The Ministry of Corporate Affairs has issued two circulars on 30.03.2020, namely “Companies Fresh Start Scheme, 2020” (CFSS-2020) and “LLP Settlement Scheme, 2020” (LLPSS-2020).
Both CFSS-2020 and LLPSS-2020 shall come into force on the 01.04.2020 and shallremain in force till 30.09.2020.
Applicability of CFSS-2020: Any defaulting company is permitted to file belated documents which were due for filing on any given date as per this scheme.
- “defaulting company” means a company defined under the Companies Act, 2013, and which has made a default in filing of any of the documents, statement, returns etc including annual statutory documents on the MCA-21 registry.
As per Scheme Companies have to pay only NORMAL FEES of the forms without any ADDITIONAL FEES.
In addition to this scheme gives an opportunity to inactive companies to get their companies declared as ‘dormant company’ under section 455 of the Companies Act, 2013 by filing a simple application at a normal fee.
CFSS-2020 shall apply on following forms including:
- MGT-7 (Form for filing annual return by a company)
- AOC-4 (Form for filing financial statement and other documents with the Registrar)
- PAS-3 (Return of allotment)
- MGT-14 (Filing of Resolutions and agreements to the Registrar)
- ADT-1 (Information to the Registrar by Company for appointment of Auditor)
- Any other prescribed form by the ROC.
CFSS-2020 shall not apply in certain cases:
- Companies against which action for final notice for striking off the name u/s 248 of the Companies Act, 2013 has already be initiated by the ROC.
- Where application has already been filed by the companies for action of Striking off the name of the Company from the Register of companies.
- Companies which have amalgamated under scheme of compromise or arrangement under the act.
- Where application have already been filed for obtaining the status of Dormant company.
- To Vanishing Companies.
- Where any increase in authorized capital is involved (Form SH-7) and also charge related documents (CHG-1, CHG-4, CHG-8 and CHG-9).
Effect of CFSS-2020
- No Need to pay additional fees on any return.
- ROC shall provide immunity certificate to Company.
- Defaulting Companies shall withdraw the appeal against any prosecution launched or the proceedings for imposing penalties initiated, if any.
- ROC Shall withdrawal all the prosecution pending regarding such forms/ returns.
- ROC shall withdrawal the proceedings of adjudication of penalties u/s 454.
Applicability of LLPSS-2020: Any “defaulting LLP” is permitted to file belated documents, which were due for filing till 31st August, 2020.
- “defaulting LLP” means a LLP registered under the Limited Liability Partnership Act, 2008 which has made a default in filing of documents on the due date(s) specified under the LLP Act, 2008 and rules made thereunder.
- “belated documents” means all documents or forms which are required to be filed in the MCA-21 registry under the provisions of LLP Act, 2008 and the rules made thereunder.
Manner of Payment of fee on filing of belated documents for seeking immunity under LLPSS-2020: The defaultingLLPs have to pay only NORMAL FEES of the documents or return without any ADDITIONAL FEES.
Immunity Certificate to be provided by the ROC: The defaulting LLPs, which have filed their belated documents till 30th September 2020 and made good the default, shall not be subjected to prosecution by the ROC.
LLPSS-2020 shall not apply to LLPs which have made application in Form 24 to the ROC for striking off their names from the register as per provisions of Rule 37(1) of the LLP Rules, 2009.