COMPANIES FRESH START SCHEME (CFSS), 2020

In order to facilitate Indian Companies to make a Fresh Start on a clean slate, the Ministry of Corporate Affairs has come up with a scheme in its circular dated 24-03-2020 as a relief measure in COVID-19 Pandemic to assist the Companies to complete the Pending compliances at a nominal fee (Without Any Additional Fees). This scheme is called COMPANIES FRESH START SCHEME (CFSS), 2020.It is an Amnesty Scheme for the by the Ministry of Corporate Affairs in which a One Time Opportunity has been provided to the Defaulting Companies to complete all Pending Compliances without incurring any Additional Fees on account of Delay in Filing of Documents.

What exactly is companies fresh start scheme (CFSS)?

Well, the Defaulting Companies which have not filed Annual returns for the past years and not able to file currently due to the enormous additional fee, will now be given a waiver from the additional fees and need to pay only the Normal fee for filing the forms. This will be a huge relief for many Companies as the major burden is waived away. Going forward, it enables them to be compliant with the Company Act 2013 provisions and carry on the business in an efficient manner.  

What is the Time limit for this scheme?

This Scheme will be effective till 30th September 2020 (Extended Date: 31st December 2020).

What are the forms that CAN be filed bu a company under this scheme?

S.No.ActForm No.Form Description
  1CA 1956  20BAnnual Return.
2CA 1956  21AAnnual Return for company having no share capital.
3CA 195623BNotice by Auditor.
4CA 195623CAppointment of Cost Auditors.
5CA 1956  23DInformation by Cost Auditor to Central Government.
6CA 1956  23ACFiling       Balance       Sheet       and                other documents with the Registrar
7CA 1956  23AC- XBRLForm for filing XBRL document in respect of Balance Sheet and other documents with the Registrar.
8CA 1956  Form 66Form    for    submission    of             Compliance Certificate.
9CA 1956    I-XBRLForm for filing XBRL document in respect of Cost Audit Report and other documents with the Central Government.
    10  CA 1956    A-XBRLForm for filing XBRL document in respect of compliance report and other documents with the Central Government.
11CA 2013INC-4Intimation for Change in Member/Nominee.
12CA 2013  INC-5One      Person      Company-Intimation            of exceeding threshold.
13CA 2013  INC-6One    Person    Company–Application       for Conversion.
14CA 2013  INC-12Application   for   grant   of   License                     under section 8.
15CA 2013    INC-20Intimation           to           Registrar                           of revocation/surrender of license issued under section 8.
16CA 2013INC-20ADeclaration for Commencement of Business.
17CA 2013  INC-22Notice of Situation or Change of situation of Registered Office of the Company.
18CA 2013INC- 22A(ACTIV E)  Active Company Tagging Identities and Verification (ACTIVE).
19CA 2013    INC-27Conversion of Public Company into Private Company or Private Company into Public Company
20CA 2013  INC-28Notice of Order of the Court or Tribunal or any other competent authority.
21CA 2013PAS-3Return of allotment.
22CA 2013SH-11Return in respect of Buy-Back of securities.
23CA 2013DPT-3Return of Deposits.
24CA 2013  DPT-4Statement regarding deposits existing on the commencement of the Act.
25CA 2013    MGT-6Return   to   the   Registrar    in              respect    of declaration under section 89 received by the company.
26CA 2013MGT-7Annual Return.
27CA 2013  MGT-10Changes    in    shareholding                  position                   of promoters and top ten shareholders.
28CA 2013  MGT-14Filing of Resolutions and agreements to the Registrar under section 117.
29CA 2013  MGT-15Form for filing Report on Annual General Meeting.
30CA 2013  AOC-4Form for filing Financial Statement and other documents with the Registrar.
31CA 2013    AOC-4 CFSForm   for   filing   Consolidated            Financial Statements and other documents with the Registrar.
32CA 2013  AOC- 4(XBRL)Form for filing XBRL document in respect of Financial Statement and other documents with the Registrar.
33CA 2013AOC-4 (NBFC) (IND-AS)  Form for filing Financial Statement and other documents with the Registrar for NBFCs.
34CA 2013AOC-4 CFS (NBFC) (IND-AS)Form   for   filing   Consolidated            Financial Statements and other documents with the Registrar for NBFCs.
35CA 2013  AOC-5Notice of address at which books of account are maintained.
36CA 2013  ADT-1Information to the Registrar by company for appointment of auditor.
37CA 2013  ADT-2Application for removal of auditor(s) from his/their office before expiry of term.
38CA 2013ADT-3Notice of Resignation by the Auditor.
39CA 2013  DIR-3CIntimation of Director Identification Number by the company to the Registrar.
40CA 2013DIR-3 KYC/Web form    Application for KYC of Directors.
