MCA’s Companies Compliance Facilitation Scheme, 2026: A Time-Bound Opportunity to Reset Your Compliance Record

Every year, thousands of Indian companies — startups that pivoted, subsidiaries whose parent lost focus, MSMEs that simply could not keep up — quietly fall behind on their annual ROC filings. And every day they stay behind, the meter runs: since 1st July 2018, a delayed annual return or financial statement attracts an additional fee of ₹100 per day, per form, with no upper limit. A company three years behind on AOC-4 and MGT-7 can owe several lakhs in additional fees alone — before a single penalty is adjudicated. For many, the arrears grew so large that compliance stopped feeling affordable at all. The Ministry of Corporate Affairs has now done something it does rarely, and never for long: it has opened a window to wipe most of that slate clean.

Through General Circular No. 01/2026 dated 24th February 2026, the MCA has launched the Companies Compliance Facilitation Scheme, 2026 (CCFS-2026) — a one-time relief scheme, issued under Section 460 read with Section 403 of the Companies Act, 2013, that lets defaulting companies regularise years of pending filings by paying just 10% of the accumulated additional fees, lets inactive companies obtain dormant status at half the fee, and lets defunct companies exit the register at a quarter of the strike-off fee — with conditional immunity from penalties under Sections 92 and 137. This guide explains every pathway, every covered form, the legal fine print most summaries miss, and exactly what directors should do before the window closes. Because when it closes, the circular itself says what comes next: the Registrars of Companies will move against every company that stayed in default.

1. Why CCFS-2026 Exists — and Why It Matters

The Companies Act, 2013 requires every company — active or not, profitable or not — to file its Annual Return (Section 92) and Financial Statements (Section 137) with the Registrar of Companies each year. Filing fees are governed by Section 403 read with the Companies (Registration Offices and Fees) Rules, 2014, and since 1st July 2018 the additional fee for delayed annual filings has been a flat ₹100 per day per form, without any ceiling.

The arithmetic of that rule is unforgiving. A single form delayed by one year accumulates roughly ₹36,500 in additional fees; delayed by three years, over a lakh. A typical private company files at least two annual forms a year (AOC-4 and MGT-7), so a company that stopped filing three years ago faces additional fees running into several lakhs of rupees — often more than its paid-up capital. On top of the fees sit the penalty provisions: adjudication under Sections 92(5) and 137(3) can add penalties of up to ₹2,00,000 on the company and up to ₹50,000 on each officer in default, per section, per year. Many defaulting companies concluded — rationally, if unhappily — that the cost of coming clean had become prohibitive, and simply stayed in default. The corporate registry drifted further from reality with every passing year.

CCFS-2026 is the MCA’s answer: a time-bound amnesty that makes coming clean affordable again. The circular states its twin purposes plainly — to improve compliance levels so the MCA-21 registry reflects accurate, up-to-date information, and to help inactive or defunct entities move to dormancy or closure at reduced cost. It follows the tradition of CFSS-2020 (the COVID-era settlement scheme), but with a cleaner design: no separate amnesty application form is required. You simply file the eligible forms within the scheme window, and the system applies the concessional fee. For company directors, foreign subsidiaries with neglected Indian entities, MSMEs, and startups carrying old defaults, this is the single most valuable ROC compliance waiver in years — and it is strictly temporary.

2. The Window: Key Dates and the Extension to 31 August 2026

The scheme’s timeline has three dates every director should know:

• 24 February 2026 — General Circular No. 01/2026 issued, announcing CCFS-2026.
• 15 April 2026 — the scheme becomes operative on the MCA-21 portal. Filings made from this date attract the concessional fee structure.
• 15 July 2026 — the original closing date, now superseded: through General Circular No. 03/2026 dated 8 July 2026, the MCA extended the scheme’s validity up to 31 August 2026, after disruption to the MCA-21 portal linked to data-centre issues left companies unable to file in the final stretch of the original window.

3. The Three Pathways Under CCFS-2026

The scheme recognises that defaulting companies are not all in the same situation. Some are alive and want to catch up; some are inactive but want to stay on the register cheaply; some are dead and want a dignified exit. CCFS-2026 offers each a route:

Pathway 1 — Regularise pending annual filings at 10% of additional fees

This is the headline relief. A company with pending annual returns or financial statements files the overdue e-forms during the scheme window and pays the normal statutory filing fee in full, plus only 10% of the additional (late) fees that would otherwise apply — an effective waiver of 90% on the additional-fee component, however many years the default spans. A company whose accumulated additional fees stand at ₹4,00,000 pays ₹40,000; the remaining ₹3,60,000 is condoned. Crucially, filing under this pathway also opens the door to immunity from penalty proceedings under Sections 92 and 137, subject to the conditions examined in Section 6 below. This route suits every company that intends to keep operating — including foreign subsidiaries whose Indian entity fell behind while decisions were awaited from headquarters.

