Companies Fresh Start Scheme And LLP Settlement Scheme

THE COMPANIES FRESH START SCHEME, 2020.

The Ministry of Corporate Affairs (MCA) vide its circular no. 12/2020 dated March 30, 2020 has notified the Companies Fresh Start Scheme, 2020 for condonation of delay in filing or relaxations in additional fee of filings of Companies. The scheme shall be effective from April 01, 2020 and shall remain in force up to September 30, 2020.

The scheme offers one-time opportunity to inactive Companies to get themselves declared as a “dormant company” under section 455 of the Companies Act, 2013 by filing a simple application at a normal fee enabling inactive companies to remain in the register of companies with the Registrar with minimal compliance requirements.

The key highlights of the said scheme are as follows:

1. The scheme is applicable on filing of every statement, documents, returns including annual returns and financial statements etc. which were due for filing till March 31, 2020

2. The scheme has also given opportunity to DIN holders whose status of DIN has been marked as ‘Deactivated’ due to non-filing of e-form DIR-3KYC/DIR-3 KYC-Web and Companies whose compliance status has been marked as “ACTIVE non-compliant” due to non-filing of Active Company Tagging Identities and Verification (e-form ACTIVE) to file the respective forms without additional filing fees and penalties

3. The defaulting Companies may file the statement, documents, returns which were not filed on time on payment of normal fee, which is applicable for filing of such statement, documents, returns, etc. The immunity with respect to prosecution or proceedings for imposing penalty shall be provided to the extent of such delay in filings of belated statement, documents, returns, etc. and not for any proceedings which includes the interest of any shareholder or any other person related to the Company

4. If any defaulting company has already filed any appeal against any notice issued or complaint filed or an order passed by a court or by any adjudicating authority in respect of statutory filings, then the defaulting Company is first required to withdraw that appeal and furnish the proof of such withdrawal before filing an application under this scheme for granting immunity

5. In case an adjudicating authority has passed an order against a defaulting Company with respect to delay in filing of any statement, documents, returns etc. and no appeal has been filed by the company and its officer, in that case, if the last date of filing the appeal against the order of adjudicating authority falls between March 01, 2020 to May 31, 2020 (both days included), then an additional period of 120 days with effect from such last date shall be allowed to the Company and its officers for filing an appeal

6. The defaulting companies which opt for the benefit of the scheme and file the belated documents to take an immunity under the scheme, may make an application in Form CFFS-2020 electronically after the closure of the scheme but not later than 6 months from the said closure. The immunity shall not be applicable in case of any appeal or management disputes pending before court of law or tribunal. There is no fee applicable on the filing of Form CFSS-2020

7. The designated authority shall issue immunity certificates to the companies on the basis of declarations received in the Form CFSS-2020

8. In case the defaulting inactive company is opting the immunity under the scheme, then the Company is required to do the following:

• Apply to get themselves as a dormant company by filing the e-form MSC-1 at a normal fee; or
• Apply for striking of the name of the company from the register of registrar by filing the e-form STK-2 at a normal fee

9. This Scheme shall not apply to the following:

• Companies which have made an application for striking off its name from the register of registrar
• Companies against which process of striking off under section 248 of the Act has already been initiated by the designated authority
• Companies which have amalgamated under the scheme of compromise and arrangement
• Companies which have made application for obtaining “Dormant status” under section 455 of the Act before the scheme
• Vanishing Companies
• In cases of increase in authorized share capital (Form SH-7) and charge related documents (CHG-1, CHG-4, CHG-8 and CHG-9)

The link of the amendment is as follows:

http://www.mca.gov.in/Ministry/pdf/Circular12_30032020.pdf

THE LLP SETTLEMENT SCHEME, 2020

The Ministry of Corporate Affairs (MCA) vide its circular no. 13/2020 dated March 30, 2020 has modified the last date of the LLP Settlement Scheme, 2020 from June 13, 2020 to September 30, 2020.

The link of the amendment is as follows:

http://www.mca.gov.in/Ministry/pdf/Circular13_30032020.pdf

Please feel free to revert on below mentioned email ids in case you need any further clarification or information.
Nidhi Singh at nidhi.singh@ibadvisors.co and Tripti Sharma at tripti.sharma@ibadvisors.co