Any type of registered organisations are obliged to comply with several regulatory guidelines and documentary compliances. In the case of company form of organisation also the compliance requirements are very high like annual returns, financial statements filings, books of accounts and other business related documents or statements as required by the government. There are situations where the company fails to comply such requirements and become a defaulting company.
This situation will raise questions about the life of the company or will meet with heavy penalties. To give a relief for the same, the government through Ministry of Corporate affairs introduced the scheme to give relief to such defaulting companies. This window will be open from 1st April 2020 to 30th September 2020.
The CFSS 2020 provisions:
- The companies will be allowed to make their violations goods by paying the nominal fees for all the filing in MCA website and there will not be any surcharges.
- There will be exemptions from prosecution and proceedings for penalties applicable to the delayed filing of returns. No other case will be allowed to be raised and used.
- There are chances that the company might have preferred an appeal against any notice, order or complaint with regard to complaint on compliances, then
- The company should withdraw the appeal before enrolling under the scheme
- The concerned company should also furnish the copy of appeal withdrawal along with application.
- If the court has passed any order on which no appeal has been filed.
- (A) In such a case, the company is allowed the time period of 120 days to file the appeal.
- (B) Until then, no action will be taken against the non-compliant company (if it is related to delay in filing of returns).
- A company can file CFSS-2020 to avail of the benefits of the scheme:
- (a) The company will be immune until 6 months from the date of closure of CFSS 2020.
- (b) No fees are charged for filing Form CFSS-2020.
- (c) Immunity certificates will be granted to companies that have their registrations under the scheme.
- Immunity will be not given to the companies if:
- (a) An appeal is pending for the company.
- (b) If any disputes (related to the company) are pending with the court.
- For Financial year 2018-19 – Any person who has been allotted “Director Identification Number (DIN/DPIN)” on or before 31st March 2018 and the status of such DIN is ‘Approved’, needs to file form DIR-3 KYC to update KYC details in the system on or before 5th October 2018.
For Financial year 2019-20 onwards – Every Director who has been allotted DIN on or before the end of the financial year, and whose DIN status is ‘Approved’, would be mandatorily required to file form DIR-3 KYC before 30th September of the immediately next financial year.
After expiry of the respective due dates, system will mark all non-compliant DINs against which DIR-3 KYC form has not been filed as ‘Deactivated due to non-filing of DIR-3 KYC’.
- For DIN holders, the due date for filing DIR-3/DIR-3KYC has been extended by MCA. All the directors of the companies (DIN holders) can activate their DIN by filing the form between 1 April 2020 to 30 September 2020. Filings after the due date will attract a fine of Rs. 5000.
For the Non-Operative Firms:
The inactive or defaulting firms can also apply for CFSS 2020 and file their due compliance without any hassle. Apart from that, they can do below-mentioned tasks:
- Apply for Dormant Status u/s 455 of the Companies Act, 2013 by filing MSC-1 along with the prescribed charges.
- Apply for excluding the name of the company from the Register of Companies (ROC).
- Due dates of filing e-form ACTIVE extended till 30 September 2020. The firms liable must file the form on or before the due date else there is a fine of Rs. 10,000 per filing after the due date.
CFSS 2020 is Not Applicable if:
- The final notice for removing the company name from The Companies Act 2013 has already been issued by the concerned authority.
- If the company has already applied for removing the name of the company by filing STK-2 along with prescribed fees with Registrar of Companies (ROC).
- Companies have merged under some arrangement or compromise.
- Companies that are marked for the Corporate Insolvency Resolution Process or Liquidation.
- In any of the cases following are involved:-
– Increase in the Authorised Capital (Form SH – 7)
– Charge related documents (CHG – 1, CHG – 4, CHG – 8, CHG – 9)