41CA 2013  DIR-11Notice of resignation of a Director to the Registrar.
42CA 2013    DIR-12Particulars of appointment of Directors and the           Key        Managerial             Personnel        and    the changes among them.
43CA 2013  MR-1Return of appointment of Key Managerial Personnel.
44CA 2013          MR-2Form of Application to the Central Government for approval of appointment or reappointment and remuneration or increase in remuneration or waiver for excess or over payment to managing director or whole time director or manager and commission or remuneration to Directors.
45CA 2013  FC-1  Information to be filed by Foreign Company.
46CA 2013  FC-2Return of alteration in the documents filed for registration by Foreign Company.
47CA 2013    FC-3Annual accounts along with the list of all principal        places                  of          business                  in          India established by Foreign Company.
48CA 2013FC-4Annual Return of a Foreign Company.
49CA 2013NDH-1Return of Statutory Compliances.
50CA 2013NDH-2Application for extension of time.
51CA 2013  NDH-3Return of Nidhi Company for the half year ended.
52CA 2013    NDH-4Application     for    declaration     as                       Nidhi Company and for updation of status by Nidhis.
53CA 2013  MSC-1Application to ROC for obtaining the status of dormant company.
54CA 2013MSC-3Return of dormant companies.
55CA 2013    CRA-2Form of Intimation of appointment of Cost Auditor    by    the    company    to    Central Government.
56CA 2013  CRA-4Form for filing Cost Audit Report with the Central Government.
57CA 2013  BEN-2Return   to   the   Registrar    in              respect    of declaration under section 90.
58CA 2013  GNL-2Form for submission of documents with the Registrar.
59CA 2013      GNL-3Particulars 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.
60CA 2013  IEPF-1Statement of amounts credited to the Investor Education and Protection Fund.
61CA 2013IEPF-2Statement of unclaimed or unpaid amounts.
62CA 2013    IEPF-3Statement of shares and unclaimed or unpaid dividend not transferred to the Investor Education and Protection Fund.
63CA 2013  IEPF-4Statement    of   shares   transferred                   to    the Investor Education and Protection Fund.
64CA 2013  IEPF-5 e- verification reportApplication to the authority for claiming unpaid amounts and shares out of Investor Education and Protection Fund (IEPF)–E- verification report.
65CA 2013    IEPF-6Statement of unclaimed or unpaid amounts to be transferred to the Investor Education and Protection Fund.
66CA 2013  IEPF-7Statement of amounts credited to IEPF on account of shares transferred to the fund.
67LLP    FORM 3Information with regard to Limited Liability Partnership agreement and changes, if any, made therein.
68LLP      FORM 4Notice of appointment, cessation, change in name/ address/designation of a designated partner or partner and consent to become a partner/designated partner.
69LLP  FORM 5  Notice for change of name.
70LLPFORM 8Statement of Account & Solvency.
71LLP  FORM 11Annual     Return     of     Limited                Liability Partnership (LLP)
72LLP  FORM 12Form for intimating other address for service of documents.
73LLP  FORM 15Notice for change of place of registered office.
74LLP    FORM 22Notice of intimation of Order of Court/ Tribunal/CLB/ Central Government to the Registrar.
75LLP    FORM 23Application for direction to Limited Liability Partnership (LLP) to change its name to the Registrar.
76LLP  Form 27 LLPForm   for   registration   of            particulars            by Foreign     Limited     Liability                 Partnership (FLLP)
77LLPForm 29 LLPNotice of (A) alteration in the certificate of incorporation or registration; (B) alteration in names and addresses of any of the persons authorised to accept service on behalf of a foreign  limited  liability partnership (FLLP) (C) alteration in the principal place of business  in  India of FLLP  (D) cessation to have a place of business in India.
78LLP  FORM 31Application for compounding of an offence under the Act.
Source: www.mca.gov.in

What are the forms that CAN’T be filed by a Company under this scheme?

All forms that provide documentary evidence for any actions taken by the company and statement of accounts etc. can be filed with the MCA 21 Registry under this scheme. The following forms cannot be filed by a Company

  • Increase of Authorised Share capital (Form SH-7)
  • Charge forms (Form CHG 1, Form CHG4, Form CHG 8, Form CHG 9 for Creation, Modification & Satisfaction of Charges)

(For instance, Form PAS 3 is not filed by a Company for Allotment of shares and raising funds, then they can file the same without any penalty, this will be exempted from prosecution or proceeding from the Designated Authority. Hence, the Companies Fresh start scheme (CFSS) provides Immunity/relief here.

