Company Fresh Start Scheme 2020

The Companies Fresh Start Scheme 2020 (CFSS 2020) provides an opportunity to all defaulting companies to do compliance with extended time period without paying any additional fees.

According to CFSS 2020, the defaulting company shall get certain level of financial relief in terms of compliance. The purpose behind introducing this scheme is to maintain all statutory compliance related to companies and provides a clean state to defaulting companies.

LLPs are not covered under Companies Fresh Start Scheme 2020. The LLPs have been given relaxation by way of LLP Settlement Scheme 2020.

 

The Companies Fresh Start Scheme is valid from 1st April, 2020 to 30th September, 2020.

Advantages of CFSS

  •  Relaxation for form filing timeline
  •  Immunity to business from penal provision
  •  No imposition of penalty for late submission
  •  Additional timing for filing appeal with Regional Director
  •  No imposition of late filing fees or additional fees.
  •  Clean slate to defaulting company
  •  Immunity from prosecution and proceeding against the company for imposing penalty

Relevant Terms

Defaulting Company: Any company that does not file documents, returns including annual statutory documents of the Companies Act with the MCA is a Defaulting Company.


Inactive Company: A company which is not carrying any business operation/ activity or has not made any significant accounting transaction in the last two years or has not filed financial statements and annual returns is known as an inactive company.

Features of CFSS 2020 for Defaulting Companies

  • The defaulting company shall pay normal fees for the filings. No additional or late fees needs to be paid.
  • The company gets immunity from prosecution and proceedings only which arise due to delay in filing belated documents or return.
  • If an order is passed by the court and the company has not filed any appeal against such order, the company is allowed 120 days to file appeal before the Regional Director. During the 120-day period, any non-compliance of the court order which is related to delay in filing of any document shall be condoned and no further action shall be initiated against the company.
  • After all documents are taken on file or approved by the designated authority, the company shall file the Companies Fresh Start Scheme Form has to be filed before expiry of 6 months from the date of closure of Companies Fresh Start Scheme 2020. An immunity certificate in respect of the documents filed shall be issued.
  • A company which has an appeal pending against any notice or order for prosecution and proceedings related to delay in statutory filing then before registering under Companies Fresh Start Scheme, the appeal should be withdrawn and a copy of the appeal withdrawn shall be attached with the application.

Features of CFSS 2020 for Inactive Companies

  • An inactive company can submit application for obtaining dormant status u/s 455 of Companies Act, 2013 while filing due documents.
  • Company also has the option to submit application for striking off the name from register of companies while filing the due documents.

Cases where Immunity will not be granted

  • An Appeal is pending in the name of company before the court of law
  • Management dispute is pending before the court of law
  • Conviction Order imposing penalty has been passed but no appeal has been filed by the company before this scheme came into force

Non-Applicability of CFSS

  • The company is a Vanishing Company
  • Action for final notice for striking off name u/s 248 of the Companies Act, 2013 has already been initiated
  • The application for striking off from the register of companies has already filed by the company
  • The companies have amalgamated under a scheme of Arrangement
  • The application for obtaining Dormant Status u/s 455 has already been filed with the ROC before this scheme.
  • Where any Increase in Authorised Capital is involved or any Documents related to charge such as CHG-1, CHG-4, CHG-8 and CHG-9

Applicability and Non-Applicability of various E-Forms:

FORMS Purpose Applicability
FC-4 Annual return of Foreign company Applicable
MGT-7 Annual Return Applicable
INC-6 One Person Company conversion Applicable
MSC-1 For obtaining dormant status Applicable with some conditions
DIR-12 Change in director or KMP details Applicable
CHG-4 Satisfaction of charge Not Applicable
BEN-2 Return of significant beneficial owner  Applicable
CRA-4 Cost audit Report filing  Applicable
DPT-3 Return of Deposits Applicable
ADT-1 Appointment of Auditor Applicable
ADT-3 Resignation of Auditor Applicable
MSC-3 Return of Dormant Company Not Applicable
CHG-1 Creation or modification of charge other than debentures Not Applicable
AOC-4, AOC-4 XBRL Financial statement and other documents for filing with Registrar Applicable
AOC-4 CFS Consolidated Financial Statement for filing with Registrar. Applicable
AOC-4 NBFC NBFC’s Financial statement for filing with Registrar. Applicable
STK-2 Striking off the name of the company from Register of Companies Applicable with some conditions
SH-7 Alteration of share capital Applicable except increase in authorised share capital
INC-22 Shifting of registered office of company Applicable

Video On Companies Fresh Start Scheme 2020

  • Company Fresh Start Scheme 2020
  • Validity of the Scheme
  • Forms that would be eligible for late filings
  • About LLP Settlement Scheme, 2020
  • Who is not eligible for CFSS

Any company which has made a default in filing of any of the documents, statement, returns, etc including annual statutory documents on the MCA-21 registry.

A company which is not carrying any business operation/activity or has not made any significant accounting transaction from the last two years or has not filed financial statements and annual returns.

After all due documents are filed and taken on record by the designated authority, the CFSS Form is to be filed to obtain the Immunity Certificate.

There is no fee for filing E-Form CFSS-2020.

LLPs are not covered under this Scheme; it is only for companies. However, LLP can avail benefit under LLP Settlement Scheme, 2020.

It is specifically mentioned in Companies Fresh Start Scheme, 2020 that, this scheme is not applicable in case of Increase in authorised capital of the company by filing Form SH-7. Hence, the company has to file the form with additional fees. 

If the company files Form AOC-4 & MGT-7 within 30th September, 2020 and also files Form CFSS-2020 then company will get immunity from being prosecuted.

What’s Included

  • Consultation with our Expert
  • Filing of all documents in default
  • Filing of CFSS Form
  • Obtaining the Immunity Certificate from ROC

Documents Required

  • Last filed annual returns
  • Audited Financial statements for all the years in default
  • Any other document that may be required

Company Fresh Start Scheme 2020


Company Fresh Start Scheme 2020 provides an opportunity to all defaulting companies to get a clean slate in terms of statutory compliance without payment of any additional fees. Filecrat will analyse all your defaults and assist you in their compliance.

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