Companies Fresh Start Scheme
As per the provisions of the Companies Act, 2013, all companies are required to follow statutory compliances annually.
The world, as a whole, is on a lockdown currently due to the unprecedented situation regarding public health and safety caused by the Coronavirus (COVID-19) pandemic. The Ministry of Corporate Affairs, in an attempt to ease matters for the companies, has introduced a new scheme known as the Companies Fresh Start Scheme, 2020 (CFSS).
Additionally, the MCA has also given the LLPs a bit of breathing space by making certain necessary changes to the LLP Settlement Scheme, 2020. The idea behind this is to provide a clean slate to all those law-abiding companies, giving them extended time and a certain level of financial relief with regard to compliances considering the current global situation.
What Does CFSS 2020 Include?
As per the provisions of the Companies Act, 2013, all companies are required to follow statutory compliances annually. This includes the Annual Return, Financial Statements and all the other necessary forms, documents and statements that are specified, within that particular time frame. Non – compliance of the same results in the imposition of penalties and fines. A company that fails to adhere to the compliances is called a defaulting company.
The Companies Fresh Start Scheme (CFSS) is applicable between the 1st of April, 2020 and the 30th of September, 2020.
Non-Applicability of the CFSS 2020
- Where the action for final notice of striking off the name as per the Companies Act, 2013 has already been initiated by the Designated Authority.
- Where the company has already filed the Form STK – 2 along with the prescribed fees for the striking off of the name of the company from the Register of Companies.
- Where the companies have been amalgamated under the scheme of arrangement or compromise.
- Where the application for Dormant Status has been filed by way of Form MSC – 1 along with the prescribed fees.
- Vanishing companies.
- Companies that are marked for the Corporate Insolvency Resolution Process or Liquidation.