Pathway 2 — Transition to dormant status via Form MSC-1 at 50% fee

Some companies are inactive but worth preserving — they hold a brand, a licence, land, or simply the option of future revival. Section 455 of the Act lets such an entity be declared a dormant company, remaining on the register with minimal ongoing compliance (a single annual return of dormancy, no full-scale annual filings). Under CCFS-2026, the application in e-form MSC-1 can be made at half the normal filing fee. For a foreign group holding an Indian shell it may reactivate later, or a founder parking a venture between chapters, dormancy at concessional cost is often smarter than either continued default or outright closure.

Pathway 3 — Exit via strike-off in Form STK-2 at 25% fee

For genuinely defunct companies — no business, no assets worth preserving, no intention of revival — the scheme discounts the exit. An application for striking off the company’s name under Section 248(2), filed in e-form STK-2 during the scheme window, requires payment of only 25% of the prescribed filing fee: against the normal ₹10,000, the CCFS rate works out to ₹2,500. The substantive conditions for strike-off still apply in full — extinguishing liabilities, board and shareholder approvals, the statement of accounts, and directors’ affidavits and indemnities — but the cost of a clean, legal exit falls to a quarter. This is decisively better than abandoning the company and waiting for the ROC to strike it off suo motu, which carries director-disqualification consequences that follow the individuals into their next ventures.

4. Forms Covered — 2013 Act and Legacy 1956 Act

CCFS-2026 is deliberately focused on annual-cycle filings. The circular enumerates the eligible e-forms:

Three observations matter here. First, the inclusion of the 1956 Act forms means even companies whose defaults reach back beyond a decade — into the old regime — can regularise their entire history in one window. Second, the inclusion of FC-3 and FC-4 extends the scheme beyond Indian companies to foreign companies operating in India through branch, liaison or project offices whose Indian filings lapsed — a category of default that is common and usually discovered only during remittances or closures. Third, and by way of limitation: event-based forms are not covered. Charge filings, allotment returns (PAS-3), director changes (DIR-12), DPT-3 and the like remain outside the scheme, as do LLPs altogether — the scheme applies only to companies under the 2013 and 1956 Acts.

5. Who Can Use the Scheme — and Who Cannot

The scheme is open to companies registered under the Companies Act, 2013 or the erstwhile 1956 Act with pending eligible filings — private companies, OPCs, small companies, public companies, Section 8 companies, producer companies, NBFCs (for their AOC-4 variants), and foreign companies for FC-3/FC-4. The circular carves out five excluded categories:

• Companies against which the final notice for striking off under Section 248(1) has already been initiated by the ROC;
• Companies that have already filed STK-2 seeking their own strike-off;
• Companies that have already applied for dormant status;
• Companies amalgamated or dissolved under a scheme of arrangement; and
• Vanishing companies (listed-company promoters who disappeared with public funds — a defined regulatory category).

A company under ROC-initiated strike-off proceedings that wishes to survive must therefore first address those proceedings — the scheme is not a shield against an exit already in motion. Everyone else with eligible arrears is in.

6. The Immunity Fine Print: Sections 92, 137 & the Section 99 Gap

This is the part most summaries gloss over — and the part on which real money turns. Paying 10% of additional fees settles the fee; the separate question is what happens to penalties.

What the immunity covers

For annual-return and financial-statement defaults, the scheme invokes the proviso to Section 454(3): where the company completes its filing under CCFS-2026 either before the adjudicating officer issues a notice, or within 30 days of such a notice, the proceedings under Section 92 or Section 137 stand concluded and no penalty is imposed — on the company or its officers. For the other covered forms — ADT-1, FC-3, FC-4 and the legacy 1956 Act forms — filing under the scheme likewise protects against prospective prosecution or show-cause action for the delay.

What it does not cover

• Adjudication already concluded. If an adjudication order imposing penalties has already been passed, or the 30-day post-notice window has lapsed, those penalty liabilities survive the scheme. CCFS-2026 condones fees going forward; it does not reverse orders already made.
• The AGM default itself — Section 99. Here is the nuance that catches companies out. Financial statements are adopted at the Annual General Meeting; a company that has not filed for three years has usually also not held its AGMs. Failure to hold the AGM is an offence under Section 96 read with Section 99 — punishable with fines on the company and every officer in default of up to ₹1,00,000, plus ₹5,000 per day of continuing default — and CCFS-2026 grants no immunity for it. The AGM default must be handled separately (through compounding under Section 441, or where appropriate an application regarding the meeting), even as the filings themselves are regularised under the scheme. Directors should walk into the scheme with clear advice on this exposure, not discover it afterwards.
• Everything outside the listed forms. Defaults in event-based filings, deposits, charges, KYC and the rest remain governed by the normal regime.

