31-Mar-2020 Companies Fresh Start Scheme, 2020 and LLP Settlement Scheme, 2020 through Form CFSS, 2020.

The Ministry of Corporate Affairs has introduced a golden opportunity to all the Companies and Limited Liability Partnerships (LLPs) by providing relief with introduction of ‘Companies Fresh Start Scheme, 2020’ and ‘LLP Settlement Scheme, 2020 respectively.’ Companies and LLPs are given One-time opportunity to make good of their defaults by complying with their pending forms without payment of any Additional Fees for delayed filings.

 

Ø  PURPOSE

MCA has introduced this scheme for the Companies to facilitate them to make a fresh start on a clean slate and to take certain alleviative measures for the benefit of all companies

 

Ø  TIME PERIOD OF THE SCHEME:

The Scheme shall begin from 1st April, 2020 till 30th September, 2020.

 

Ø  APPLICATION TO AVAIL IMMUNITY UNDER THE SCHEME:

The application for seeking immunity in respect of belated documents filed under the Scheme shall be made electronically in the Form CFSS-2020 after the closure of the Scheme and after the documents are taken on file or approved by relevant authority, but not after expiry of six months from the date of closure of the Scheme. No fee shall be payable on this Form.

 

COMPANIES FRESH START SCHEME, 2020:

 

 

Ø  APPLICABILITY:

This Scheme is applicable to all the Companies viz:

1.      Private Limited Companies

2.      Public Limited Companies listed on Stock Exchange

3.      Unlisted Public Companies

4.      Government Companies

5.      One Person Companies; etc

That has failed to comply with filing of any Statutory Forms previously with the Ministry of Corporate Affairs.

 

In addition, this scheme allows Inactive Companies to get their Companies declared as “Dormant Company” by filing an application at a normal fee. It enables Inactive Companies to remain on the register of the Companies with minimal compliance requirements.

 

Ø  NON APPLICABILITY OF THE SCHEME:

This scheme shall not apply to:

1.      Companies under the process of Strike – Off

2.      Amalgamated Companies

3.      Companies that have applied for becoming Dormant

4.      Vanishing Companies

5.      Companies under CIRP

6.      Companies defaulting in filing Form SH-7 (for increase in Authorized Capital)

7.      Companies that have defaulted in filing Charge related forms (i.e. Form CHG-1, CHG-4, CHG-8, CHG-9)

 

Ø  RELIEF:

1.   Every defaulting company can file its pending forms upon payment of normal fees and no additional fee shall be payable on the same.

2.   No launch of prosecution or proceedings for imposition of penalty on defaulting companies if the default pertain to delay in filing of forms.

3.   In case any appeal is filed by the defaulting company with respect to notice issued /compliant filed/order passed by court or any competent authority, then also, the Company can apply under the scheme upon withdrawal of appeal.

 

LLP Settlement Scheme, 2020

 

Ø  APPLICABILITY:

All defaulting LLPs that have not filed below mentioned forms within due period can avail benefit of this scheme for filing the same under the Scheme:

1.     Form-3- Information with regard to limited liability partnership agreement and changes, if any, made therein

2.     Form-4- Notice of appointment, cessation, change in name/ address/ designation of a designated partner or partner and consent to become a partner/ designated partner

3.     Form-8 – Statement of Account & Solvency (Annual or Interim)

4.     Form-11 – Annual Return of LLP

 

Ø  NON APPLICABILITY OF THE SCHEME:

1.      Application of forms other than those stated above cannot be made under LLP Settlement Scheme, 2020.

2.      LLPs which have made an application for striking off its name by filing Form 24 with MCA.

 

Ø  RELIEF:

The defaulting LLPs applying under the Scheme can file their pending forms upon payment of Normal Fees applicable to them along with Additional Fees of Rs. 10/- per day for the period of delay upto maximum of Rs. 5,000/-

Author:

Ruchi Mehta 

Senior Associate

Secretarial Department

Please feel free to write to us on info@apmh.in / ruchi@apmh.in/amita@apmh.in for any further queries on the above blog.