ICSI urges Relief under Companies Fresh Start Scheme, 2020 [Read Letter]

ICSI - Companies fresh start scheme - CS - Taxscan

The Institute of Company Secretaries of India (ICSI) has requested relief under the Companies fresh start scheme, 2020.

In the view of pandemic COVID-19 the Ministry of Corporate Affairs (MCA), has introduced a new scheme namely the Companies Fresh Start Scheme, 2020. The Scheme is applicable for the period from April 1, 2020, to September 30, 2020.

In the wake of the global pandemic, the said Scheme is a welcome step to provide an opportunity to the defaulting companies to make a fresh start by filing the belated documents under the Companies Act, 2013 with normal fees without the requirement of payment of additional fees. The Scheme intends to provide immunity from the launch of prosecution and proceedings for imposing a penalty on account of delay in filing of documents and is available only in respect of filings made during the period of Scheme as per the conditions mentioned therein.

However, the Scheme is silent where MCA had filed prosecution and such companies have subsequent to the said prosecution filed their documents, prior to the Scheme. The Scheme is not applicable to filings made with late fees prior to the enforcement of the Scheme. The above-said companies would have been saved from prosecution and also from the payment of additional fee, if they would not have filed the documents before the enforcement of the Scheme and filed under the Scheme, which would have saved them from the prosecution or if the prosecution was pending, the same would have been withdrawn.

Therefore, some of the companies may be put in a disadvantaged position as compared to others as the scheme does not provide immunity to companies that came first in compliance prior to the coming into force of the scheme. These companies as well as officers of the companies have already paid additional fees and further would be subject to penalty or prosecution as the case may be.

A Letter by ICSI said that the companies which have filed the documents prior to coming into force of Scheme may be extended the benefit of Immunity from prosecution and proceedings for imposing a penalty on account of delay.

The ICSI also requested the pending prosecution, if any against these companies be allowed to withdrawn.

To Read the full text of the Letter CLICK HERE