Immunity Scheme for Non-compliant and inactive companies: CCFS, 2026
Kunal Gupta, Executive | corplaw@vinodkothari.com
Introduction
In order to encourage defaulting companies to either complete their long pending statutory filings or opt for an exit or dormant status, the Ministry of Corporate Affairs (‘MCA’), vide Circular dated January 24, 2026, has come up with ‘Companies Compliance Facilitation Scheme, 2026’ (‘CCFS, 2026’). This scheme offers one time immunity to eligible companies (detailed below) in two key ways: (a) updating statutory filings with reduced additional fees; and (b) enabling inactive or defunct companies to opt for dormancy or closure at lower fees. These benefits are available from April 15, 2026, to July 15, 2026.
This write-up discusses the applicability of the CCFS, 2026 and related concerns.
Companies eligible to avail CCFS, 2026
All companies are eligible to avail benefit of CCFS, 2026, except the following-
- Companies against which action of final notice u/s 248 (1) of CA, 2013 has already been initiated by the Registrar;
- Companies which have already filed application (STK-2) u/s 248 (2) of CA, 2013 for striking off their names;
- Companies which have already made application u/s 455 of CA, 2013 for obtaining the status of ‘dormant company’;
- Companies which have been dissolved pursuant to a scheme of amalgamation without winding up;
- Vanishing Companies; and
- Companies which have not received a notice of adjudication u/s 454 (3) of CA, 2013 and 30 days have elapsed.
Validity of the ‘Scheme’
As mentioned above, the window to avail the benefit under the CCFS , 2026 is for a limited period of 3 months, i.e from April 15, 2026 to July 15, 2026. That is, the companies, intending to avail the benefit under CCFS, 2026 shall have to file the requisite forms within the aforesaid period, failing which, normal fees along with additional fees without any concession will be applicable.
Offers under ‘CCFS, 2026’
Section 403 of the Companies Act, 2013 read with Companies (Registration Offices and Fees) Rules, 2014 provides that in case of delayed filing of statutory forms, an additional fee of Rs. 100 per day is payable for each day during which the default continues, subject to such limits as may be prescribed. Consequently, non-compliant companies may be required to pay substantial additional fees for the delayed filing of annual forms, over and above the normal filing fees.
The CCFS, 2026 provides a one- time window to all the eligible companies (discussed above) that have failed to file their statutory documents (refer list below), particularly, annual returns and financial statements, to –
- Get their annual filing completed by paying only 10% of the total additional fees prescribed under the law on account of delay alongwith the normal filing fees; or
- If there are no significant business activities in the company in atleast last 2 financial years,
- To get the status of ‘dormant company’ u/s 455 of the CA, 2013 by filing form MSC-1 by paying half of the normal fees payable under the rules; OR
- File form STK-2 to get the name of the company struck off during the currency of the Scheme by paying 25% of the filing fees.
Relevant E Forms for which immunity can be availed under ‘CCFS, 2026’
Under CCFS 2026, immunity and fee concessions are available in respect of the following e‑forms-
| E- Form | Particulars |
| Under Companies Act, 2013 read with relevant rules made thereunder: | |
| MGT-7 / MGT-7A | For filing annual return |
| AOC-4 / AOC-4 CFS / AOC-4 NBFC (Ind AS) / AOC-4 CFS NBFC (Ind AS) / AOC-4 (XBRL) | For filing financial statements |
| ADT-1 | For intimation about the appointment of auditor |
| FC-3 / FC-4 | For filing annual accounts / annual return by foreign companies in India |
| Under Companies Act, 1956 read with relevant rules made thereunder: | |
| 20B | For filing annual return by a company having share capital |
| 21A | For filing particulars of annual return for the company not having share capital |
| 23AC / 23ACA / 23AC – XBRL / 23ACA – XBRL | For filing Balance Sheet and Profit & Loss account |
| 66 | For submission of Compliance Certificate with the RoC |
| 23B | For Intimation for appointment of auditors |
Some practical questions relating to CCFS, 2026
- If a company has already received notice from an Adjudicating officer in relation to the non-filing of Form MGT-7 for FY 2020 to FY 2025, whether such company would still be eligible to avail the benefits of the CCFS, 2026?
