How Companies Can Revive from Corona Pandemic – Companies Fresh Start Scheme,2020 (CFSS)

  • 01st, May 2020
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The Ministry of Corporate Affairs has launched another regulatory relief as per legal maxim – Vox populi i.e., Opinion of the people, by a new and fresh scheme called “Companies Fresh Start Scheme, 2020 (CFSS -2020) in order to make a fresh start on a clean slate for the defaulting companies. The scheme aims to provide a one-time waiver of additional fees for belated documents of the companies on Suo Moto basis and to provide relief to the law-abiding companies to reduce the burden of compliance during this worst health situation and economic disruptions caused by COVID 19.

 

Availability of the Scheme:

Start Date: 01st April’2020       End Date: 30th September’2020

 

Eligibility:

The Defaulting companies are permitted to file all belated documents ( there are total 64 Forms as listed in the Annexure) which were due for filing without any additional fees except the below two forms:

‐Form SH-7 – Increase in Authorised Share Capital

‐Form CHG-1, CHG-4, CHG-8 & CHG-9 – Filing of Charges related documents

 

Special Benefit for Inactive Companies:

The scheme gives an opportunity to “inactive companies” either to get their companies

‐Declared as Dormant Company under section 455 Of the Companies Act, 2013 by filing c-form MSC-I  at a normal fee on the said form; or

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

 

Ineligibility:

This Scheme shall not apply to the below companies

-To companies against which action for final notice for striking off the name has already been initiated by the Registrar of Companies (RoC).

-Where any application has already been filed by the companies requesting striking off the name of the company from the RoC;

-To companies which have amalgamated under a scheme of arrangement or compromise under the Companies Act;

-Where applications have already been filed for obtaining Dormant Status under section 455 of the Companies Act before the commencement of this Scheme;

-To vanishing companies;

 

Upshots of the Scheme:

-Waiver of Additional filing fee for the belated filing of returns/documents/forms as a one-time relaxation who are availing this scheme.

-An immunity certificate in respect of documents filed under this Scheme shall be issued by the designated authority based on the declaration made in the Form CFSS-2020.

-Immunity from the launching of Prosecution.

-Immunity from proceedings for imposing Penalty on account of delay associated with filings.

-Withdrawal of all proceedings of adjudication of penalties u/s 454 as deemed to have been completed after granting the immunity.

-Additional 120 days is allowed for the company to file an appeal if the last date of filing appeal against the order passed by adjudicating authority, falls between 1st March 2020 to 31st May 2020 and no prosecution initiated against the Company or officers for non-compliance of adjudicating authority order.

 

What if when the Scheme is not availed:

-The Designated authority has the power to take action on defaulting companies who have not availed this scheme to file the default documents after the expiry of the scheme.

-An additional filing fee shall be levied as per The Companies (Registration offices and fees) Rule, 2014 after the expiry of this scheme.

-The designated authority shall launch for prosecution & initiate proceedings for imposing Penalty.

 

Reason behind the introduction of this Scheme:

– Start-up’s/Entrepreneurs who have not started their business due to various reasons ( Sales orders not materialised, Cash flow problems, Directors conflict, Due to issue in 4M’s, unable to pay the huge penalty due to delay in the filing)

– Not filed the specified forms within the due date

– e-KYC by Directors – DIN deactivated

– Non-filing of an ACTIVE form

– Non – Filing of Commencement of business declaration

– Non- filing of Annual returns

– Existence of disqualified director of a defaulting company in a compliant company, which prevent the compliant company from filing any of its forms until the defaulting company filed the required forms.

– Opportunity to declare the INACTIVE companies as “Dormant company “or apply for “Stike off” on SUO Moto Basis

 

Annexure:  List of notified Forms which can be filed through CFSS, 2020

S No. Form No. Description
1 23C Appointment of Cost Auditors
2 MR-2 Form of Application to the Central Government for approval of appointment or reappointment and remuneration or increase in remuneration or waiver for excess or overpayment to managing director or whole-time director or manager and commission or remuneration to directors
3 ADT-2 Application for removal of auditor(s) from his/their office before the expiry of the term
4 NDH-2 Application for extension of time
5 DIR-3C Intimation of Director Identification Number by the company to the registrar
6 INC-12 Application for grant of License under section 8
7 MSC-1 Application to ROC for obtaining the status of dormant company
8 DIR-12 Particulars of appointment of directors and the key managerial personnel and the changes among them
9 INC-4 Intimation for Change in Member/Nominee
10 INC-6 One Person Company – Application for Conversion
11 INC-22 Notice of Situation or Change of situation of Registered Office of the Company
12 INC-27 Conversion of a public company into a private company or private company into a public company
13 20B Annual Return
14 21A Annual Return for a company having no share capital
15 23B Notice by Auditor
16 23D Information by cost auditor to Central Government
17 23AC Filing balance sheet and other documents with the Registrar
18 23ACXBRL Form for filing XBRL document in respect of balance sheet and other documents with the Registrar.
19 Form 66 Form for submission of Compliance Certificate
20 AOC-4 Form for filing the financial statement and other documents with the Registrar
21 AOC-4 CFS Form for filing consolidated financial statements and other documents with the Registrar
22 AOC-

