{"id":9813,"date":"2020-04-02T08:30:52","date_gmt":"2020-04-02T03:00:52","guid":{"rendered":"https:\/\/swaritadvisors.com\/learning\/?p=9813"},"modified":"2023-03-17T18:39:47","modified_gmt":"2023-03-17T13:09:47","slug":"companies-fresh-start-scheme-2020-and-its-provisions","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/learning\/companies-fresh-start-scheme-2020-and-its-provisions\/","title":{"rendered":"Companies Fresh Start Scheme 2020 and its Provisions"},"content":{"rendered":"\n<p class=\"has-drop-cap\">MCA or Ministry of Corporate Affairs has issued a new scheme, namely, Companies Fresh Start Scheme 2020. It is intended for those stakeholders who were unable to file any documents such as <a rel=\"noreferrer noopener\" aria-label=\"Annual Filing to ROC (opens in a new tab)\" href=\"https:\/\/swaritadvisors.com\/annual-filing-for-llp\" target=\"_blank\"><strong>Annual Filing to ROC<\/strong><\/a>. CFSS-2020 is a boon for the Companies that have made Filing-defaults as it protects them from any legal proceeding or prosecution on account of delay in filing documents. MCA has decided to provide a second chance or exclusive opportunity to such Companies to make a fresh start.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3a739617ba6\" class=\"ez-toc-cssicon-toggle-label\"><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><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3a739617ba6\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/learning\/companies-fresh-start-scheme-2020-and-its-provisions\/#Provisions_of_CFSS-2020\" title=\"Provisions of CFSS-2020\">Provisions of CFSS-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:\/\/swaritadvisors.com\/learning\/companies-fresh-start-scheme-2020-and-its-provisions\/#How_to_make_maximum_use_under_Companies_Fresh_Start_Scheme_2020\" title=\"How to make maximum use under Companies Fresh Start Scheme 2020?&nbsp;\">How to make maximum use under Companies Fresh Start Scheme 2020?&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/learning\/companies-fresh-start-scheme-2020-and-its-provisions\/#Conditions_under_which_CFSS-2020_isnt_Applicable\" title=\"Conditions under which CFSS-2020 isn\u2019t Applicable\">Conditions under which CFSS-2020 isn\u2019t Applicable<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Provisions_of_CFSS-2020\"><\/span><strong>Provisions of CFSS-2020<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><em>Ministry of Corporate Affairs is providing one-time opportunity to Stakeholders for filing all the pending documents without penalties being charged. Here are the provisions of Companies Fresh Start Scheme 2020:<\/em><\/p>\n\n\n\n<ul><li>The <strong>enforcement of CFSS-2020<\/strong> shall remain from 1st April 2020 to 30th September 2020.<\/li><li>MCA has exercised its power under <strong>Section 403 and 460 of Companies Act<\/strong>, 2013 to introduce the scheme of <strong>CFSS-2020<\/strong>.&nbsp;<\/li><li>This scheme also fosters inactive Companies to gain a dormant status <strong>under Section 455 of Companies Act, 2013<\/strong> by <strong>filing Form MSC-1<\/strong> with moderate fees. Thus, it helps inactive Companies to remain on ROC\u2019s register with minimum compliance requirement.<\/li><li>The Company that had done default can file the documents like Annual Filing by paying nominal fees (without including any additional fees imposed) under Companies (Registration Offices and Fees Rules, 2014).<\/li><li><strong>CFSS-2020<\/strong> provides hope to the Companies in regards to prosecution or proceeding for delayed filing of documents.<\/li><li>The scheme does not safeguard against any other consequential proceedings such as proceeding related to the interest of Directors or (KMP) key managerial personnel etc.<\/li><li>If a Company files an Application of the appeal against the prosecution for penalty passed by the Court or Adjudicating Authority, then the Company first needs to withdraw its Application and provide the proof of withdrawal to avail support under <strong>CFSS-2020<\/strong>.