As the whole world is fighting against pandemic Covid19, and as in last few years Ministry has received requests from various stakeholder to provide a grant to fulfil necessary pending compliance with ministry without being subject to higher penalties on account of any delay.
The scheme "Company Fresh Start Scheme 2020" is launched to provide a relaxation to file the pending compliance without penalty of certain filings delayed by the companies.
Who is eligible to avail the fresh start scheme 2020
Those Companies who have failed to file the mandatory ROC compliance in past years are eligible to avail the scheme benefit and can file the returns now without being subject to penalty. The aim of the scheme is to grant a chance to defaulting companies to make their company compliant with Ministry.
Defaulting Company means a company who has failed in the filing of any return, any of statement or any of document including annual statuary document.
This scheme does not provide this grant to “officer in default”.
Companies have a chance to file their pending compliance till 30th September 2020.
The scheme does not provide any other immunity for any default other than annual filing related default.
Following forms can be filed under the fresh start scheme:
Annual Return- MGT-7
Financial statement- AOC-4
Following forms are not eligible to proceed under the scheme
SH-7- Increase in Authorized Capital, (CHG-1, CHG-4, CHG-8 or CHG-9)
The scheme is available for Inactive companies also; Inactive company is defined by act “A Company not been carrying any business or operations in last two years.
However, the following cases are not eligible to avail the benefit of Fresh Start Scheme.
If ROC has already under section 248 of companies act 2013 issued a final notice for striking off the name of company.
If the company has filed the form for striking off voluntary.
If Company has been amalgamated under the scheme of compromise & arrangement;
If the status of the company is dormant under section 455 of the companies act 2013.
And a vanishing company: A company who failed to file the returns with a stock exchange for two constant years, bot maintain its registered office of the company as notified to ROC or stock exchange, or directors are not traceable.
As per the scheme, If any company, failed to file INC-22 Active Form, is also allowed to file INC-22 Form without penalty to proceed further filings.
Further, the scheme provides relaxation to directors also for getting their DIN activated through this scheme. Directors with the status of DIN deactivated may also file DIR-3KYC/DIR-3KYC-Web within the tenure of the Scheme without being subject to penalty.
In the following cases, CFSS 2020 scheme does not provide waive off of prosecution/penalty.
Court’s judgement is pending on appeal’s matter.
Court’s judgement is pending on the matter of management dispute
Where the court’s final judgement has been issued and no further appealing shall be entertained against the order as on 1st April 2020
Where the court has given the final judgement on imposing penalty and no further appealing shall be entertained against the order as on 1st April 2020.
Following are the effect of Company Fresh Start Scheme
All penalty and an additional fee are waived off on all returns during the period of CFSS.
Immunity Certificate shall be given to the company by Authority.
Company shall apply for withdrawing for the appeal made against any prosecution launched.
Pending prosecution against such forms /returns shall be withdrawn by ROC
Proceedings of adjudication of penalties u/s 454 shall be withdrawn by ROC
Consequences If the compliances are not filed under the CFSS scheme
The penalty shall be imposed on the forms as normal fee
If the filings are pending from constant years ROC may strike off the company
Directors/Officers in default may be liable for prosecution/heavy penalty