Applicability and Non-applicability of Company Fresh Start Scheme (CFSS), 2020

[Prasanna CP]

The Ministry of Corporate Affairs (MCA) has received representations from various stakeholders requesting for grant of one-time opportunity, so as to enable them to complete their pending compliances by filing necessary documents in the MCA-21 registry including annual filings without being subject to a higher additional fees on account of any delay.

In furtherance to the Ministry’s Circular No. 11/2020, dated 24^th March. 2020 and in order to facilitate the companies registered in India to make a fresh start on a clean slate, this Ministry has decided to take certain alleviative measures for the benefit of all companies.

The MCA in exercise of powers conferred under section 460 read with section 403 of the Companies Act, 2013 has provided an “Fresh start” opportunity to corporates through a General Circular No. 12/2020 dated 30^th March 2020 by issuing a scheme called “Companies Fresh Start Scheme (CFSS-2020)”, condoning the delay in filing the specified documents with the Registrar, insofar 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.

The benefits arising out of the scheme to the companies will be in the form of waiver of additional fees for delayed submission of documents, immunity from prosecutions and penalties. Only normal fees for filing of documents in the MCA-21 registry will be payable during the period of CMS-2020(1.4.2020 to 30.9.2020).

Requirements under Companies Act, 2013

Companies Act, 2013 requires all companies to make annual statutory compliance by filing the Annual Return and Financial Statements.

Forms	Purpose of form	Applicability under CFSS-2020
Form AOC-4/Form AOC-4(XBRL)	Form for filing document/XBRL document in respect of financial statement and other documents with the Registrar	Applicable
Form MGT-7	Form for filing annual return by a company	Applicable
From AOC-4(CFS)	Form for filing consolidated financial statements and other documents with the Registrar	Applicable
Form AOC-4 NBFC	Form for filing financial statement and other documents with the Registrar for NBFCs	Applicable

Apart from this, various other statements, documents, returns, etc., are required to be filed on the MCA-21 electronic registry within prescribed time limits.

However, the scheme is not applicable for the following cases:

• An application has been already filled by the company for action of striking off the name of the company from the register of companies under section 248 of the Companies Act, 2013.
• Final notice for striking off the name of the company has already been issued by the designated authority.
• Companies which has amalgamated under the scheme of compromises and arrangement under section 230 to 240 in chapter XV of Companies Act, 2013.
• An application has been already filled by the company for obtaining Dormant Status under section 455 of the Companies Act, 2013 before this scheme.
• Vanishing companies
• In case of increase in authorized capital
• Charge related documents

Applicability and Non-applicability of CFSS, 2020 for certain forms

Services	Forms	Purpose of form	Applicability
Approval services	From INC-6	One Person Company- Application for Conversion	Applicable
	Form STK-2	Application by company to ROC for removing its name from register of Companies	Applicable(subject to conditions)*
	Form MSC-1	Application to Registrar for obtaining the status of dormant company	Applicable(subject to conditions)*
Change Services	Form INC-22	Notice of situation or change of situation of registered office	Applicable
	Form SH-7	Notice to Registrar of any alteration of share capital	Applicable( in case of increase in share capital it is not applicable)
	Form DIR-12	Particulars of appointment of Directors and the key managerial personnel and the changes among them	Applicable
Charge Management	Form CHG-1	Application for registration of creation, modification of charge (other than those related to debentures)	Not Applicable
	Form CHG-4	Particulars for satisfaction of charge thereof	Not Applicable
Compliance related filings	Form BEN-2	Return to the Registrar in respect of declaration under section 90 (significant beneficial owner)	Applicable
	Form CRA-4	Form for filing Cost Audit Report with the Central Government.	Applicable
	Form DPT-3	Return of deposits	Applicable
	Form ADT-1	Information to the Registrar by Company for appointment of Auditor	Applicable
	Form ADT-3	Notice of Resignation by the Auditor	Applicable
	Form FC-4	Annual Return of a Foreign company	Applicable
	Form MSC-3	Return of dormant companies	Not Applicable

 The above listed forms are only for illustrations on applicability. There are several other forms which are covered under this scheme.

*However, it is important to note that the defaulting inactive companies, while filing due documents under CFSS-2020 can simultaneously apply to get themselves declared as a Dormant Company under section 455 at a normal fee on said form, apply for striking off of the name of the company by paying the normal fee payable.

Filing fees for filing such statements, documents, returns, etc., is governed by section 403 of the Companies Act, 2013 read with Companies (Registration Offices and Fees) Rules 2014. Detailed procedure regarding the filing of application, manner of payment and obtaining the immunity certificates can be referred in said circular.

Conclusion

India recorded continuous improvement in its ease of doing business ranking issued by the World Bank on account of steps being taken by the government. In this regard, the CFSS-2020 is a welcome move issued rightly at the time considering the economic crisis due to the outbreak of COVID-19.