In these testing times of the outbreak of the COVID-19 pandemic, businesses are the net sufferers. All companies are required to follow statutory compliances annually as per the provisions of the Companies Act, 2013. A company that fails to adhere to the compliances is called a defaulting company. Such companies are tagged as Non-Compliant by the government and subsequently, a penalty is levied by the Ministry of Corporate Affairs (hereby referred to as “MCA”) which would increase on a daily basis.
However, the good news is that the MCA has introduced the “Companies Fresh Start Scheme, 2020” (hereby referred to as “CFSS, 2020”) to provide relief to law-abiding companies in the wake of COVID 19. The CFSS, 2020 provides a one-time waiver of penalty for non-filings by the companies with the Registrar of Companies if all the pending annual documents are filed during the period starting from 1st April 2020 and ending on 30th September 2020.
The below-mentioned table shows the savings in the penalty if the benefit of the Scheme is taken by the defaulting companies:
| Sr. No. | Year of Incorporation | Savings in Penalty |
| 1 | 2015-16 | Rs. 6,14,800/- |
| 2 | 2016-17 | Rs. 3,47,000/- |
| 3 | 2017-18 | Rs. 1,52,200/- |
| 4 | 2018-19 | Rs. 30,400/- |
Kindly note that continuing businesses without filing such compliances will lead to the disqualification of all the Directors for 5 years. You will not be able to set up any new company, and existing companies will also be Struck off by the MCA. This will be in addition to the recovery of the penalty.
For professional guidance & to know more regarding the process and the Scheme, please do not hesitate to contact us at +91 9757135306 or at hitarth.sheth@bhaskara.in.