If the same amount is utilised by the Company without filing Form PAS 3, then prosecution or proceedings relation to utilisation of Money received by the Company without informing the MCA 21 Registry shall be ordered by the Designated Authority

Therefore, any other consequence apart from filing of documents and statement of accounts etc, will not be provided with immunity/relief under this scheme)

Can all Companies apply under this scheme and file the pending forms?

Certain Companies are PROHIBITED from filing the forms under this scheme, they are as mentioned below –

  • Companies against which final notice of Action for Strike off u/s 248 of Companies Act 2013 is already initiated
  • Companies have already filed an application for Strike off u/s 248 of CA2013 with the MCA
  • Companies which have initiated action for Amalgamation under scheme of arrangement or compromise under the Act
  • Companies which have filed application for obtaining Dormant status u/s 455
  • Vanishing Companies

 How will it help Inactive Companies?

Well, Inactive Companies can proceed to file all the Annual returns with MCA 21 Registry with the Nominal fees and later proceed with

  • Applying for Dormant status, if the Company wish to carry on the business on a future date with minimal Annual filings post Dormant status approval
  • Applying for Strike off, if the Company intends not to carry on any business and close the same.

6. What is the procedure to be followed under this scheme?

If Company wants to en-cash the benefits under this scheme then,

  • All the relevant MCA filings applicable to the Company, need to filed with the Nominal fees and ensure compliance as per Companies Act 2013.
  • Post the completion of the above process, the Company has to file e-Form CFSS- Application for issue of Immunity Certificate under the Companies Fresh Start Scheme (CFSS) 2020 after 31st December 2020 but before June 2021 (Form yet to be notified).
  • Receive Immunity Certificate under Companies Fresh Start Scheme CFSS 2020 as an approval from the Designated Authority for completing all the compliance filing with the MCA 21 Registry.

Will Immunity Certificate under Companies Fresh Start Scheme (CFSS) be issued to all Companies ensuring filings under this Scheme?

The following Companies will not be issued Immunity Certificate under Companies Fresh Start Scheme (CFSS) 2020

  • Company matters pending before the Court of Law and in case of management disputes in the Company is pending before the Court of Law or Tribunal
  • Court has order conviction in any matter or an order imposing penalty has been passed by adjudication authority under this Act and no appeal is made before 31st March 2020.

(*Note – Exemption of additional fee for filing forms for reporting the documentation and Statement of accounts etc will be available, only Immunity Certificate Under Companies Fresh Start Scheme CFSS 2020 will not be issued

What is the advantage/effect of Immunity provided in this Scheme?

After granting this Immunity, the Designated Authority shall withdrawn the pending prosecution before any competent court or proceedings of adjudication of penalties u/s 454 of the Companies Act  2013, other than Companies falling in Qt no 7, shall be deemed to have been completed without any further action initiated by the Designated Authority.

What will happen if a Company has received an order passed by the Competent Authority and has failed to make an appeal ?

While the Order has imposed penalties with respect to filing of any documents, statement of accounts etc, as per the MCA 21 registry and no appeal has been made as on the 01st April 2020, then

  • The last date to file an appeal against order falls in between 01 March 2020 and 31st May 2020 (both days included), a period of 120 additional days will be provided to all such Companies and their officers to file the appeal before the Concerned Regional Directors
  • If the order relates to filing of documents, statement of accounts, with the MCA 21 Registry, prosecution for the same shall not be initiated against the Company or its officers, provided the Company follow the CFSS scheme protocol and completes all the filings.

Note – DIN holders of DINs marked as ‘Deactivated’ due to non-filing of DIR-3KYC/DIR-3 KYC-Web and those Companies whose compliance status has been marked as “ACTIVE non-compliant” due to non-filing of Active Company Tagging Identities and Verification(ACTIVE) eform are encouraged to become compliant once again in pursuance of the General Circular No. 11 dated 24th March, 2020 & General Circular No.12 dated 30th March 2020 and file DIR-3KYC/DIR-3KYC-Web/ACTIVE as the case may be between 1st April, 2020 to 30th September, 2020 without any filing fee of INR 5000/INR 10000 respectively.

Official Notification : http://www.mca.gov.in/Ministry/pdf/Circular12_30032020.pdf

Also Read:

Active Company Tagging Identities and Verification (ACTIVE) Under Companies Act

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