Quick Questions Company Law Fresh Start Scheme- 2020



Quick Questions
Company Law Fresh Start
Scheme- 2020
(Step Towards ‘Compliance”)
Short Summary:
A step by MCA to allow corporates to make a “Fresh Start”. A circular issued by MCA on 30.03.2020 for the benefit of all Companies.

This Scheme Shall be start from 01st April, 2020 and end on 30th September, 2020.


At the time of situation of pandemic in the country, Ministry of Corporate Affairs  offers a opportunity to all the defaulting companies to start fresh and made good all his defaults in filling of documents, returns without levy of any additional fees and also made them free from prosecution related to non filling of the same vide its Circular No. 11/2020 dated March 24, 2020 by introducing Company Fresh Start Scheme, 2020{CFSS-2020}.

Q1. Who can avail this Company Fresh Start Scheme,2020.
 A1. Any defaulting company which had made a default in filling of Any Document or any statement or Any Return including statutory annual forms that need to be filed in accordance with provisions stated under Companies Act 1956 or Companies Act, 2013.
Q2. Which types of companies are covered under this CFSS, 2020.
A2. Every company including Foreign companies like those companies having Branch or Liasion office in India
Q3. What is the duration of CFSS, 2020.
A3. CFSS, 2020 will be started from April 01, 2020 to September 30,2020.
Q4. What is the duration of LLP Settlement Scheme, 2020.              
A4. LLP Settlement Scheme, 2020 will be started from April 1, 2020 to August 31, 2020.
Q5. What is the purpose of introduction of CFSS,2020.
A5. Purpose of this scheme is to provide defaulting companies a chance to make good of their default by complete their pending filing without levy of any additional fees.
Q6. Is this CFSS,2020 waive off the requirement to condone their delay.
A6. No. This scheme waive off only the requirement of paying additional fees but it will not wave off any requirement prescribed in law. 
Q7. In this CFSS, 2020 defaulting companies made their default good that can also be resulted into removal of disqualification of director.         
A7. No, removal of director is act of operation of law, disqualification will remain intact even after defaulting company file their pending returns.
Q8. What are the certain conditions under which CFSS, 2020 shall not be applicable?    
A8. a. Companies for which the final notice of strike off has been initiated u/s 248;
       b. The company has filed an application for striking off;
       c. Companies which been amalgamated;
      d. Application has been made for obtaining dormant status u/s 455;
     e. Vanishing companies;
     f. E-Form SH-7 only in case of increase in authorized share capital;
    g. E- Forms CHG-1, CHG-4, CHG-8 and CHG- 9 for creation and satisfaction of
        charges;
    h. Any appeals pending in cases of management disputes;
    i. Cases where any prosecution/penalty has been ordered and no appeal has been    
        made before the introduction of CFSS.
Q9. Is this CFSS, 2020 applicable for Inactive Companies.
A9. No, this scheme is applicable on Inactive Companies by filling pending returns they can apply for:
a. Apply for the Dormant status of company vide e-form MSC-1
b. Apply for striking of the name of company vide e-form STK-2
Q10. Whether Strike off Company can take benefit of this scheme?                          
A10. If Strike off Company wants to take benefit of CFSS then such company first have to revive such company from NCLT and then can apply for CFSS for pending filing of forms.
Q11. If all directors of Active Company are disqualified due to default done by any other company in which he was holding directorship. How can these types of companies avail this CFSS, 2020?
A11. These companies need to appoint one director from Backend Route provided by ROC and afterwards complete all their pending filing and file e-form CFSS.
Q12. When can the benefit of the Scheme be availed?
A12. . The benefit of the Scheme can be availed only after filing of the following forms:
       a. Form DIR 3 KYC/ DIR 3 KYC web:
          It is compulsory to file by all the existing directors of Defaulting Companies  
          before availing the benefit of the said Scheme.
      b. Active Form INC 22A.
          Only those Companies whose status is Active Complaint will be able to seek   
          the benefit of the Scheme.
This scheme also allows to file DIR 3 KYC and INC 22A Active form without paying
any additional fees.
Q13. Is this scheme is applicable on all forms.
A13. This scheme shall be applicable on All The Forms Except:
          - SH-7 for increase in authorized capital
          - Charge related form (CHG-1, CHG-4, CHG-8 or CHG-9)
Q14. What is the procedure to avail this CFSS,2020
A14. Companies who wish to avail this scheme firstly, complete all their pending filling till September 30, 2020 and afterwards within the period of 6 months file e-form CFSS by mentioning all SRN of filed forms during that period to apply for the immunity certificate in respect of documents filed under this scheme.
Q15. What can be done in case of those companies where adjudicating order was passed but no appeal was not filed against that order. How these companies avail the benefit of this CFSS,2020.
A15. If no appeal is filed against the order of adjudicating authority till the date of commencement of the scheme following can be done:
If last date for filling an appeal falls between the period March 01, 2020 to May 31, 2020 (both days included) additional 120 days period shall be allowed and till that extension period, No prosecution shall be initiated against such companies or officers for non compliance of order as per Section 454(8) of Companies Act, 2013.
Q16. What shall be the effect of CFSS, 2020 towards that defaulting company who had availed this scheme?
A16. a. ROC shall withdraw appeal against any prosecution filed against the Company.
b. ROC shall withdraw the proceedings of adjudication of penalties.
Q17.  What are the circumstances under which Immunity shall not be applicable?
A17. a. Where appeal is pending before any court.
b. Where any management dispute is pending before any court.
c. Order of conviction has been issued and no appeal has been preferred against such order before this scheme come into force i.e. April 1, 2020
d. Order imposing penalty has been made by Adjudicating Authority and no appeal has been preferred against such order before this scheme come into force i.e. April 1, 2020
Q18. If appeal is filed against any prosecution launched or proceeding for penalties imposed are initiated. How these companies will be able to avail CFSS, 2020
A18. If defaulting company or its officer in default  with respect to statutory filling under the Act has filed an appeal against any notice issued or complaint filed or order passed by court or adjudicating authority in respect of which application is made under this scheme. Applicant shall before filling application for issue of immunity certificate vide e-form CFSS withdraw the appeal and furnish proof of such withdrawal along with the application.

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