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Golden opportunity for Companies and LLPs to complete their pending compliance at reduced penalties. At present, these businesses are incurring a daily penalty on these due filings. This is a chance to clear those dues at a much reduced rate and revive or close the business at a go.

 

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Frequently Asked Questions

1) I have a Private Limited Company which has been incorporated in the year 2018. My first annual filing was due in the year 2019 but for certain reason I missed the annual filing and now I am told I have to pay a penalty of INR 100 per day. Under this scheme can I file the requisite forms without the payment of additional fees?

Yes, according to the new Companies Fresh Start Scheme, 2020, a Private Limited Company which has defaulted to file belated documents can opt for this scheme. Therefore, you can file the pending annual filing forms without any additional fees.

2) What is Form CFSS 2020?

This is the Form that needs to be filed after all the requisite filings are done so as to get immunity from prosecution for any default that has been caused in this regard. Hence, at first every defaulting company needs to file the pending forms and within six months from the end of the scheme they need to file the form CFSS 2020 along with the SRNs of all the pending forms that has been filed so that the Ministry can take cognizance of the same and provide immunity in regards to the delayed filing.

3) I have a Pvt Ltd company and have not filed PAS-3 for the allotment of shares, but have utilised the money. Does the scheme cover both the penalty amount for late filing of form PAS-3 as well as the penalty for utilization of money without filing form PAS-3?

No, the scheme clearly states that the immunity shall only be available in respect of the late filing of the form ie PAS-3 and will not provide immunity in respect to utilization of money prior to filing of the form PAS-3.

4) I have an inactive company. Can I directly file for closure under Companies Fresh Start Scheme, 2020?

No, the company has to file their Annual return and then apply for closure. However, there are underlying benefits for the Company under this scheme. An Inactive defaulting Company while filing pending form under this scheme can simultaneously apply for following: – Apply for dormant company u/s 455 or – Apply for Strike off u/s 248 without paying any additional fees in regards to the Annual Filing. For companies who have been inactive from 2017 and have not done the Filing this can be huge breather as they will be saving more than INR 2,
00, 000 in Government Fees if they are taking help of the scheme.

5) I have got the Final notice under Section 248 of Companies Act, 2013 from the ROC. Can I take the benefit of the Scheme?

No, this scheme shall not be applicable to those companies against which action for final notice for striking off the name u/s 248 of the Act has already been initiated by the designated authority. However, if the Company has received a show cause notice and not the Final Notice then the Company can take the benefit of the same.

6) On March, 2019 I increased my Authorized Share Capital from 1,00,000 to 10,00,000. However, I did not file SH-7. Can I take the help of this scheme and pay only G.Fees and not the Additional Fees?

No, the scheme clearly states that it is not applicable on compliance like increase in Authorized share capital of the company, therefore the company will have to pay the government fee as well as the additional fees.

7) I understand that I do not have to pay Additional Government Fees. However, what about penal consequences on the director/company. Will I get any immunity on that too?

Yes, if a liability arises on the director/company for not filing of a particular form and the Company take help of the scheme and makes the default good then there will be no penal consequences against the company as well as the directors of the company.

8) I haven’t been able to file Form – INC 20 A which is for commencement of business and needs to filed within 6 months from Incorporation. Will I get the benefit of this scheme?

There is a ambiguity over here as INC 20A is under Companies (Incorporation) Rules 2014 and CFSS is guided by Companies Act 2013 and Companies (Registration Offices and Rules) 2014. However if we look closer to the scheme we will find that it clearly states that it is not applicable only in below cases-
– those companies who have received final notice of strike off u/s 248
– those companies who have already applied for strike off
– amalgamated companies
– dormant companies
– vanishing companies
– in case of increase in authorized share capital of the company
– filing related to creation of charge
So, referring the above, one can imply that he should get the benefit of the scheme and make the default good if they file INC 20-A within this period. However, a clarification from the Ministry should help to resolve all ambiguity in this regard.

9) What is the Government Fee for filing Form CFSS 2020 and till when is the scheme valid?

This is no filing fees for the Form CFSS 2020 which needs to be done within 6 months from the date of end of the Scheme. The Scheme shall conclude on 30th September, 2020.

10) Penalties are imposed by the adjudicating authority on my company for delayed filing of a return and due to the ongoing situation my company has not been able to file any appeal regarding this before Regional Director u/s 454(6). Can I avail any benefit under CFSS?

If the last date date of filing appeal against the order imposed by the adjudicating authority under 454(6)falls between 1st March,2020 to 31st May,2020 then under this scheme, additional 120 days shall be allowed from last day to all the companies and their officers to file the appeal before Regional Director and during such additional period the prosecution under 454(8) shall not be initiated against those companies.

11) What is LLP Settlement Scheme 2020?

LLP Settlement Scheme 2020 is an amnesty scheme notified by the Ministry of Corporate Affairs, Govt. of India, on 4th March 2020 which would grant defaulting LLP a one-time relaxation in penalty and additional fees for filing of pending annual returns and other applicable documents within a given time frame.
This was further modified on 30th March 2020 which would come into effect from 1st April 2020 and would remain in force till 30th September 2020.