Response: Yes, the company would still be eligible to avail the benefits of CCFS, 2026, provided 30 days have not elapsed from the date of receipt of the adjudication notice.
- Whether a company incorporated in 2012, which has not filed any statutory forms or annual filings since incorporation, would be eligible to avail the benefits of CCFS, 2026?
Response: Yes, such a company may, under CCFS, 2026, either regularise its default by completing all pending filings at the concessional additional fees, or opt for an exit route by applying for striking off or for dormant status, subject to fulfilment of the specific conditions and procedures prescribed for those options
- Company XYZ intends to apply for striking off its name under the CCFS, 2026, whether the company is required to update all pending annual filings up to date before filing Form STK-2? Further, whether the CCFS, 2026 provides relaxation/benefits for both updating pending annual filings as well as filing for strike-off?
Response: Yes. Rule 4 of the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016 mandates filing overdue financial statements and annual returns up to the financial year-end when the company ceased business operations. CCFS, 2026 provides some relaxation on filing fees of STK-2 but does not exempt compliance with striking-off prerequisites.
- If a company has already filed Form STK-2, which is currently pending for approval and has been marked for resubmission, whether the company can withdraw the existing application and file a fresh application under CCFS, 2026?
Response: No, CCFS, 2026 specifically rules out companies which have already filed Form STK-2 u/s 248(2) of CA, 2013 from taking benefit under this scheme.
- Company XYZ, a section 8 company, has not filed its annual filings for FY 2025, can it still apply for strike-off by filing Form STK-2 under the CCFS Scheme, considering that the scheme period will commence after 31 March 2026?
Response: A section 8 company cannot opt for striking off u/s 248.
- XYZ Pvt. Limited has received a SCN for non- filing of AOC-4 and MGT-7 for FY 2022 to FY 2025 on 1st March, 2026, can it opt for CCFS, 2026?
Response: In this case, since an SCN has already been issued on 1 March 2026 for non-filing of AOC-4 and MGT-7 for FY 2022–2025, the company would not be eligible to claim immunity or relief under CCFS, 2026.
- Do the benefits of CCFS, 2026 can also be availed by LLP?
Response: No, as of now, benefits under CCFS 2026 can be availed by companies only.
Concluding remarks
As an initiative to improve compliance level and ensure that the corporate registry reflects correct and up-to-date data, MCA has come up with this one-time Scheme. It’s a wake-up call for non-compliant companies to regularise themselves by updating their filings at the lowest additional fees, or to opt for dormancy or strike-off with ease at concessional filing fees. Companies should seize this opportunity to achieve statutory compliance, avoid future penalties, and contribute to a transparent business ecosystem.
Rethinking Repayment Recurrence: EMIs, EWIs or EDIs
Manisha Ghosh, Assistant Manager | finserv@vinodkothari.com
Introduction
In the world of finance, where EMIs reign is supreme, a quiet revolution is brewing. For decades, the EMI—a fixed, predictable monthly payment—has been the default repayment option in case of loans. This repayment model aligns well with the cash-flow profile of salaried borrowers, whose income is credited at predictable monthly intervals. A fixed monthly outflow is therefore rational and manageable for the borrower. But what happens when there are borrowers who don’t live by the calendar?
In India there also exists a substantial segment of borrowers with fluctuating income streams such as taxi drivers, gig workers, small traders, daily wage earners, contract-workers, etc. Their earnings are typically received on a daily or near-daily or weekly basis and may fluctuate based on demand, seasonality, or operational variables. For such a category of borrowers, imposing a lump-sum monthly repayment obligation may create liquidity stress. People with irregular income may find it difficult to set aside a large lump sum to honor the obligation on the due date, even if their total earnings over the month are sufficient. As a result, they may lead to missed payments not because they lack income or resources, but because their cash flow does not align with the repayment schedule.
