{"id":6040,"date":"2020-04-03T16:42:42","date_gmt":"2020-04-03T11:12:42","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=6040"},"modified":"2022-09-10T14:13:19","modified_gmt":"2022-09-10T08:43:19","slug":"companies-fresh-start-scheme-2020-cfss-2020","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/companies-fresh-start-scheme-2020-cfss-2020\/","title":{"rendered":"Companies Fresh Start Scheme, 2020 &#8211; (CFSS 2020)"},"content":{"rendered":"\n<p class=\"has-drop-cap\"><strong><em>As Government of India has released several measures granting relaxation to businesses to combat <\/em><\/strong><em><a href=\"https:\/\/corpbiz.io\/learning\/covid-19-outbreak-sebi-relaxes-compliance-requirements-for-companies\/\"><strong>COVID-19 Outbreak<\/strong><\/a><\/em><strong><em>, the Ministry of Corporate Affairs (MCA) has also come up with specific measures for Companies and LLP\u2019s.<\/em><\/strong><\/p>\n\n\n\n<p><em>Ministry of Corporate Affairs (MCA) has recently introduced \u201c<strong>Companies Fresh Start Scheme 2020 (CFSS 2020), notified vide circular 12\/2020 dated 30<sup>th<\/sup> March 2020&nbsp; <\/strong><\/em><\/p>\n\n\n\n<p>Many Entrepreneurs who set up companies for business ventures,\nand did not commence operations because of their various genuine economic\nreasons and fail to ensure the necessary statutory filings, resulted in huge\npenalties, which created a heavy burden for the stakeholders and were added to\nthe number of defaulting companies. This is a very good opportunity for such\ncompanies; Stakeholders can take advantage and can do a fresh start and make it\na Compliant Company.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/companies-fresh-start-scheme-2020-cfss-2020\/#What_was_the_Purpose_of_Companies_Fresh_Start_Scheme_2020\" >What\nwas the Purpose of Companies Fresh Start Scheme 2020?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/companies-fresh-start-scheme-2020-cfss-2020\/#Applicability_of_Companies_Fresh_Start_Scheme_2020\" >Applicability\nof Companies Fresh Start Scheme, 2020<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/companies-fresh-start-scheme-2020-cfss-2020\/#Non-_Applicability_Companies_Fresh_Start_Scheme_2020\" >Non- Applicability Companies Fresh Start Scheme, 2020&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/companies-fresh-start-scheme-2020-cfss-2020\/#What_will_be_the_effect_of_this_Scheme\" >What will be the effect of this Scheme?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/companies-fresh-start-scheme-2020-cfss-2020\/#Manner_of_Payment_of_Fees\" >Manner of Payment of Fees<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/companies-fresh-start-scheme-2020-cfss-2020\/#Application_for_the_issue_of_immunity_in_respect_of_documents_filed_under_the_Scheme\" >Application for the issue of immunity\nin respect of documents filed under the Scheme<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/corpbiz.io\/learning\/companies-fresh-start-scheme-2020-cfss-2020\/#Order_by_the_designated_authority_granting_immunity_from_penalty_and_Prosecution\" >Order by the designated authority\ngranting immunity from penalty and Prosecution<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/corpbiz.io\/learning\/companies-fresh-start-scheme-2020-cfss-2020\/#Scheme_for_the_Inactive_Companies\" >Scheme for the Inactive Companies<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/corpbiz.io\/learning\/companies-fresh-start-scheme-2020-cfss-2020\/#After_the_Conclusion_of_this_Scheme\" >After the Conclusion of this Scheme<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/corpbiz.io\/learning\/companies-fresh-start-scheme-2020-cfss-2020\/#Take_Away\" >Take Away<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_was_the_Purpose_of_Companies_Fresh_Start_Scheme_2020\"><\/span><strong>What\nwas the Purpose of Companies Fresh Start Scheme 2020?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>This Scheme will enable\ncompanies to make good of any filing-related defaults, irrespective of their\nduration of the default, and to make a <strong>fresh\nstart as a fully compliant entity<\/strong>.<\/li><li>This Scheme will help to <strong>incentivize\ncompliance and reduce compliance burden<\/strong> during the unprecedented public\nhealth situation caused by&nbsp;<strong>COVID-19<\/strong>.\u201d<\/li><li>\u201cThe schemes, apart from giving longer timelines for corporates\nto comply with various filing requirements under the Companies Act 2013,\nsignificantly reduce the related financial burden on them, especially for those\nwith long-standing defaults, thereby allowing them to make a &#8220;fresh\nstart.