Indian Government announced another regulatory relief for the companies registered in India. The government has introduced a fresh scheme i.e. Companies Fresh Start Scheme, 2020 to make a fresh start on a clean slate.
Under this scheme, corporate of India can file their pending documents such as Annual Return and Financial Statements without paying higher additional late fees. Adding to the Companies Fresh Start Scheme, the MCA has also introduced LLP Settlement Scheme to give relief to Limited Liability Partnerships.
“The Fresh Start scheme and modified LLP Settlement Scheme incentivize compliance and reduce compliance burden during the unprecedented public health situation caused by COVID-19,” said a statement by the Ministry of Corporate Affairs (MCA).
The Ministry of Corporate Affairs (MCA) by its Circular 12/2020 dated 30.3.2020 issued Companies Fresh Start Scheme 2020 with following points:
- Under Companies Fresh Start Scheme, 2020 companies are permitted to file of their all pending Returns, Statements, and documents which they failed to file for any number of years.
- Returns or form including Annual Returns and Financial Statements and which is governed under section 403 of Companies Act, 2013 can be filed with effect from 1st April 2020 to 30th September 2020 at a nominal fee as prescribed under The Companies (Registration and Office) Rules, 2014.
- It applies to all companies including both public or private who failed to file all returns statements or Documents including Annual Return remain for any number of years as on the due date of filing.
- No late fee or penalty or prosecution will apply only normal fees will be payable.
- Companies Fresh Start Scheme, 2020 shall not apply to those companies against whom final notice under Section 248 has been given by ROC for striking off or who applied for striking off or applied for being declared dormant co; vanishing company or dormant company or companies under CIRP.
- Companies whose name struck off cannot avail this scheme and have to get their name restored.
- Companies can avail this scheme for the purpose of:
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- Getting themselves dormant under Section 455
- Getting their name struck off
- After payment of normal fees and documents return statement is taken on record, an application shall be filed electronically (without any fees) for obtaining Immunity Certificate but it shall not be filed beyond six month from the date of expiry of scheme.
- Companies Fresh Start Scheme, 2020 grants immunity against filing of forms returns and documents but not against any punitive action being done by the company for which suitable can be taken by ROC. For example immunity in delaying in filing return of allotment but not against any illegalities committed in allotment of shares.
The Schemes, gives golden opportunity to the corporate to file their all pending or apart from giving longer timelines for corporate to comply with various filing requirements under the Companies Act 2013 and LLP Act, 2008, significantly reduce the related financial burden on them, especially for those with long standing defaults, thereby giving them an opportunity to make a “fresh start”.
