COMPANIES FRESH START SCHEME, 2020
FREQUENTLY ASKED QUESTIONS
1. If the forms filed are pending for approval as on 30.09.2020, then what happens?
A. 30th September 2020 is the deadline for filing the forms without any additional fees. Once the forms are filed under this scheme, the companies can file application for immunity from proceedings and penalties in respect to such forms once such forms are approved.
2. Disqualified directors. Can they become qualified after filing of forms by the company?
A. This scheme provides only for waiver of additional fee, immunity from prosecution and penalties. There are no procedural relaxations or waivers granted. So, disqualified directors can’t automatically become qualified under this scheme. They need to go through the regular procedure.
3. Irrespective of immunity, can every defaulting company can make delayed filing without any additional fee?
A. Yes. But it is beneficial for the companies to also apply for immunity, since there is no cost factor involved.
4. The scheme defines defaulting company as a company u/s 2(20). Does that mean foreign companies are excluded?
A. Companies u/s 2(20) don’t include Foreign Companies. However, the officials, in the webinar conducted by ICSI have clarified that the benefits under this scheme shall also extend to Foreign Companies.
5. Does it extend to non filing of DIR-3 KYC / DIR-3 KYC Web?
6. Can companies which are struck off by ROC for non filing of Annual returns be revived by filing them under the scheme?
A. Companies which are “Struck off” are specifically exempted from availing any benefits under the scheme. They cannot make any filings under this scheme. However, by filing an application with NCLT, if such companies can be revived during the pendency of the scheme, such companies can them avail benefits of the scheme.
7. Is there any limit on the date of default? Can immunity be sought for defaults continuing from any number of years?
A. No. There is no such limit. Default pertaining to and being carried forward from any number years can be made
8. In case proceedings for condonation of delay are already in progress, can the company get immunity from penalties?
A. This scheme is applicable only for filings which are made during the pendency of this scheme. If proceedings in relation to Condonation of Delay are already in progress, it means the forms would’ve been filed before the commencement of the Scheme. Therefore, this shall not be applicable. However, companies can make a request to the adjudicating authority to dispose of the application Condonation of delay without any penalty given the existence of the scheme.
9. Can immunity be sought for any forms filed prior to commencement of the scheme?
A. No. As mentioned in the Scheme, Immunity can be sought from proceedings and penalties only in respect of filing of forms pending during the scheme. Also, the immunity granted shall only be with respect to offence of delay in filing but not other offences/default.
10. Is it applicable to Nidhi Companies?
A. The Scheme is applicable to all the Companies defined U/s 2(20) of the Companies Act, 2013, including Private Companies, Public Companies, Nidhi Companies, Producer Companies, Section-8 (Charitable) Companies, Government Companies, OPCs, etc.,
11. When should the application for immunity be filed? Any deadline for filing such application? Any fees for such application?
A. Application for granting of immunity shall be filed after the expiry of the scheme in e-form CFSS-2020; The deadline for filing such application is 6 months from the date of expiry of the scheme, i.e., 31st March 2021.
12. Can the companies be exempted from filing the forms under this scheme?
A. No. The exemption in this scheme is only in relation to payment of additional fees, and immunity from proceedings and penalties so far as they relate to delay in filing the forms. Companies are not exempted from filings. This scheme eases the burden of fees and penalties, and facilitates completion of filings.
13. If all the directors are disqualified, can such companies file forms and make good the default under this scheme? Will the disqualification be removed on making good such defaults?
A. As mentioned above, no procedural relaxation is granted by the scheme. The Companies where all its directors are disqualified would again need to follow the same old process of adding a signatory through backend mode, by filing an application to ROC. Once any signatory is added, such signatory can sign and file all the necessary e-forms availing the benefits undee this scheme and make good such defaults.
Disqualification is not automatically removed on making good the default. The existing process for removal of disqualification must be followed by the Companies.
14. Does the scheme cover all the forms?
A. This form extends to all the forms including DIR-3 KYC, DIR-3 KYC Web, and INC-22A, except for the forms which are specifically mentioned in the scheme i.e., e-form SH-7 and forms in relation to Charges.
15. What is logic behind not extending this scheme to SH-7 and Charge forms?
A. There is no official clarification but from the views of the regulators, it may be assumed that non filing of SH-7 and Charge forms are serious & sensitive affairs and hence they are not covered by the scheme.
16. If a form is wrongly filed, can a Company nullify it, file it again and take relief under the scheme?
A. Act doesn’t provide anywhere for nullification. However Registrar does have inherent powers to take forms off the record. If the company can convince the registrar to take any form off the record, then such company can file the form again and take relief under this scheme.
17. If companies have recently filed pending forms with additional fee, can they apply for refund of additional fees?
A. No. There is no such provision of refund of fees.
18. Can the companies apply for immunity from penalties in relation to delayed filings which have been made good before the commencement of this scheme?
A. Immunity can be sought only in respect of filings made during the pendency of the scheme.
19. Is the granting of immunity, discretionary power of the Designated Authority (RoC)?
A. Yes, it definitely is a discretionary power of the ROC. But if the Companies comply with all the required conditions in relation to filings, then the ROC is bound to grant immunity.
Click here to access the copy of the Companies Fresh Start Scheme, 2020 : http://www.mca.gov.in/Ministry/pdf/Circular12_30032020.pdf