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Annual Filing for private Companies- Companies Fresh Start Scheme 2020

Annual Filing for private Companies- Companies Fresh Start Scheme 2020

The Companies Act 2013, requires annual filing for private companies mandatory which includes their annual returns, financial statements, and other documents and statutory filing on time. There are prescribed due dates under provisions to file these returns. In case of delay of filing an additional fee or late fee including penalty is charged.

The entire world is going through tough times due to COVID-19 with uncertainties all around. Although there are business mantras to deal with Lockdown situation there was much-needed support required from the Government.

In the wake of this current pandemic situation, the MCA has come up with the Companies Fresh Start Scheme 2020. This would ease off the compliance burden regarding annual filing for private companies or LLP and give a clean slate to companies to re-start their operations and compliances. This would mean not only additional time for new companies but also allows old companies to start afresh.


Features of the scheme are as follows:

1. The finance ministry has introduced the Companies Fresh Start Scheme which applies to both the annual filing for private companies and LLPs. The scheme applies from April 1, 2020, to September 30, 2020.

2. As per the scheme, all defaulting companies will not be charged any additional fee for late filing of forms, documents, the return of any period. Only normal fees shall be payable

3. This scheme also provides immunity against any prosecution or proceeding only if such prosecution or proceeding is related late filing of documents be it annual filing or regular ones

4. If there is an appeal filed by the company on its behalf or behalf of any of its officers, for any notice/complaint/order issued against it or any such officer under the provision of the Companies Act, 1956 or 2013, with the competent court or the authority.

    • It can also apply for the issue of immunity certificate under this scheme, but it will have to withdraw its appeal first.
    • However, such order/notice/complaint must be related to delay in statutory filing under the Act pertaining to annual filing for private companies or LLP

5. Special measures in cases where the order was passed by adjudicating authority, but appeal could not be filed as on date of commencement of the scheme

    • If the last date of filing of appeal filed between March 1, 2020, to 31st May 2020, an additional 120 days shall be allowed from the last of appeal.
    • During the additional period granted above, no action shall be initiated for the non-filing of any documents as per the court order.

6. Application for Immunity shall be filed in form CFSS-2020

    • The form CFSS-2020 must be filed within 6 months after the date of closure of such a scheme.
    • The immunity certificate shall be granted by a designated authority.
    • There will be no fee charged for such form

7. The immunity is not applicable

    • Any appeal is pending before the court of law
    • Management disputes pending before any court of law or tribunal
    • An order imposing conviction has been passed by the court or any penalty has been imposed by the adjudicating authority and no appeal is filed against such order, before the applicability of this scheme.

8. Immunity Certificate will be granted by designated authority based on the declaration made in CFSS-2020.

Not applicable to the following companies

1. Companies against which action for the striking of the name has already been initiated by the department.

2. Application for striking off the name is filed by the company.

3. Amalgamated companies

4. Application for obtaining dormant status is filed

5. Vanishing companies

6. Where default annual filing for private companies or LLP pertains to:

    • Increase in authorized share capital is involved (SH-7)
    • Charge related documents (CHG-01, CHG-04, CHG-08, and CHG-09)

7. This scheme does not provide immunity from any proceeding or prosecutions in case of any serious and consequential proceeding where the interest of shareholders is involved.

Companies Fresh Start Scheme 2020 is great opportunity for old companies to start afresh

Effect of Immunity

After immunity is granted, the designated authority shall withdraw any prosecutions pending before the Court or any proceedings of adjudication of penalties u/s 454.

The defaults, in respect of which immunity is granted, shall be deemed to be completed and there would be no penalties levied for delays in annual filing for private companies or LLP

For Inactive Companies

The scheme also provides some relief to inactive companies. Inactive companies can ignore the annual filing for private companies or LLP and rather:

    • apply for obtaining the status of the dormant company by filing form MSC-1
    • apply for strike off by filing form STK-2

Failure to avail of this scheme on annual filing for private companies

If any company fails to avail the benefits of this scheme during the relevant period, then the designated authority shall proceed with as they normally would have against such companies. It would be done after the period for availing such scheme is over and they would have to adhere to regulations for annual filing for private companies or LLP

This is a great initiative by the Government to provide relief to the Indian business community. This is, in addition, to help provide for GST returns and Income tax filings wherein due dates have been extended till 30 June 2020. In addition, MCA has extended due dates for filings till 30th September 2020. All these initiatives will provide a great impetus to the Indian economy in times to come.

Format of CFSS-2020 should be submitted to ROC to avail exemption from late fee, additional fee or penalties for annual filing for private companies or LLP.

Fresh start scheme 2020 form page1 required for annual filing for private companies

Fresh start scheme 2020 form page2 required for annual filing for private companiesFresh start scheme 2020 form page3 required for annual filing for private companies

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