MCA Fresh Start Scheme
Notification of MCA:
In
line with its circular dated March 24, 2020, MCA has introduced Companies Fresh
Start Scheme, 2020 (“Scheme”) vide circular no 12/2020 dated March 3,
2020 under Section 460 of the Companies Act, 2013 (“Act”) read with
Section 403. The salient features of the Scheme are given below.
Which companies can take benefit of the Scheme?
Any
company which has defaulted in filing any document, return, statement, etc.
with MCA21 registry are eligible (“Eligible Company”) to participate in
the Scheme except the following:
- Companies for
striking-off the name has been initiated under Section 248 of the Act;
(Section 560 of the CA,1956)
- Companies which have already filed application for
striking-off name under Section 248 of the Act;
- Companies which have been amalgamated under scheme
of arrangement or compromise;
- Companies which have filed application for obtaining
status of ‘dormant company’ under section 455 of the Act;
- Vanishing companies;
Purpose of the Scheme?
Any Eligible Company can
file any form, statement or return etc., which was required to be filed under
the Act but the Company has defaulted in filing the said form, return etc. Such
belated forms can be filed on payment of normal fees as prescribed under the
Companies (Registration Offices and Fees) Rules, 2014. No additional fee shall
be payable. Thus, filing related defaults can be made good irrespective of duration
of default.
Duration?
April 01, 2020 to
September 30, 2020
Belated filings under C. A., 1956 are covered or Not?
Yes, belated filings under the Companies Act,
1956, can also be filed under the Scheme
What forms, returns etc., can be filed under the Scheme?
All forms including
annual forms like AOC-4, MGT-7 can be filed under the Scheme.
The following forms,
however cannot be filed:
SH-7 (only for increase of authorized capital)
Charge related Forms (CHG-1, CHG-4, CHG-8 and CHG-9)
Benefits of Scheme
Exemption
from payment of any additional fees;
Immunity
from prosecution to the extent of default connected with non-filing of form;
and
Immunity
from proceedings related to adjudication of penalty under Section 454.
For example, immunity
against non-filing of form AOC-4 under Section 137, can be availed under the
Scheme by filing the Form but immunity from consequential defaults arising on
account of default like misappropriation of funds in the financial statements, will not be got immunity.
Circumstances under which immunity is not available under the Scheme?
An Eligible Company
cannot avail any immunity under the Scheme in the following cases:
1. Where any appeal in respect of matter for which immunity is being sought, is pending before any court of law;2. Where any management dispute is pending before any court of law or tribunal;3. Where the court has ordered conviction in the matter and no appeal has been filed, before coming into force of this Scheme; and4. Where penalty has been adjudicated under Section 454 of the Act and no appeal has been filed, before coming into force of this Scheme.
Whether benefit can be availed under the Scheme if prosecution for non-filing or proceeding of adjudication of penalties has already been initiated under the Act?
Yes. After the requisite
belated forms, statements, returns etc., have been filed under the Scheme, the
Eligible Company, after the belated filing has been taken on record, shall file
a Form CFSS-2020 within 6 months of closure of the Scheme without payment of
any fees. Based on the aforesaid filing, a certificate of immunity will be
issued to the Eligible Company.
Once the immunity
certificate has been issued, the authorities will withdraw the following:
- Prosecution (if any) pending before concerned court;
and
- Proceedings (if any) initiated under Section 454 of
the Act for adjudication of penalties.
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DISCLAIMER: The information given in this document has been made on the basis of the provisions stated in the Notification. It is based on the analysis and interpretation of applicable laws as on date. Under no circumstances whatsoever, the blogger shall not be responsible for any loss, claim, liability, damage(s) resulting from the use, omission or inability to use the information provided in the document.
By
CS Diwakar Agrawal
Mob: +91-9911746549
