Defaulting companies to file their pending returns without the payment of late fees

Sub: Companies Fresh Start Scheme 2020

The Corporate Affairs Ministry (MCA) has come up with the ‘Companies Fresh Start Scheme 2020’ to enable companies make good of any filing-related defaults, irrespective of duration of default, and make a fresh start as a fully compliant entity.

The scheme is a one-time waiver of additional filing fees for delayed filings by the companies or LLPs with the Registrar of Companies during the tenure of the scheme, i.e. during the period starting from April 1 and ending on September 30.

The Schemes, apart from giving longer timelines for corporates to comply with various filing requirements under the Companies Act 2013 and LLP Act, 2008, significantly reduce the related financial burden on them, especially for those with long standing defaults, thereby giving them an opportunity to make a “Fresh Start.”

However, the immunity is only against delayed filings in MCA 21 and not against any substantive violation of law.

1. OBJECTIVE OF THE SCHEME:

The Scheme provides an opportunity to the Companies to make their default good by filing their Annual Returns, Financial Statements and all the other necessary forms, documents and statements that are specified, within that particular time frame as provided under the scheme. Non – compliance of the same results in the imposition of penalties.

1. TENURE OF THE SCHEME:

The scheme came into force on 01.04.2020 and shall remain in force till 30.09.2020.

1. APPLICABILITY OF THE SCHEME:

The scheme shall be applicable on all ‘defaulting Companies’ who has failed to file their Annual returns, Financial statements and other statutory Compliances and which are due for filing till date.

1. NON-APPLICABILITY OF THE SCHEME:

1. a) Cases where notice for strike off has been made under section 248 of the Companies Act 2013 and action has been initiated against them. b) Where any application for Strike off has been made by the Company itself. c) Amalgamated Companies d) Where the Company has received a status of Dormant Company under section 455 of the Companies Act. e) Vanishing Companies f) Increase in Authorized Share Capital forms and Charge forms.

1. IMMUNITY GRANTED TO THE DEFAULTING COMPANIES:

Every defaulting Company shall be required to pay the normal fees as prescribed under Companies (Registration Offices and Fees) Rule 2014 on the date of filing of each belated document and no additional fee shall be payable. 

1. SCOPE OF IMMUNITY GRANTED BY THE SCHEME:

Scope shall be granted from launch of any prosecution or proceedings till the extent that such prosecution or proceedings is limited to non-filing of the documents. No Immunity shall be granted in case where any matter is pending before the Court of law in case of management disputes.

1. IMMUNITY CERTIFICATE HOW GRANTED?

The Application for seeking the Immunity certificate shall be made after filing of belated documents under the scheme and such documents are taken on record or approved by the Officer.

1. TIME PERIOD FOR IMMUNITY CERTIFICATE:

 Before the expiry of six months from the closure of the Scheme.

1. FEES FOR IMMUNITY CERTIFICATE?

No fees shall be levied on filing of this form.

1. WITHDRAWAL OF APPEAL IN ORDER TO GET THE IMMUNITY CERTIFICATE:

Where the defaulting Company or any of its officer has filed any appeal before a competent Court against any notice issued by any adjudicating authority in respect of statutory filings under Companies Act 2013 or Companies Act 1956, then the Company or the officer in default shall withdraw such appeal and furnish a proof in relation to the same.

1. NO APPEAL NO IMMUNITY:

The Immunity shall not be granted to the Companies Where no Appeal has been made against the order of penalty or conviction before this scheme came to force.

1. CASES WHERE ORDER HAS BEEN PASSED BY THE ADJUDICATING AUTHORITY BUT NO APPEAL HAS BEEN MADE:

Cases where any penalties, fine has been imposed by the Adjudicating Authority against the delay associated with regards to non-filing of document on the MCA portal, and no appeal has been preferred or filed by the Company or any of its officer before the Regional Director under section 454(6) the Company shall have two options:

OPTION 1: Where the last date for filing an appeal before the Regional Director against the order  of the Adjudicating Authority under section 454(6) falls between 1st March 2020 to 31st May 2020(both days included), a period of additional 120 days shall be allowed after the expiry of the last date to all the Companies to file an Appeal before Regional Director.

OPTION 2: During such additional period as stated above, the order of the Adjudicating Authority in so far as it relates to delay associated in filing of the Documents, returns, statements etc shall not be initiated against the Company.

1. EFFECT OF IMMUNITY:

Once the immunity has been granted the designated Authority shall withdraw all its pending prosecutions if any before the Concerned Court or any proceedings for adjudication of penalties under section 454 in so far such it relates to non-filing of documents if any.

1. SCHEME FOR DEFAULTING INACTIVE COMPANIES:

The Defaulting Inactive Companies while filing documents under CFSS-2020 can apply to get the status of the Dormant Company under section 455 by filing e form MSC 1 at normal fees.

After the Conclusion of the said scheme the Concerned Authority shall take necessary action against the defaulting Companies.

AUTHOR CS GAURAV ARORA

 Company Name: AT8 ACCOUNTING PVT LTD

Company Website: www.at8accounting.com

Email: contact@at8accounting.com & at8acounting@gmail.com

Contact: +918872066332