4(XBRL)

Form for filing XBRL document in respect of financial statement and other documents with the Registrar
23 ADT-1 Information to the Registrar by company for appointment of auditor
24 ADT-3 Notice of Resignation by the Auditor
25 BEN-2 Return to the Registrar in respect of declaration under section 90
26 CRA-2 Form of Intimation of appointment of cost auditor by the company to Central Government
27 CRA-4 Form for filing Cost Audit Report with the Central Government
28 DPT-3 Return of deposits
29 DPT-4 Statement regarding deposits existing on the commencement of the Act
30 GNL-2 Form for submission of documents with the Registrar
31 INC-5 One Person Company- Intimation of exceeding threshold
32 IEPF-1 Statement of amounts credited to the Investor Education and Protection Fund
33 IEPF-2 Statement of unclaimed or unpaid amounts
34 IEPF-3 Statement of shares and unclaimed or unpaid dividend not transferred to the Investor Education and Protection Fund
35 IEPF-4 Statement of shares transferred to the Investor Education and Protection Fund
36 IEPF-6 Statement of unclaimed or unpaid amounts to be transferred to the Investor Education and Protection Fund
37 IEPF-7 Statement of amounts credited to IEPF on account of shares transferred to the fund
38 IEPF-5 everificati on report Application to the authority for claiming unpaid amounts and shares out of Investor Education and Protection Fund (IEPF) – E-verification report
39 I-XBRL Form for filing XBRL document in respect of cost audit report and other documents with the Central Government
40 MGT-7 Annual Return
41 MR-1 Return of appointment of key managerial personnel
42 MSC-3 Return of dormant companies
43 NDH-1 Return of Statutory Compliances
44 NDH-3 Return of Nidhi Company for the half year ended
45 NDH-4 Application for declaration as Nidhi Company and for updation of status by Nidhis
46 PAS-3 Return of allotment
47 SH-11 Return in respect of buy-back of securities
48 A-XBRL Form for filing XBRL document in respect of compliance report and other documents with the Central Government
49 DIR-3

KYC/Web form

Application for KYC of Directors
50 FC-1 Information to be filled by Foreign company
51 FC-2 Return of alteration in the documents filed for registration by foreign company
52 FC-3 Annual accounts along with the list of all principal places of business in India established by foreign company
53 FC-4 Annual Return of a Foreign Company
54 INC-22A Active Company Tagging Identities and Verification (ACTIVE)
55 INC-20A Declaration for commencement of business
56 AOC-5 Notice of address at which books of account are maintained
57 DIR-11 Notice of resignation of a director to the Registrar
58 GNL-3 Particulars of person(s) or key managerial personnel charged or specified for the purpose of sub-clause (iii) or (iv) of clause 60 of section 2
59 INC-20 Intimation to Registrar of revocation/surrender of a license issued under section 8
60 INC-28 Notice of order of the Court or Tribunal or any other competent authority
61 MGT-6 Return to the Registrar in respect of declaration under section 89 received by the company
62 MGT-10 Changes in the shareholding position of promoters and top ten shareholders
63 MGT-14 Filing of Resolutions and agreements to the Registrar under section 117
64 MGT-15 Form for filing Report on Annual General Meeting

 

This a good opportunity for all the start-ups/entrepreneurs to avail the scheme introduced by the Government. Most of our clients are updated with the present norm applicable to their companies due COVID 19, through our statutory compliance software – Compfie.

 

Compfie is a global e-compliance platform, helps to track and trigger your organization compliance status, as well as provides you with the details about updated norms and checklist applicable for your industry in domains such as Labour, Finance, Commercial, Industrial, Environmental, Health and Safety, Corporate, Secretarial and Employment laws.

 

Our e- compliance platform helps your organization handle your compliance and be Audit ready through an easy dashboard and ready consolidated reports anytime.

To know much about our compliance solution, do mail your requirement to the marketing@aparajitha.com.

 

Shivadharini SNS

Aparajitha Corporate Services

Consultation and Audit department

 

Source: General Circular No.12/2020 Dt. 30th March’2020 issued by MCA

 

Disclaimer: “The article represents the opinions of the author and the author is solely responsible for the facts, cases, and legal or otherwise reproduced in the article”

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