will be the filing fee for application of strike off or dormant company?

Normal fee depending upon paid up capital of the companies as prescribed under The Companies (Registration and Office) Rules, 2014 to apply for dormant companies and Rs.10,000/- to apply for strike off under STK-2.

Will the directors disqualified under the Act, after filing due returns will be regularized and disqualification be removed?

No, the scheme does not waive the disqualification of Directors and the status of DIN will continue to remain same even after filing of such returns.