Companies Fresh Start Scheme 2020 Extended Until 31 December 2020

The Ministry of Corporate Affairs (MCA) has decided to continue providing the opportunity of doing business with ease for a longer period. That is the ministry has extended the due date for several schemes until the end of the year 2020 due to the turbulence caused by the pandemic. This is as stated in the General Circular No.30/2020 F.No. 02/01/2020-CL-V.

The Companies Fresh Start Scheme 2020, which was valid from 1 April 2020 until 30 September 2020, will now be extended as well. The scheme was introduced to enable companies to clear their prior defaults.

Other schemes, such as the time for conducting Extraordinary General Meetings (EGMs) via video conference, the time for form filing to create or modify charges under the Companies Act, 2013, and the LLP Settlement Scheme 2020, have also received a due date extension. 

The LLP Settlement Scheme provides a one-time relaxation to LLPs that have missed filing the statutory documents within the due date. The LLPs opting for this scheme need not pay additional fees. A considerable number of LLPs have defaulted, resulting in the electronic registry being out-of-date.

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However, all companies must comply with statutory regulations, such as annual returns, financial statements, forms, documents, and other statements every year. In the case of non-compliance, penalties and fines may be imposed. A company that fails to adhere to these regulations will be labelled as a defaulting company. 

With COVID-19 disturbing the flow of the world, the Ministry of Corporate Affairs introduced the Companies Fresh Start Scheme (CFSS) as a way of providing comfort to the operations of companies. Now, the due date for the scheme has been extended until 31 December 2020. 

You must note that the CFSS 2020 will not be applicable in case the final notice of striking off the company name as per the Companies Act, 2013, has already been initiated by the concerned authorities.

For any clarifications/feedback on the topic, please contact the writer at apoorva.n@cleartax.in

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