Companies Fresh Start Scheme 2020

(Also called CFSS -2020)

Ministry of corporate Affairs has come up with the scheme called Companies Fresh Start Scheme 2020 (also called CFSS -2020) vide its General Circular No. 12/2020 dated 30th March, 2020.

The Ministry had received various representation from stakeholders requesting a scheme where the defaulting companies can file its pending compliances without being subject to additional fees.

The fresh start scheme will motivate the defaulters to file their pending compliances and to make good their default by filing pending documents and granting of immunity from launching of prosecution or proceedings for imposing penalty on account of delay associated with certain filings during the unprecedented lockdown caused by COVID-19.

The Scheme is applicable to Defaulting Companies for filing belated documents due for filing on any given date. A defaulting company means a company which has default in filing any documents, statements, returns etc. including annual statutory documents on MCA 21 registry. The Companies Fresh Start Scheme (CFSS) is applicable between the 1st of April, 2020 and the 30th of September, 2020.

Benefits of Companies Fresh Start Scheme (CFSS), 2020:-

Pay only Normal fees, no additional fee payable
Immunity against prosecution and proceedings for imposing penalty only where:-
– The prosecution and proceedings arose due to the delay in filing of belated documents.
– No other cases covered.

Following are the cases where Companies Fresh Start Scheme (CFSS), 2020 is not applicable:-

Where the action for final notice of striking off the name as per the Companies Act, 2013 has already been initiated by the Designated Authority.
Where the company has already filed the Form STK – 2 along with the prescribed fees for the striking off of the name of the company from the Register of Companies.
Where the companies have been amalgamated under the scheme of arrangement or compromise.
Where the application for Dormant Status has been filed by way of Form MSC – 1 along with the prescribed fees.
Vanishing companies.
Companies that are marked for the Corporate Insolvency Resolution Process or Liquidation.
Where the following are involved:-
– Increase in the Authorised Capital (Form SH – 7)
– Charge related documents (CHG – 1, CHG – 4, CHG – 8, CHG – 9)

Withdraw of appeal before filing application under CFSS 2020

In case if any notice is issued or complaint is filed or order is passed by a court or adjudicating authority against the defaulting company for violation of provisions of Companies Act, 2013 and defaulting company or its officer in default has filed appeal against it.

Subsequently, such company intends to make an application under CFSS with respect to such matter. In such case, company shall be first required to withdraw such appeal before filing application for issue of immunity certificate. Proof of withdrawal will be furnished with application

Companies Fresh Start Scheme (CFSS), 2020 for Inactive Companies

This scheme allows inactive companies to get their companies declared as “dormant company” under section 455 of the Companies Act 2013 by filing e-form MSC-1 at a normal fee OR apply for striking off the name of the company by filing e-form STK -2 at the prescribed fee.

Application for issuance of immunity certificate

The Company is required to mention the SRN No. of the e-form in e-form CFSS, 2020 for getting the immunity certificate issued by the Registrar of Companies on which there is no filing fees. The Form provides the companies with immunity for a period of 6 months after the date of closure of the CFSS 2020.

Effect of Company Law Fresh Start Scheme, 2020

Company shall withdrawal of appeal against any prosecution launched.
ROC shall withdrawal all the prosecution pending regarding such forms/ returns.
ROC shall withdrawal the proceedings of adjudication of penalties u/s 454.

Consequences faced by company if benefits of CFSS, 2020 not availed:-

Normal fee payable on the forms;
Additional Fee which can go in Lakhs;
Action for Strike Off by the Registrar;
Prosecution/ Heavy Penalty for the Directors & other Officers in default.