COMPANY LAW

Companies Fresh Start Scheme 2020 (CFSS-2020)

Companies Fresh Start Scheme, 2020 (CFSS-2020)

-The Ministry of corporate affairs issued a scheme known as Companies fresh start Scheme 2020 (CFSS-2020).

-This Scheme provides immunity to stakeholders who unable to file specified documents including annual filing to ROCs.

-CFSS-2020 also grant immunity for any prosecution or proceeding against the company for imposing any penalty on account of delay in filing documents.

-The Ministry has decided to provide an opportunity to all the companies registered in India to make a fresh start on a clean slate.

Provisions of Companies Fresh Start Scheme, 2020 (CFSS-2020)

• The CFSS 2020 scheme remain to enforce from 1st April 2020 to 30th September 2020.
• The Ministry received much representation from the stakeholders 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.
• The ministry exercises his power under section 460 & 403 of the Companies Act, 2013 and introduces the scheme “(CFSS-2020)”.
• The Scheme also provides an opportunity to the inactive company to convert into a dormant company under section 455 of companies act, 2013 by filing form MSC-1 with nominal fees & help the inactive companies to remain on ROCs register with minimum compliance requirement.
• The defaulting company shall require to file the belated documents including annual filing by paying nominal fees (without including Additional Fees) as per Companies (Registration Offices and Feel Rules, 2014)
• This Scheme provides immunity to companies in relation to prosecution or proceeding for imposing an additional penalty for not filing of belated documents.
• This Scheme doesn’t provide immunity on any other consequential proceedings including proceeding involving the interest of its directors or key managerial personnel etc.
• If the company appeal against any order of prosecution for penalty passed by the competent court or adjudicating authority then the company first need to withdraw his application of appeal and furnish the proof of withdrawal to avail immunity in this CFSS 2020 scheme.
• The competent court or adjudicating authority passed an order to prosecute and company or officer didn’t file the appeal before the appellate authority or regional director under section 454(6) of the companies act, 2013 as on commencement of this Scheme then the following things apply are: –

1. The Company or officers are allowed 120 days to file an appeal before the regional director if the last date of filing appeal falls between 1st March 2020 to 31st May 2020 &

2. No prosecution initiated against the Company or officers for non-compliance of adjudicating authority order under section 454(8) of the companies act, 2013

• The company or officer need to file electronically Eform “CFSS-2020” without any fees with ROCs through MCA portal to availed immunity under this scheme & ROCs approved or taken on file all documents within 6 months from the closure of this scheme EXCEPT

1. No immunity for any appeal pending in the court against the company management disputes;
2. No immunity for any case of conviction ordered passed by a court or adjudicating authority & no appeal prefers by the company or officers before the scheme came in enforce.

Non-Applicability of Companies Fresh Start Scheme, 2020 (CFSS-2020)

This scheme shall not apply in the following cases are: –

• Final notice for striking off the name of the company under section 248 of the companies act, 2013 already issued by the ROCs;
• The company made an application for striking off the name of the company from ROCs;
• Companies amalgamated under the scheme of compromise & arrangement;
• The company applied for dormant status under section 455 of the companies act, 2013 before the scheme introduction
• Vanishing Companies;
• Documents related to Increase in authorised share capital (Form SH-7);
• Charge related documents (CHG-1, CHG-4, CHG-8 & CHG-9);

Scheme for Inactive Companies

The defaulting inactive companies applied for the CFSS-2020 for filing due documents and simultaneously apply for the following actions are: –

• Application for dormant status under section 455 of the companies act, 2013 by filing MSC-1 to ROCs with nominal fees;
• Application for striking off the name of the company from ROCs.