To address this structural mismatch between income frequency and repayment frequency, banks and NBFCs have been exploring the option of Equated Daily Instalments (“EDIs”). Under an EDI structure, the repayment obligation is broken into smaller, more frequent daily amounts, theoretically aligning repayment with the borrower’s earning cycle and smoothing liquidity issues.
Regulatory Landscape
There is no regulatory prohibition under the RBI framework preventing lenders from offering daily repayment options in their loan products. In fact, the RBI’s Key Fact Statement (KFS) format prescribed under the Responsible Lending Conduct Directions acknowledges not only EMIs but has referred to the term Equated Periodic Instalments (‘EPI’), which has a broader meaning.
The use of the term EPI indicates that repayment need not necessarily be structured on a monthly basis. Rather, lenders are permitted to determine an appropriate repayment frequency whether daily, weekly, fortnightly, or monthly depending on the loan product and borrower profile. The repayment frequency is arrived at by considering the source of income, cashflows of the borrower; this ensures that servicing of such loans is aligned with the borrower’s income profile and does not create any undue financial burden or pushes the borrower towards a debt trap.
Suitability of the Lending Product
Irrespective of the repayment frequency, the issue of fairness in lending still needs to be examined. In case a borrower is required to make repayments every single day, any small disruption in income will be considered as a default and have an immediate impact on the borrower’s performance. For example, if the borrower falls sick or is unable to work for a few days, their daily income may stop. In such a case, they may miss one or more installment payments. Since the due date arises daily under an EDI structure, even one missed payment can start the DPD count, and the delay will continue to add up to the repayment obligation until the payment is made.
This situation will have adverse implications not just for the borrower but also for the lender. The borrower’s credit record may worsen quickly, even if the income disruption is temporary. At the same time, the lender may see rising delinquencies in its portfolio.
While EDIs may help in synchronising repayment with daily income, they provide very little cushion to borrowers in case of unforeseen and unexpected events resulting in default in repayment. Lenders may instead consider a weekly repayment model, where borrowers can collect and accumulate their daily earnings and repay the lender on a weekly basis.
A weekly installment structure provides the borrower with a limited but meaningful cushion. If the borrower is unable to earn on a particular day, they still have the remaining days of the week to generate income and arrange the repayment amount. This flexibility reduces the likelihood of an immediate default and offers a more balanced approach between daily and monthly repayment models.
Operational Flexibility for Lender
From an operational perspective, daily repayments also create practical challenges. The lender would need to monitor DPD status every day, carry out daily accounting entries, and reconcile payments continuously. For a large number of borrowers, this can become difficult and resource-intensive. Further, if collections are done manually or through agents, missed payments may require daily follow-ups. This increases recovery costs and may create borrower stress or reputational risks for the lender.
Having said that, this kind of arrangement is restricted under the digital lending regulations. Paragraph 10(2) of the RBI (NBFC- Credit Facilities) Directions, 2026 mandates that all loan servicing and repayments must be executed directly by the borrower into the regulated entity’s bank account. The framework expressly prohibits the use of pass-through or pool accounts of any third party, including those of a Lending Service Provider (‘LSP’).
Accordingly, under the current digital lending regime, repayments cannot be routed through an intermediary. This makes such a model difficult to implement for loans that are originated digitally.
Conclusion
The choice of repayment frequency should not be driven by convention alone, but by the borrower’s income pattern and capacity to absorb short-term shocks. EDIs attempt to bridge this gap, but a rigid daily obligation can expose borrowers to immediate default in the event of even minor income disruptions.
At the same time, daily repayment structures increase operational and monitoring burdens for lenders. Therefore, the focus should be on designing repayment models that balance flexibility with discipline. Structures such as weekly repayments, grace periods, or limited flexibility mechanisms may provide a more sustainable balance. Ultimately, a well-designed repayment model protects both borrower credit health and lender portfolio quality, reinforcing the broader principles of responsible and fair lending.
