FAQs on Companies Fresh Start Scheme, 2020

A quick analysis of the Scheme is available at- https://youtu.be/lXUb4l8srM8

6 replies
  1. Avadh Prabhakar Thuvassery
    Avadh Prabhakar Thuvassery says:

    Hi Sir,

    A Pvt. Ltd company was incorporated in the year 2016-17 but has not audited and filed its AOC 4 and MGT 7 for the past 4 years. The company only had its business in its first year(2016-17). Now the company plans to struck off it’s name form ROC by adopting CFSS 2020 scheme and filing STK-2. So we just wanted to know whether we can File AOC 4 and MGT -7 for the year 2016-17 only in which it had business operation and then file STK-2 for striking of the name of company. (Inactive company as per section 455 and voluntary strike off as per section 288 has been referred). The company has not filed application for obtaining dormant status.

    Kindly share your valuable thoughts on this.

  2. Chandrashekar K
    Chandrashekar K says:

    I read this FAQs on CFSS and its been very useful.

    I just had one basic question that if a company appoints a director by March 20, 2020 and due date for filing DIR 12 falls on April 19, 2020 and due to COVID-19 lockdown, if it fails to file form by April 19 but wish to file it anytime before Sept 30, 2020, in that case, whether is it required for that company to file CFSS 2020 post Sept 30, 2020 and seek immunity under CFSS scheme?

    In my view, the relaxation granted under Moratorium on Mar 24 is different from CFSS which was launched from April 1.

    Moratorium is specifically granted due to CoVID-19 and on the other hand, CFSS is an extended one time chance given by MCA allowing all companies who have defaulted in filings prior to April 1, 2020 to file those belated docs during currency of scheme and then seek immunity.

    As per Moratorium, wherever the filing due dates falls btw April to Sept 2020, owing COVID lockdown, the due date of those filings has been extended upto Sept 30 by MCA and therefore, there is no additional fee or immunity required. Filing form till Sept 30, 2020 will be considered as if the filing is done in time and hence, it will neither attract to additional fee nor any liability which needs immunity.

    Immunity is required under CFSS only if filing due dates have been already breached prior to April 1, 2020 and such Defaulting Company now wish to file that belated form and seek immunity from liability arising out of filing related provisions under CA 2013.

    Hence, in my above query, I think its not required for that company to file CFSS 2020 post Sept 30, 2020 and seek immunity under the scheme for filing DIR 12 beyond April 19 but within Sept 30 as it get covered under Moratorium.

    That said, I would like to understand the position taken by your firm on this aspect. Please let us know if you have a different view here. Look forward to hear. Thanks.

    • Shaifali Sharma
      Shaifali Sharma says:

      Dear Sir, thank you for sparing out time and going through our write-ups.

      We understand that your query pertains to whether the CFSS Scheme be applicable on the delayed filings whose due date falls b/w April 2020 to September 2020?

      From a combined analysis of clause (I) of the circular dated 24th March, 2020 and circular dated 30th March, 2020, we understand that the intent of both the circulars is to reduce the compliance burden on the companies, enabling them to make a fresh start by filing all the pending documents, returns, statements, etc., without any additional fees, irrespective of the its due date.

      As mentioned in the circular, CFSS 2020 is not a separate measure but has been brought “in furtherance of the Ministry’s Circular No. 11/2020, dated 24th March, 2020” and therefore both circulars shall be read in conjunction with each other.

      It is to be noted that the applicability of the CFSS Scheme should not be determined on the basis of the ‘due date’ of a form and the companies which have any document pending for filing on any given date can take the benefit of the Scheme.

      Question no. 43 of the CFSS FAQs issued by MCA (http://www.mca.gov.in/Ministry/pdf/FAQCFSS_15042020.pdf), relevant extract reproduced below, clarifies the same:

      “Will this scheme be applicable on filing, if due date is falling between period April 2020 to September, 2020?
      Ans: Irrespective of the due date additional fee waiver can be availed during the currency of the scheme”

      Accordingly, in the given case, the company shall first file the e-Form DIR-12 by September 30, 2020 and obtain the immunity certificate by filing e-Form CFSS-2020 within 6 months from the closure of the Scheme (i.e. by March 30, 2021).

      • Chandrashekar K
        Chandrashekar K says:

        Thanks for the kind response.

        If the companies have crossed the deadline of filings in respect of due dates falling btw April-Sept 2020 owing to COVID-19 lockdown, MCA has already extended the due date of those filings till Sept 30 by issuing a Moratorium on MCA 21. Give this, isn’t the need of applying for immunity should apply only for Defaulting Companies as of April 1, 2020 and not for filings btw April-Sept 2020? If applying for immunity is required for filings btw April-Sept 2020 also, then the whole intent of relaxation granted under Notification dt. March 24 would get defeated and almost every company filing a form on delayed basis due to COVID-19 will have to undergo immunity process post Sept 30 which seems unreasonable. Would you like to revisit your position on this? Thanks. 

        • Parmeet Kaur
          Parmeet Kaur says:

          Dear Sir,
          Your kind attention is gathered towards Point No. 1 of General Circular No. 11/2020 dated 24/03/2020 which provides that no additional fees shall be charged for late filing during a moratorium period from 01st April to 30th September 2020, the said point also provides that Circulars specifying detailed requirements in this regard are being issued separately. In pursuance thereof General Circular No. 12/2020 dated 30/03/2020 was issued which also states that this Circular is in furtherance of the Circular No. 11/2020 dated 24/03/2020.

          The relevant part (Point No. 1) of the Circular dated 24/03/2020 shall be read together with and as a part of Circular dated 30/03/2020. This will not defeat the intent of Circular dated 24/03/2020 since the Circular dated 24/03/2020 itself mentions that the detailed requirements is to be issued separately.

          Accordingly, I humbly submit that the Scheme shall also be applicable on the delayed filings during 1st April, 2020 to 30th September, 2020


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