7. Practical Hurdles: UDIN, Prior-Year Accounts & Board Approvals

The concession is financial; the work is real. A company three years in default cannot simply log in and pay 10% — it must first produce what was never produced. The practical sequence, and where it snags:

• Prior-year financial statements must be prepared and audited — year by year. Accounts for FY 2022-23, 2023-24 and 2024-25 must each be compiled from the books, audited, and signed. If the books themselves are incomplete, reconstruction from bank statements, GST returns and invoices comes first. This is the true timeline driver — audits of three back years cannot be conjured in a weekend.
• The auditor chain must be valid. If ADT-1 was never filed for the relevant years, the auditor’s appointment trail needs regularising (ADT-1 is itself a covered form) before the audit reports sit on solid ground.
• UDIN discipline. Every audit report and professional certification carries a Unique Document Identification Number generated by the auditor/professional on the ICAI portal at the time of signing — UDINs cannot be casually backdated, so the signing and certification of prior-year documents must be genuinely sequenced now, with dates that align across audit reports, board approvals and e-forms. Mismatched dates across this chain are a classic resubmission trigger.
• Board and shareholder approvals in the right order. Each year’s accounts must be approved by the board, then laid before and adopted by the members — which for missed years means convening the overdue general meetings (with the Section 99 exposure noted above handled in parallel). The board minutes, notices and resolutions for every year must exist and be internally consistent.
• Directors’ digital signatures and DINs. Expired DSCs must be renewed; if any director’s DIN has been deactivated (for KYC default) or the director stands disqualified, that must be resolved first — a form cannot be signed by a signatory the system rejects.
• Sequencing on the portal. Forms are filed year-wise and in logical order (ADT-1 → AOC-4 → MGT-7 for each year), with the concessional fee computed by the system inside the window. Filing errors or resubmission cycles late in August risk running past 31 August — another argument for starting immediately.

8. Normal Regime vs CCFS-2026: The Comparison

9. What the Savings Actually Look Like

Take a realistic case: a private limited company that last completed its annual filings for FY 2021-22 and has AOC-4 and MGT-7 pending for FY 2022-23, 2023-24 and 2024-25 — six overdue forms with delays ranging from roughly two-and-a-half years to a few months. At ₹100 per day per form, its accumulated additional fees sit somewhere in the region of ₹2.5–3.5 lakh (the exact figure depends on each form’s due date). Under CCFS-2026, the company pays the normal fees plus roughly ₹25,000–35,000 in additional fees — and, filing before any adjudication notice, faces zero penalties under Sections 92 and 137, where the normal regime could have layered on penalties reaching several lakhs more across the company and its officers, per section, per year. Add the professional costs of preparing three years of audited accounts, and the all-in cost of a complete compliance reset still lands at a fraction of the statutory exposure it extinguishes. That is the entire proposition of CCFS 2026 in one paragraph: the MCA relief scheme has, temporarily, made honesty the cheapest option available.

10. A Step-by-Step Action Plan for Directors

1. Pull the company’s ROC status today. Obtain the master data and filing history from the MCA portal and list every pending form, year by year — AOC-4 variants, MGT-7/7A, ADT-1, FC-3/FC-4, and any legacy 1956-Act forms. Check simultaneously for any strike-off notices, adjudication notices, director disqualifications or deactivated DINs. This compliance audit is the foundation of everything else.
2. Decide the pathway. Continue (Pathway 1), preserve dormant (Pathway 2), or exit (Pathway 3) — a board-level decision, taken with advice, in the first week, not the last.
3. Reconstruct and close the books for each pending year. Bank statements, GST and TDS data, invoices — whatever it takes to produce year-wise accounts an auditor can sign.
4. Regularise the auditor chain and complete the audits. Appointments confirmed (ADT-1 where pending), audits conducted year-wise, reports signed with valid UDINs, dates consistent across the chain.
5. Hold the approvals in sequence. Board meetings to approve each year’s accounts; the overdue general meetings convened for adoption; the Section 99 exposure for missed AGMs addressed in parallel through compounding advice.
6. Renew DSCs and fix signatory issues before filing week, not during it.
7. File year-wise, oldest first, well before the deadline. Verify the system computes the concessional CCFS fee, pay, and preserve every challan and acknowledgement as proof of filing within the scheme.
8. Close the loop. Confirm each form is approved (not merely submitted), respond to any resubmission remarks immediately, and — for Pathways 2 and 3 — file MSC-1 or STK-2 inside the same window.

11. What Happens After 31 August 2026

The circular does not leave the aftermath to imagination: at the scheme’s conclusion, the Registrars of Companies are directed to take necessary action under the Act against companies that remain in default. In practical terms, companies that let the window pass should expect the full menu — additional fees at the uncondoned ₹100/day, adjudication of penalties under Sections 92 and 137, prosecution where warranted, ROC-initiated strike-off under Section 248(1) for persistent non-filers, and the consequence directors feel most personally: disqualification under Section 164(2) for any company that fails to file financial statements or annual returns for three continuous financial years — a disqualification that bars the individual from directorships across all companies for five years. Amnesty windows are also, historically, followed by enforcement waves: having offered the carrot, the MCA has every institutional incentive to demonstrate the stick. A company that could have reset its record for ten paise on the rupee and chose not to will find little sympathy in adjudication.

Frequently Asked Questions (FAQ)

Reset Your Company’s Compliance Record Under CCFS-2026 — Before 31 August 2026