<\/li><\/ul>\n\n\n\n<div class=\"shadow6\">When the&nbsp; Adjudicating Authority or Court has passed an order to prosecute while the Company didn\u2019t file an appeal under Section 454(6) of Companies Act, 2013 as on commencement of CFSS-2020, then the following things shall be applied:-<\/div>\n\n\n\n<p><strong>1. <\/strong>The Company gets a period of 120 days to file an appeal before Regional Director if the last Filing date of an appeal falls <strong>between 1<\/strong><sup><strong>st<\/strong><\/sup><strong> March 2020 and 31<\/strong><sup><strong>st<\/strong><\/sup><strong> March 2020<\/strong>;<\/p>\n\n\n\n<p><strong>2. <\/strong>No prosecution has been initiated against the Company for non-compliance of Adjudicating Authority\u2019s order under <strong>Section 454(8) of Companies Act, 2013<\/strong>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_to_make_maximum_use_under_Companies_Fresh_Start_Scheme_2020\"><\/span><strong>How to make maximum use under Companies Fresh Start Scheme 2020?&nbsp;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>To avail immunity, the Companies need to file Eform \u201c<strong>CFSS-2020<\/strong>\u201d with ROCs through the official portal of MCA without paying any fees. ROCs shall approve all the documents within six months from the closure of this scheme, except:&nbsp;<\/p>\n\n\n\n<ul><li>No immunity shall be granted to the Companies that have any appeal pending in the Court against the management disputes;<\/li><li>No support shall be given to the Companies against which the Court or Adjudicating Authority has passed any conviction &amp; no appeal was preferred by the Company before this scheme came into force.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conditions_under_which_CFSS-2020_isnt_Applicable\"><\/span><strong>Conditions under which CFSS-2020 isn\u2019t Applicable<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>CFSS-2020 shall not apply under the following cases:<\/em><\/strong><\/p>\n\n\n\n<ul><li>ROC has already issued the Final Notice for striking off the Company\u2019s name under <strong>Section 248 of Companies Act, 2013<\/strong> <a href=\"https:\/\/www.mca.gov.in\/MinistryV2\/companies_stuckoff_248.html\"><strong>[1]<\/strong><\/a> ;<\/li><li>The Company has filed an <strong>Application STK-2<\/strong> for striking off its name with ROC;<\/li><li>Companies amalgamated under The Compromise and Arrangement Scheme;<\/li><li>A Company that has applied to obtain dormant status under Section <strong>455 of Companies Act, 2013<\/strong>, prior to <strong>CFSS-2020 scheme introduction<\/strong>;<\/li><li>Vanishing Companies;<\/li><li>Companies having a pending appeal before the Court of Law;<\/li><li>Companies with management dispute pending before Tribunal or Court;<\/li><li>A Company that was convicted by the Court and no appeal was preferred against such order of the Court before <strong>CFSS-2020<\/strong> came into force;<\/li><li>A Company which was convicted by an Adjudication Authority and no appeal was preferred against it before <strong>CFSS-2020<\/strong> came into effect.<\/li><\/ul>\n\n\n\n<p><div class=\"shadow4\">CFSS-2020 is a rare opportunity that every Company that made the default must employ to rectify their mistakes and give a fresh start to their business.<\/div><\/p>\n\n\n\n<p class=\"text-left\"><b>Read, Also<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/swaritadvisors.com\/learning\/superior-fraud-risk-management-guide\/\">Superior Fraud Risk Management Guide<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>MCA or Ministry of Corporate Affairs has issued a new scheme, namely, Companies Fresh Start Scheme 2020. It is intended for those stakeholders who were unable to file any documents such as Annual Filing to ROC. CFSS-2020 is a boon for the Companies that have made Filing-defaults as it protects them from any legal proceeding [&hellip;]<\/p>\n","protected":false},"author":10,"featured_media":9814,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[656,168],"tags":[657],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/9813"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/comments?post=9813"}],"version-history":[{"count":7,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/9813\/revisions"}],"predecessor-version":[{"id":19076,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/9813\/revisions\/19076"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media\/9814"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media?parent=9813"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/categories?post=9813"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/tags?post=9813"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}