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Many companies, especially start-ups, had to face financial crunch and unpredictability due to the Covid-19 pandemic. To help the country deal with the repercussions of a pandemic, the Indian government launched the CFSS scheme in 2020. The Companies Fresh Start Scheme (CFSS) aims to provide financial relief to entrepreneurs suffering from the adverse effects of the novel Covid-19.
Read on to know the provisions of the CFSS and its applicability in 2022.
The Companies Act 2013 laid down certain mandatory requirements for all registered companies. Breaching such policies makes companies liable for penalties. However, the CFSS is designed to offer relief to defaulting corporations.
It considers the disruptions caused by the Covid pandemic and provides immunity to companies failing to comply with notions of the Companies Act. Thus, this scheme includes all such institutions that have failed to follow statutory compliances. These statutes include annual returns, financial statements and audits, etc.
The CFSS aims to safeguard the rights and finances of business organisations, especially during the pandemic. The scheme has multiple provisions to subsidise defaulting entrepreneurs, which have been explained in the next sections.
Defaulting companies who have applied for CFSS must submit applications for dormant status by filling e-Form MSC-1. These companies can file applications for unsubscribing from the Register of Companies. Plus, these companies are also liable for obtaining ACTIVE non-compliant status without paying the application fees.
The applicability of CFSS form is subject to certain conditions. CFSS applies to all institutions that fail to file annual returns and financial statements with the company register. The clause includes documents like AOC-4, AOC-4 XBRL, AOC-4 CFS and Form MGT-7.
The scheme is also applicable for those institutions that could not file Form MGT-14, ADT-1, Form DPT-3, Form DIR-12, Form – 20A, etc.
However, this scheme does not apply to companies struck off from the company register. Firms that have already applied for subscribing out of the register are also not applicable for this scheme.
The CFSS scheme is not applicable for firms that have joined or merged with other firms, have turned dormant or filed for the corporate insolvency resolution process. Vanishing companies or those that have filed for CHG-1, CHG-4, CHG-8 and CHG-9 are also not eligible for this scheme.
Interested parties were asked to file their overdue documents and pay the regular fees before September 30 2022. A designated authority will send the immunity certificate within a specific time. However, please note that one cannot avail of the benefits of the CFSS scheme presently because the last date for submitting applications was December 31 2020.
Interested parties were asked to file their overdue documents and pay the regular fees before September 30 2022. A designated authority will send the immunity certificate within a specific time. However, please note that one cannot avail of the benefits of the CFSS scheme presently because the last date for submitting applications was December 31 2020.
No, LLP partners cannot partake in the CFSS scheme. However, they can take help from an LLP settlement scheme 2020 that offers the same benefits.
No, LLP partners cannot partake in the CFSS scheme. However, they can take help from an LLP settlement scheme 2020 that offers the same benefits.
Deactivated directors can file DIR-3 KYC e-from without any fees. However, such directors must not have faced disqualification under Section 164 of the Companies Act 2013.
Deactivated directors can file DIR-3 KYC e-from without any fees. However, such directors must not have faced disqualification under Section 164 of the Companies Act 2013.