COVID RELIEF MEASURES
CORPORATE AFFAIRS
- No additional fees shall be charged for late filing during a moratorium period from 01st April to 30th September 2020, in respect of any document, return, statement etc., required to be filed in the MCA-21 Registry, irrespective of its due date, which will not only reduce the compliance burden, including financial burden of companies/ LLPs at large, but also enable long-standing noncompliant companies/ LLPs to make a ‘fresh start’;
- The mandatory requirement of holding meetings of the Board of the companies within prescribed interval provided in the Companies Act, 2013 (CA-13) (120 days), 2013, shall be extended by a period of 60 days till next two quarters i.e., till 30th September 2020. Accordingly as a one-time relaxation the gap between two consecutive meetings of the Board may extend to 180 days till the next two quarters instead of 120 days as required in the CA-13;
- The Companies (Auditor’s Report) Order, 2020 shall be made applicable from the financial year 2020-2021 instead of being applicable from the financial year 2019- 2020 notified earlier. This will significantly ease the burden on companies & their auditors for the financial year 2019-20;
- As per Schedule IV to the Companies Act, 2013, Independent Directors (IDs) are required to hold at least one meeting without the attendance of Non independent directors and members of the management. For the financial year 2019-20, if the IDs of a company have not been able to hold even one such meeting, the same shall not be viewed as a violation. The IDs, however, may share their views amongst themselves through telephone or e-mail or any other mode of communication as may be necessary;
- Requirement under section 73(2)(c) of the CA-13, to create the Deposit repayment reserve of 20% of deposits maturing during the financial year 2020-21 before 30th April 2020 shall be allowed to be complied with till 30th June 2020;
- Requirement under Rule 18 of the Companies (Share Capital & Debentures) Rules, 2014, to invest or deposit at least 15% of the amount of debentures maturing in specified methods of investments or deposits before 30th April 2020, may be done so before 30th June 2020;
- Newly incorporated Companies are required to file a declaration of Commencement of Business within 180 days of incorporation u/s 10A of the CA-13. An additional period of 180 days is allowed for this compliance.
- Non-compliance of minimum residency in India for a period of 182 days by at least one director of every Company, under Section 149 of the CA-13 shall not be treated as a non-compliance for the financial year 2019-20;
- Due to the emerging financial distress faced by most companies on account of the large-scale economic distress caused by COVID 19, it has been decided to raise the threshold of default under section 4 of the IBC 2016 to Rs. 1 crore (from the existing threshold of Rs. 1 lakh). This will by and large prevent triggering of insolvency proceedings against MSMEs. If the current situation continues beyond 30th of April 2020, Central Government may consider suspending section 7, 9 and 10 of the IBC 2016 for a period of 6 months so as to stop companies at large from being forced into insolvency proceedings in such force majeure causes of default;
- Companies whose financial year ended on 31st December 2019 can hold their AGM for such financial year within a period of Nine Months (instead of 6 Months) i.e. by 30th September 2020;
- Companies are allowed to conduct their AGM through video conferencing or other audio-visual means during the calendar year 2020 subject to the fulfillment of the requirements mentioned in General Circular dated 05th May 2020;
- Central Government has allowed extension for names reserved through SPICe+ PartB for companies, RUN for LLPs and resubmission of certain e-forms;
- As per Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014 every individual who has been appointed as an independent director in a company, on the date of commencement of the Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019, shall within a period of Seven months (instead of Five Months) from such commencement apply online to the institute for inclusion of his name in the data bank for a period of one year or five years or for his life-time;
- Central Government has pursuant to the General Circular dated 13th April 2020, relaxed the provisions pertaining to passing of Ordinary and Special Resolutions and conduct of Extraordinary General Meeting on account of threat posed by COVID-19;
- Inability to dispatch notice under Section 62(1)(a)(i) to the shareholders through registered post or speed post or courier pursuant to the threat posed by the ongoing COVID-19, would not be viewed as violation of Section 62(2) for Rights Issue opening up to 31st July 2020 in case of Listed Company which complies with the SEBI Circular dated 06th May 2020.
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