Companies Fresh Start Scheme
The Ministry of Corporate Affairs (MCA) has introduced a new program called “Companies Fresh Start Scheme ” to help companies do well in any failure to meet, regardless of the length of time, and make a fresh start as a fully compliant organization. This plan is similar to the LLP Settlement Scheme, 2022 – where a one-time opportunity was provided for all LLPs to formalize outdated compliance without any penalty.
All companies registered in India must submit an annual MCA return each year and financial statements. Companies that fail to do so will be fined Rs.200 per day for non-payment, the company will be fired and the directors will be fired.
At AK taxes, we can help you easily maintain your company compliance at a reasonable cost. To find out more about keeping company compliance, contact us
All existing companies that fail to comply with MCA rules and regulations may benefit from this program. This system will be operational from 1 April 2022 to 30 September 2022. During this time, the company can file all past compliance without any penalty, be protected from prosecution, and apply for sleep or apply for a strike. If compliance does not apply under this scheme by any later than 30 September 2022, the prosecution may be instituted by the Registrar of companies that violate the law as provided for under the Companies Act, 2013.
Any company that has violated the law and has not filed an annual return or other fulfillment of the MCA can use this system to file long-term default documents without paying a fine.
This program will NOT work on:
- Companies that are subject to the final notice of dismissal have been initiated by the MCA. You can check if a company is on strike by using a Master Data check on the MCA portal.
- The company has applied for a strike with the MCA and the application is pending.
- Companies grouped under a planning or merger plan.
- Companies that have applied for sleep deprivation.
- Destroying companies.
- Companies where authorized financial increases are involved or billing documents must be filed.
Immunity from Prosecution
The biggest benefit of getting the Companies Fresh Start Scheme 2022 program is non-prosecution. If the offending company pays the required amount and lodges an overdue compensation, protection from the prosecution or trial will be provided.
In order to seek protection against late documents submitted under the scheme, Form CFSS-2020 must be submitted within 6 months of the closing of the scheme and the submission of all expired returns. No government funds are used to complete the CFSS-2022 form.
Based on CFSS-2020 filing, the MCA will issue a security certificate under the Companies Fresh Start Scheme 2020. After granting protection, the Designated Authority will withdraw pending prosecution, if any, before the relevant courts and fines. Without the additional action of the MCA.
Immunity does not cover it
The protection provided under the Companies Fresh Start Scheme 2020 does not apply to:
- Any measures that affect the interests of any shareholder or any other person in relation to the company or its directors or key management persons.
- The matter of any complaint pending before a court of law and if there are disputes between the executives of the company is pending in any court of law or tribunal.
- A company in which a court has issued an injunction or a judgment order has been passed by a judicial officer and there is no recommended appeal against the orders before the scheme can be implemented.
Withdrawal of Prosecutions and Procedures
If the offending company lodges a complaint against any notice or complaint or order issued by a court of competent jurisdiction. Then such a company before applying for a certificate of immunity, withdraws the complaint and provides proof of withdrawal in the CFSS-2020 form.
If the officer approves the order fine and the deadline for lodging an appeal is between 1 March 2020 and May 31, 2020 – a further 120 days will be allowed for the appeal to be lodged. In overtime, non-compliance persecution would not be initiated by the MCA.
After the normal compliance process under this scheme, the company will be required to maintain compliance on a regular basis. AK TAXES offers compliance management at a very low cost. If the company does not wish to continue complying with the rules, it may apply for a sleep or a striking file.