NFRA Circular on effective communication between auditors and TCWG – Frequently Asked Questions
Team Corplaw | corplaw@vinodkothari.com
Other resources:
NFRA’s Call for a Two-Way Communication: A New Requirement or a Gentle Reminder?
RBI’s 3-month breather for new rules on capital market exposures
At the fag end of the financial year, just before the Amendment Directions on Capital Market Exposures (originally issued on 13th February, 2026) were to become effective, the 30th March 2026 Press Release by RBI has the effect of deferring the applicability of and substituting the same with Revised Amendment Directions to address certain representations from the stakeholders.
Revised Applicability Date:
- Effective from 1st July 2026 instead of 1st April 2026
- Banks may opt for early adoption in its entirety
This would mean an additional window of 3 months towards implementation of the revised rules on capital market exposures.
Acquisition Finance: clarifications on mergers and amalgamation, on-lending for acquisition permitted: target not to be a financial entity
- Mergers and amalgamations permitted within acquisition finance, definition amended [Para 4(1)(ia)]
- This is a clarificatory change
- Target can be non-financial entity only [Para 170A]
- Restriction extends to indirectly acquiring control over financial entities who are subsidiaries/ JV of target entity [proviso to Para 170B]
- Earlier Directions referred to restriction on the Acquiring entity as a financial entity, the Revised Directions extends the restrictions on the target company too, thus limiting the scope of companies that may be acquired through
- On-lending by Acquiring entity to subsidiaries for acquiring control permitted [Para 170E(2)]
- Earlier, lending was permitted to subsidiary/ SPV based on strength of Acquiring company by the bank, now, the Revised Directions further permit on-lending by the Acquiring entity to its subsidiary
- Potential synergies to be collectively met for all companies of a group acquired pursuant to acquisition finance [Para 170B]
- Lending to subsidiary/ SPV based on strength of Acquiring company, corporate guarantee to be provided by Acquiring company
Capital Market Intermediaries: relief that does not last long
- Bank financing for proprietary trading permitted subject to 100% collateral in the form of cash and cash equivalents [third proviso to Para 219ZA]
- While the proviso enables bank finance, in view of the 100% liquid security requirements, the industry participants does not seem to consider this a favourable change towards meeting the working capital requirements. However, the 3-months’ breather may be considered a favourable step.
- For non-debt Mutual Funds, intraday facilities secured by guaranteed receivables not to be considered as Capital Market Exposure
- Receivables guaranteed on account of maturity proceeds of G Secs, T-Bills, SDL, or interest from G-Sec and SDLs held by such mutual funds, or maturity proceeds of TREPS from CCIL
Lending to individuals: limits to be monitored at banking system level
- Cap of Rs. 1 crore on lending against eligible securities and Rs. 25 lacs for IPO/ FPO/ ESOP financing to be applicable at banking system level
- While the borrower-level limits stand increased on an individual basis, the application of such limits at a banking system level will ensure that excessive borrowings are not done by an individual borrower for capital market dealings
See a detailed article on the Amendments on Capital Market Exposures here.
Presentation on Corporate Laws (Amendment) Bill, 2026
– Team Corplaw | corplaw@vinodkothari.com
Watch our webinar on the same here.
Read more:
Corporate Laws Amendment Bill: Easing, Streamlining and Updating the Regulatory Framework
External Commercial Borrowings (ECB) Framework
– Heta Mehta, Senior Executive | corplaw@vinodkothari.com
Watch our video here: https://youtu.be/XaS6Eh3Ekd4
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Unlocking Access to Public Markets: Regulator brings Relaxation to Minimum Public Offer and Shareholding Rules
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SEBI’s ease of doing business for trusts and amendment in ‘Fit and Proper person’ criteria
– Abhishek Namdev, Assistant Manager | corplaw@vinodkothari.com
