No blanket extension for Companies Fresh Start Scheme

In April 2020, the Ministry of Corporate affairs introduced a scheme that was called “Companies Fresh Start Scheme, 2020” under which the defaulting companies were given a chance to complete compliance and file all the annual filing forms without any late fees or penalties.

Earlier the scheme was meant to be concluded on 30th September, 2020. However, this date of conclusion was extended twice and the CFSS 2020 was finally concluded on 31st December, 2020.

However, due to the current pandemic, a lot of representations were made for the extension of the CFSS 2020 scheme infect the protests were made outside the Registrar of the Companies for the extension of the CFSS 2020 scheme.

The government also received the representations wherein the requests were made for relief as some companies had preferred appeals under section 252 of the Act against the orders of striking off the names of the companies before the respective Bench of the NCLT (National Company Law Tribunals) and the orders by NCLT Benches were issued during December, 2020.

Now the MCA has notified that there will be no blanket extension in the overall Companies Fresh Start Scheme, 2020.

MCA ruled out the blanket extension of CFSS 2020

• The Ministry explained that the amnesty scheme would lose its purpose if a blanket extension were to be granted to all the firms.
• Hence, the MCA has ruled out a blanket extension of the scheme despite protests outside Registrar of Companies (RoC) offices across the country seeking an extension, said a government official.

Condonation of delay on case to case basis

• The Ministry of Corporate Affairs will allow late applications for the Companies Fresh Start Scheme (CFSS) on a case-to-case basis.
• For the companies who had filed an appeal against the orders of striking off the names of the companies and orders by NCLTs were issued during the month of December, such companies may get the benefit of waiver of late filing fees.
• The government notified the Scheme for condonation of delay for companies restored on RoC between 1 December, 2020 and 31 December, 2020 under section 252 of the Companies Act, 2013.
• The Scheme shall be applicable in respect of companies in respect of whom the appeal filed under section 252 of the Act with the respective NCLT Bench for the restoration of the name of the company was disposed of between December 1, 2020 to December 31, 2020, with an order for restoration of the company.
• The Scheme shall be applicable in respect of filing of all e-forms except where any increase in authorized capital is involved (e-Form SH-7) and in filing of charge related documents (e-forms CHG-1, CHG-4, CHG-8 and CHG-9) which are required to be filed with the Registrar.
• The last date for filing of any overdue e-forms by such restored companies under the scheme shall be 31st March, 2021.

Further the ministry stated that there is merit in certain representations it received from stakeholders but felt that the pandemic was not a reasonable excuse for delays in filings that should have been completed by December 2019 and earlier. So the Scheme for the Condonation of delay will only be available for the companies restored by the NCLT between 1st December, 2020 to 31st December, 2020.

Important note: It is mandatory for the companies who have opted for the Companies Fresh start Scheme, 2020 for their Company Annual FIling, needs to file Form CFSS 2020 to get the immunity certificate from the MCA. The Form CFSS 2020 needs to be filed before 30th June, 2021.