The MCA vide its circular dated 30th March 2020 has issued Companies Fresh Start Scheme, 2020 to promote defaulting companies to make a fresh start on a clean slate and waive the additional fee as charged under section 403 of Companies Act, 2013 which is applicable on certain forms to be filed with MCA.

The CFSS 2020 scheme will remain effective from 1st April 2020 to 30th September 2020.

The scheme provides a one-time opportunity to file all the pending documents including the annual filing of the company without charging higher additional fees on any delay.

It also provides immunity to companies in relation to prosecution or proceeding for imposing an additional penalty for not filing of belated documents. However, it doesn’t provide immunity on any other consequential proceedings including proceeding involving the interest of its directors or key managerial personnel etc.

If the company had appeal against any order of prosecution for penalty passed by the competent court or adjudicating authority, then the company first need to withdraw his application of appeal and furnish the proof of withdrawal to avail immunity in this CFSS 2020 scheme.

The competent court or adjudicating authority passed an order to prosecute and company or officer didn’t file the appeal before the appellate authority or regional director under section 454(6) of the companies act, 2013 as on commencement of this Scheme then the following will apply:

• The Company or officers will be allowed 120 days to file an appeal before the regional director if the last date of filing appeal falls between 1st March 2020 to 31st May 2020, and
• No prosecution will be initiated against the Company or officers for non-compliance of adjudicating authority order under section 454(8) of the companies act, 2013.

The company or officer need to file electronically E-form “CFSS-2020” without any fees with ROCs through MCA portal to avail immunity under this scheme after closure of this scheme & after ROCs approves or take on file all documents but not after the expiry of 6 months from the closure of this scheme EXCEPT

• No immunity for any appeal pending in the court against the company management disputes and in any other matter;
• No immunity for any case where conviction ordered passed by a court or adjudicating authority & no appeal was preferred by the company or officers before the scheme came in enforce.

Non Applicability of Companies Fresh Start Scheme, 2020 (CFSS-2020)-

• To Companies against which final notice for striking off the name of the company under section 248 of the companies act, 2013 already initiated by the ROCs;
• The company made an application for striking off the name of the company from ROCs;
• Companies amalgamated under the scheme of compromise & arrangement;
• The company applied for dormant status under section 455 of the companies act, 2013 before the scheme introduction
• Vanishing Companies;
• Documents related to Increase in authorised share capital (Form SH-7);
• Charge related documents (CHG-1, CHG-4, CHG-8 & CHG-9).

Scheme for Inactive Companies – The defaulting inactive companies applied for the CFSS-2020 for filing due documents, can also simultaneously apply for the following actions: –

• Application for dormant status under section 455 of the companies act, 2013 by filing MSC-1 to ROCs with nominal fees;
• Application for striking off the name of the company from ROCs.

The said Circular can be accessed through the following link: MCA_Circular 12_30.03.2020_CFSS 2020