&#8221;<\/li><li>This Scheme was introduced by the request of various stakeholders. <\/li><\/ul>\n\n\n\n<div class=\"shadow1\">To provide a similar facility to Limited Liability Partnerships (LLPs), the MCA has also revised the &#8216;LLP Settlement Scheme, 2020.&#8217;<\/div>\n\n\n\n<p><strong><em>This move is now Aimed to Bring Non-Compliant Companies and LLPs to the Legal fold<\/em><\/strong><\/p>\n\n\n\n<ul><li><em>This Scheme will provide a one-time relaxation in an additional fee for the defaulting Companies and LLPs.<\/em><\/li><li><em>Companies and LLPs are now given 6 months to complete filings that were due. <\/em><\/li><li><em>It shall start from 01<sup>st<\/sup> April 2020 till 30<sup>th<\/sup> September 2020,<\/em><\/li><li><em>This window provides an opportunity for firms to complete long-standing compliances, besides providing them additional time to complete filings that are falling due.<\/em><\/li><li><em>In the case of businesses with long-standing defaults, the schemes are likely to be a significant relief.<\/em><\/li><li><em>It will allow companies to make a fresh start<\/em>,<em> to lower compliance burden.<\/em><\/li><li><em>After compliance, ROC will issue an immunity certificate.<\/em><\/li><li><em>the immunity is only with delayed filings on&nbsp; MCA 21 (the online portal for making statutory filings) and not across any substantive violation of the law, <\/em><\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Applicability_of_Companies_Fresh_Start_Scheme_2020\"><\/span><strong>Applicability\nof Companies Fresh Start Scheme, 2020<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>CFSS 2020 is applicable to\ndefaulting Companies.<\/p>\n\n\n\n<div class=\"shadow1\">\u201cDefaulting Company\u201d:\nDefaulting Company means a Company defined under Companies Act, 2013 and whichhas made a default in filing of any document\u2019s, statement, returns, etc.including annual statutory reports on the MCA-21 registry;<\/div>\n\n\n\n<p>Any &#8220;defaulting Company&#8221; is permitted to the belated\nfile documents, which were due for filing on a given date in accordance with\nthe provisions of the Scheme.<\/p>\n\n\n\n<p><strong>The scheme SCFSS, 2020 (Scheme fresh start scheme) will apply\nwith filing only with the following Specified Forms;<\/strong><\/p>\n\n\n\n<ul><li>Annual Return (MGT-7)<\/li><li>Financial Statement (AOC-4)<\/li><li>PAS-3(Return of Allotment)<\/li><li>MGT-14(Filing Resolutions and Agreements with the Registrar)<\/li><li>ADT-1(Appointment of Auditor)<\/li><li>INC-20A (Declaration for the commencement of business)<\/li><li>INC-22A (Active Company)<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Non-_Applicability_Companies_Fresh_Start_Scheme_2020\"><\/span><strong>Non- Applicability Companies Fresh Start Scheme, 2020&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong>CFSS,2020 (Scheme fresh start\nscheme, 2020) shall not apply;<\/strong><\/p>\n\n\n\n<ul><li>To the companies against which the <strong>Designated Authority has already initiated the action with final notice for striking off<\/strong> for the name u\/s 248 of the Act;&nbsp;&nbsp; <\/li><li>Where the companies have already <strong>applied to the operation of striking off the name<\/strong> of the Company from the registrar of companies; <\/li><li>to companies which <strong>have amalgamated under a scheme of arrangement or compromise<\/strong> under the Act;<\/li><li>Where <strong>the applications have already been filed for obtaining Dormant Status<\/strong> under Section 455 of the Act before this Scheme;<\/li><li>to vanishing companies;<\/li><li>Where there is an Increase in Authorized Capital <strong>(Form SH-7)<\/strong><\/li><li>Charge related documents <strong>(CH-1, CH-4, CH-8, and CH-9)<\/strong><\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_will_be_the_effect_of_this_Scheme\"><\/span><strong>What will be the effect of this Scheme?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" width=\"564\" height=\"334\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/04\/image-12.png\" alt=\"Effect of Scheme, 2020\" class=\"wp-image-6041\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/04\/image-12.png 564w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/04\/image-12-300x178.png 300w\" sizes=\"(max-width: 564px) 100vw, 564px\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Manner_of_Payment_of_Fees\"><\/span><strong>Manner of Payment of Fees<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Every defaulting Company will be required to pay normal fees as\nprescribed under the Companies (Registration offices and fees) Rule,2014, on\nthe date of filing of each belated documents, <strong>no additional fees shall be payable<\/strong><strong>.