Companies Fresh Start Scheme, 2020 (CFSS-2020): COVID-19 Relief Measure

In order to facilitate the companies registered in India to make a fresh start on a clean slate, the Ministry of Corporate Affairs (MCA) has decided to take certain alleviative measures for the benefit of all companies. The Central government launched the CFSS-2020 to enable the defaulting companies to file any belated documents in the MCA-21 Registry, condoning the delay in filing with ROC, with regards to relaxation on charging of additional fees and granting immunity from launching of prosecution or proceedings for imposing any penalties.

The key highlights of the CFSS-2020, applicable from 1^st April, 2020 to 30^th September, 2020 are as follows:-

• Every defaulting company shall be required to pay the normal filing fees as prescribed on date of filing of belated documents and no additional fees shall be payable. Immunity from launch of prosecutions or proceedings for imposing penalty under the Companies Act, 2013 shall be provided to the extent such penalty pertains to any delay associated with filings of belated documents.
• In case, the defaulting company has filed any appeal against any notice issued or complaint filed or order passed by the Court/Adjudicating Authority with regards to imposition of penalty, such appeal shall be withdrawn before filing an application for immunity certificate.
• Where an appeal was not filed and the last date of filing appeal against order of Adjudicating Authority falls between 1st March, 2020 & 31st May, 2020, a period of 120 additional days shall be allowed to all companies during which any prosecution for non-compliance of the order, as it relates to delay of filing, shall not be initiated against such companies.
• Application for issue of immunity certificate in respect of document(s) filed under the Scheme may be made electronically in Form CFSS-2020, last date of which shall be 31st March, 2021.
• CFSS-2020 not applicable to certain cases as follows –
  • Companies against which action for final notice for striking off its name under the Act has already been initiated.
  • Where the company has already filed application for striking off its name from the Register of companies.
  • Where such companies have amalgamated under a scheme of arrangement or compromise.
  • Where applications have been filed for obtaining dormant status before this Scheme.
  • Vanishing companies
  • Where increase in authorized share capital and charge related documents are involved.

• Inactive companies can apply for obtaining the status of Dormant Company or for striking off the name of the company under this Scheme.

Source: MCA General Circular No. 12/2020