12) What is the time frame of this Scheme?

As per the cicular dated 4th March 2020, issued by the Ministry of Corporate Affairs, Govt. of India, this scheme shall come into force on 16th March 2020 and shall be valid till 13th June 2020.
However, as per notification dated 30th March, the scheme has been modified and the modified LLP Settlement Scheme 2020 shall come into effect from 1st April 2020 and remain in force till 30th September 2020.

13) When was the LLP Settlement Scheme 2020 notified by the Govt.?

The Scheme was notified by the Ministry of Corporate Affairs, Govt. of India, on 4th March 2020. This has been further modified on 30th March 2020.

14) Is it applicable to all the LLP?

No, the LLP Settlement Scheme 2020 can be availed only by the defaulting LLP.

15) Who is a defaulting LLP?

Any LLP which has not filed Form 11, Form 8, Form 3, and Form 4 for any of the financial years and as and when applicable shall be considered as a defaulting LLP.

16) Does it affect my LLP in any way if I have filed all my Form 8 and Form 11 within due dates?

If your LLP has duly filed Form 8 and Form 11 within the due dates, it shall not affect your LLP. However, it has to be confirmed if the LLP has also complied with Form 3 and Form 4 as and when applicable. In case, the filing of Form 3 and Form 4 are applicable, the LLP should avail the facility of the LLP Settlement Scheme 2020. Please check this with your consultant.

17) My LLP has complied with all the filings for all the financial years; however, Form 11 was not filed for FY 2012-13. Should I avail the benefit of the Scheme?

Any LLP which has not complied with any of the returns or filing of documents for any of the financial years till 31st August 2020 may avail the benefit of the Scheme.

18) My LLP has not filed the Income Tax Return for the last two years. Will the LLP Settlement Scheme help me?

The LLP Settlement Scheme is restricted to the filings required under the LLP Act 2008. If the LLP has not filed the Income Tax Return it cannot avail the LLP Settlement Scheme as filing of Income Tax Return is guided by the Income Tax Act.

19) What is the additional fee normally applicable in case of a default in filing?

Any LLP which has defaulted in filing of returns and documents as required under the LLP Act 2008 is required to pay a delayed penalty of Rs.100 per day per form after the due date till the default is made good. For example, an LLP which has defaulted in filing of Form 11 for 365 days shall pay an additional fee of Rs.36500 as a penalty.

20) How are things and fees different in case of the LLP Settlement Scheme 2020?

The Scheme would allow a defaulting LLP to complete the filings with an additional fee of Rs.10 per day per form up to a maximum of Rs.5000 per form as an additional fee which shall be effective till 31st March 2020.
And as per the modified LLP Settlement Scheme 2020, the Ministry has given relief in terms of total additional fees which shall be valid till 30th September 2020,

21) What are forms which are allowed to be filed under the LLP Settlement Scheme 2020?

Form 11, Form 8, Form 3, and Form 4 are allowed to be filed under the LLP Settlement Scheme 2020.

22) When is Form 11, Form 8, Form 3, and Form 4 required to be filed?

Form 11 is filed for Annual Return of LLP
Form 8 is filed for Statement of Account & Solvency (Annual or Interim)
Form 3 is filed for filing Information with regard to LLP agreement and changes, if any
Form 4 is filed for Notice of appointment, cessation, change in name / address / designation of Partner / Designated Partner, and his consent to become a Partner / Designated Partner, etc.

23) I have an LLP that is inoperative and has not filed the statutory returns and documents except Income Tax Return. Now I wish to close the LLP. Can I do so?

No, before an LLP can file for closure it has to first close all the statutory filings required under the LLP Act 2008.

24) If I avail the one-time relaxation under the LLP Settlement Scheme 2020, will I still be prosecuted?

No, if a defaulting LLP has filed the pending documents till 30th September 2020 and made good the default, it shall not be subject to any further prosecution.

25) I have already filed for the closure of my LLP which is pending approval for the last 6 months; do I need to avail the benefit of the LLP Settlement Scheme 2020?

The LLP Settlement Scheme 2020 shall not apply to LLPs which have made an application in Form 24 to the Registrar, for striking off its name from the register as per provisions of Rule 37(1) of the LLP Rules, 2009.

26) Will the Partners / Designated Partners be prosecuted if they have failed to comply with the filings as required under the LLP Act 2008?

Yes, an LLP which has failed to comply with the statutory requirements under the LLP Act 2008 shall be liable to be prosecuted in case of a default.

27) What will happen if I do not avail the LLP Settlement Scheme 2020 till 30th September 2020?

Upon the conclusion of the time frame given under the LLP Settlement Scheme 2020, the Ministry of Corporate Affairs may take necessary legal action under the LLP Act 2008 and all the defaulting parties shall be subject to prosecution in case of default.

28) Will there be any immunity granted to a person who has failed to avail the LLP Settlement Scheme 2020 due to medical reasons?

There is no such circular or notification in this regard as to what would happen in case of failure to avail the scheme due to medical reasons. Hence, the last date to avail the LLP Settlement Scheme 2020 is 30th September 2020.

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