<\/strong><strong><\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Application_for_the_issue_of_immunity_in_respect_of_documents_filed_under_the_Scheme\"><\/span><strong>Application for the issue of immunity\nin respect of documents filed under the Scheme<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Application for the issue of immunity\nshall be made electronically in FORM CFSS-2020. Documents will be taken into\nthe record by the Designated authority as the case may be.<\/p>\n\n\n\n<ul><li><strong>No fee shall be payable\nfor this form.<\/strong><\/li><li>Immunity\nwill <strong>not be applicable in the matter of pending appeal<\/strong> before the court\nof law.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Order_by_the_designated_authority_granting_immunity_from_penalty_and_Prosecution\"><\/span><strong>Order by the designated authority\ngranting immunity from penalty and Prosecution<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>Based on the declaration made in form CFSS, 2020 <strong>immunity certificate in respect of\ndocuments <\/strong>Based on the filed under this Scheme shall be issued by the\ndesignated authority.<strong><\/strong><\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Scheme_for_the_Inactive_Companies\"><\/span><strong>Scheme for the Inactive Companies<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The defaulting inactive companies\nwhile filing the due documents under this Scheme can also;<\/p>\n\n\n\n<ul><li>Apply to get themselves to be declared as <strong><a href=\"https:\/\/corpbiz.io\/learning\/change-in-status-of-company-from-active-to-dormant\/\"><\/a><\/strong><a href=\"https:\/\/corpbiz.io\/learning\/change-in-status-of-company-from-active-to-dormant\/\"><strong>Dormant Company<\/strong> <\/a>by filing form MSC-1 under section 455 of the <em><strong>Companies Act, 2013<\/strong><\/em><sup><a href=\"https:\/\/www.mca.gov.in\/content\/mca\/global\/en\/acts-rules\/ebooks.html\"><strong>[1]<\/strong><\/a><\/sup><strong> <\/strong> at a normal fee on the said form; or<\/li><li>Apply for <strong>Striking off the name<\/strong> of the Company by filing form STK-2, by a paying fee as applicable on Form STK-2<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"After_the_Conclusion_of_this_Scheme\"><\/span><strong>After the Conclusion of this Scheme<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>After the Conclusion of this Scheme,\nthe Designated Authority shall <strong>take necessary action for the Companies who\nhave not availed the benefit<\/strong> of this Scheme and are default in filing the\ndocuments on time. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Take_Away\"><\/span><strong>Take Away<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The move was an excellent step for the Companies Act and the LLP Act, with one time wavier of additional fees on specified forms, adding that the length of time given under the Scheme implies that firms would have &#8220;time even after the lockdown opens, to look at it comprehensively and apply for the fresh start scheme.&#8221;<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/covid-19-outbreak-sebi-relaxes-compliance-requirements-for-companies\/\">Covid-19 Outbreak: SEBI Relaxes Compliance Requirements for Companies<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>As Government of India has released several measures granting relaxation to businesses to combat COVID-19 Outbreak, the Ministry of Corporate Affairs (MCA) has also come up with specific measures for Companies and LLP\u2019s. Ministry of Corporate Affairs (MCA) has recently introduced \u201cCompanies Fresh Start Scheme 2020 (CFSS 2020), notified vide circular 12\/2020 dated 30th March [&hellip;]<\/p>\n","protected":false},"author":14,"featured_media":6044,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[153],"tags":[453],"acf":{"service_id":"215"},"authorName":"Priya Tirthani","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/02\/Priya-Tirthani.jpg","authorDescription":"Ms. Priya Tirthani is a Company Secretary working as a Senior Consultant in Corpbiz.She is having 4 years of Post Qualification Experience in Compliance and Audit.","postViews":5848,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/6040"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/14"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=6040"}],"version-history":[{"count":17,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/6040\/revisions"}],"predecessor-version":[{"id":48584,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/6040\/revisions\/48584"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/6044"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=6040"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=6040"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=6040"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}