Companies Fresh Start Scheme 2020

Ministry of Corporate Affairs recently notified a scheme Companies Fresh Start Scheme where in defaulting companies have been provided with a golden opportunity to start with a fresh slate by updating all pending returns by paying just the normal fees and getting immunity to penal provisions provided in the act for such default in filings. The scheme also provides a one-time opportunity for defaulting companies to apply for dormant status or even apply for closure via the STK route after clearing off all defaulting returns.

What does the Companies Fresh Start Scheme 2020 offer?

The notified scheme offers a one-time opportunity to:

  1. File pending ROC returns without late fees
  2. Be immune against proceedings for default in filings
  3. Apply for Dormant Status by any inactive company
  4. Apply for Closure by any defaulting company

Who can take advantage of Companies Fresh Start Scheme 2020 ?

Defaulting Companies registered under Companies Act including:

  • Private Limited Companies
  • One Person Companies
  • Limited Companies
  • Section 8 Companies
  • Nidhi Companies
  • Producer Companies

Are Limited Liability Partnerships covered under Companies Fresh Start Scheme 2020 ?

No, LLPs are not covered under this scheme but the good news is that there is a similar scheme announced by the Ministry of Corporate Affairs called the LLP Settlement Scheme 2020 which gives LLP similar options.

Companies Fresh Start Scheme, All About Companies Fresh Start Scheme 2020

What doesn’t this scheme cover?

Following pending returns cannot be filed via this scheme:

  • Pending Returns relating to change of Authorised Capital
  • Pending Returns relating to Creation/Alteration of Charge

Who cannot avail this scheme?

Following companies cannot avail options under this scheme

  • Companies which have received Final Notice for Strike off
  • Companies which have applied for Strike off
  • Amalgamated Companies
  • Dormant Companies or Companies applied for Dormant Status
  • Vanishing Companies

Application for Immunity cannot be filed in the following cases:

  1. For companies having appeal pending before Court of Law or Pending Management Disputes before any court or tribunal.
  2. In case where any conviction order has been passed for any matter or any order imposing penalty has been passed.

How to take advantage of this scheme?

We recommend every company which had defaulted in filing of Annual Returns or Financial Statements in the past to use this scheme to clear all the pending filings by paying the normal Government fees. This scheme is not just useful for companies with pending returns but also for companies which wanted to close their company, since a lot of Registrars were not allowing defaulting companies for closure without clearing all pending returns and many of them were caught up in loop because the late fees for clearing pending returns were massive. So companies which want to apply for closure can also take advantage of this opportunity.

I had not file DIR3 KYC and my DIN is deactivated, can I file DIR 3 KYC without being subject to late fees ?

Yes there won’t be any late fees for filing DIR 3 KYC to activate you Director Application Number.

I had not filed ACTIVE and my company status is Active Non-Compliant, can I file ACTIVE Form without being subject to late fees ?

Yes there won’t be any late fees for filing INC22A ACTIVE to make your company ACTIVE Compliant.

Till when is this Scheme open?

The scheme shall remain open from 1st April 2020 to 30th September 2020

Want to file your pending returns? Having any queries for the same?

Call/Whatsapp us at +91-7008804070 and ask for expert assistance.