An outline

Ministry of Corporate Affairs hosted a scheme which gives a chance to the Companies to make all their pending compliances, including annual filing without raising extra fees. It means companies can file incomplete documents only with regular fees applicable to the company with no extra penal amount.

Frequently asked questions

Q1. What is the real name of the Scheme?
Ans: Companies Fresh Start Scheme, 2020.

Q2. From which date shall the scheme will start and end?
Ans: Starting date: April 01st, 2020, Ending date: September 30th, 2020.

Q3. What is the USP of the Scheme?
Ans: One time opportunity for companies for filing delayed documents without penalty.

Q4. On which companies this Scheme is valid?

Ans: The Scheme is valid to all evaded companies i.e., those Companies which had not filed the documents, statements, returns timely etc. including annual statutory documents.

Q5. On which forms the Scheme is applicable?
Ans: Scheme covered to all those e-forms which is to be filed with MCA except:
1.    Increase in authorized capital of the Company related form
2.    Charge related forms:-
         •    CHG-1(Creation and alteration of Charge other than linked to Debentures)
         •    CHG-4(Satisfaction of charge)
         •    CHG-8(Extra time for filing creation / alteration / satisfaction of charge)
         •    CHG-9(Creation or alteration of charge for debentures)

Q6. Example of cases in which we can avail the scheme?

Example 1:
Let’s presume, ABC Private Limited was commenced on 1st January, 2014, since then, the Company had not filed annual related forms with ROC (i.e., form AOC-4, MGT-7, ADT- 1) because the Company was not awake of this necessity.
Now, what Company has to do?
 In this case, Company by using scheme benefits can file its all incomplete annual filing forms with regular fee applicable to the company as if the documents were filed on due date by the Company.

Example 2:
Let’s presume, XYZ Private Limited in financial year 2016-17 added one director and removed existing director from the company for which DIR-12 was required to filed but the company failed to do the same.
Now, what can the Company do?
In this case, Company by using scheme benefits can file DIR-12 with regular fee applicable to the company as if the documents were filed on due date by the Company.

Q7. Example of cases in which we cannot avail the scheme?

Example 3:
Let’s presume, PQR Limited on 31st April 2016 had increased its authorized capital for which Company had to file SH-7, but the Company failed to file the same and now the late fee i.e., 20,000 applicable to the company along with regular fees payable to MCA.
Now, what can the Company do?
The Scheme do not allows the filing of form SH-7 without extra fees, and hence, the Company has to file the form via normal route only by payment of late fee.

Q8. How can the benefit of the Scheme be utilized?
Ans: The Company has to file a form named as “Issue of Immunity Certificate” on which the filing fees are zero.
Once ROC will receive the form, they will issue an Immunity certificate to the company i.r.t documents filed under this scheme.

Q9. Is there any case, in which the Scheme shall not apply?
Ans: The Scheme shall not cover below cases:
•    Those companies who already received a final notice for striking off the name by the ROCs;
•    Those company who made an strike off name application of the company from ROCs;
•    Those amalgamated companies fall under the scheme of compromise and arrangement;
•    Those company who already applied for dormant status before the scheme introduction
•    Those vanishing Companies;
•    Those Increase in authorized share capital forms i.e., Form SH-7;
•    Those charge forms i.e., CHG-1, CHG-4, CHG-8 & CHG-9;

Q 10. Is there any Benefit to Inactive Companies?
Ans: Yes of course, as along with filing of incomplete documents, an inactive Company can apply following forms also, with normal fee i.e.,
 •    File MSC-1 and declare them as Dormant company,
 •    File or apply STK-2 form for striking off the name 

Q11. Is there any threat to a Company which has pending compliances but still don’t want to take benefit of the scheme and want to continue as a defaulting Company even after the closure of the scheme?
Ans: Yes, there is a threat arise as ROC will take strict action against those companies after the conclusion of the scheme i.e., after 30th September, 2020 if they had not complied the scheme.

Q12. Is there any benefit in the scheme other than waiver of penalty for late filing?
Ans: Yes, along with waiver of penalty this Scheme offers launching of protection to companies in relation to prosecution or proceeding for imposing an extra penalty due to delay linked with certain filings.

Q13. If the Company or any officer in default has filed any appeal before competent authority against any notice issued/ complaint filed/order passed by Court under the provisions of Companies Law, regarding application made under the Scheme by the company, then, is there any special option for taking profit of the Scheme?
Ans: Yes, applicant shall take out the appeal before filing the application for protection i.e., for waiver of fee and closure of prosecution and have to give a proof of withdrawal along with application for granting protection.

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CS Ayushi Agrawal

All in Startup: Launching a New Idea When Everything is on the line!! But doing something that isn’t done before takes the world from zero to one. NEUSOURCE takes an progressive approach to building startups. THINK OUTSIDE THE INBOX!!