Relaxations Under Companies Act, 2013 Due To Covid-19

Companies Fresh Start Scheme, 2020

‘PM CARES Fund’ as an eligible CSR expenditure under item (viii) effective from March 28, 2020.

A Government Company or WoS of a Government Company at the time of filing of form STK-2 submit a duly notarized Indemnity Bond in Form STK-3A (Format of Indemnity Bond), given by an authorized representative, not below the rank of Under Secretary or its equivalent.

MCA has extended the time limit for filing of Form NFRA-2 for the reporting period F.Y. 2018-19. The said period will be 270 days from the date of deployment of this form on NFRA website.

MCA has allowed certain expenditure made by the Company as CSR Expenditure, if the Contribution is given:

1. for research and development projects in the field of science, technology, engineering and medicine under item no. (ix) (a) and

2. to Department of Biotechnology (DBT); Department of Pharmaceuticals; Ministry of Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homoeopathy (AYUSH) in (ix) (b) is inserted.

MCA Notified the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2020 and made the amendment in the Companies (Corporate Social Responsibility Policy), Rules, 2014.

“CSR Policy” relates to the activities to be undertaken by the company in areas or subjects specified in Schedule VII to the Act and the expenditure thereon, excluding activities undertaken in pursuance of normal course of business of a company;

Provided that any company engaged in research and development activity of new vaccine, drugs and medical devices in their normal course of business may undertake research and development activity of new vaccine, drugs and medical devices related to COVID-19 for financial years 2020-21, 2021-22 and 2022-23 subject to the conditions.

Companies Amendment Act, 2017

MCA Notified the provision of clause (ii) of section 23 of the Companies (Amendment) Act, 2017, and accordingly amendment is made in existing provisions u/s 92(3) of the Companies Act, 2013.

Every company shall place a copy of the annual return on the website of the company, if any, and the web-link of such annual return shall be disclosed in the Board’s report.

MCA has notified the Companies (Acceptance of Deposits) Amendment Rules, 2020 and made few amendments for Startup Companies.

Extension of time for LLP Settlement Scheme, 2020

MCA had notified amendment in the Companies (Meeting of Board and its Powers) Third Amendment Rules, 2020 and allowed the Companies to pass certain matters which are generally not allowed to be dealt in any meeting held through video conferencing or other audio-visual means till December 31, 2020.

MCA had notified amendment in The Companies (Appointment and Qualification of Directors) Fourth Amendment Rules, 2020 (“The 4^th Amendment Rules, 2020”) and extended the time limit for inclusion of name of Independent Director in data bank of Independent Director from “ten months” to “thirteen months” that is till December 31, 2020

MCA extended the time limit for creation of Deposit Repayment Reserve and to invest or deposit amount of Debentures as mentioned below till December 31, 2020.

MCA has notified the Companies (Prospectus and Allotment of Securities) Amendment Rules, 2020 and inserted a new proviso as mentioned below after 3rd proviso of Rule 14(1) of the Companies (Prospectus and Allotment of Securities) Rules, 2014.

In view of extra ordinary disruption caused due to the pandemic, it has been decided that if the cost audit report for F.Y 2019-20 is submitted by the cost auditor to the Board of Directors of the Companies by 31^st December, 2020, then the same would not be viewed as violation of rule 6(5) of Companies (cost records and audit), Rules, 2014.

Every Report made by the Auditor under section 143 of the Companies Act 2013 on the accounts of every company audited by him, to which the CARO, 2020 applies, for the financial years commencing on or after the 1st April, 2021, shall in addition, contain the matters specified in paragraphs 3 and 4, as may be applicable: Provided this Order shall not apply to the auditor’s report on consolidated financial statements except clause (xxi) of paragraph 3. CARO, 2020 applicability is further differed to from 01 April, 2021 onwards.

MCA has notified the Companies (Compromises, Arrangements and Amalgamations) Second Amendment Rules, 2020 to further amend the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 in the following manner: –

• In rule 2(1) on Definitions the following clause shall be inserted, namely:

“(e) “corporate action” means any action taken by the company relating to transfer of shares and all the benefits accruing on such shares namely, bonus shares, split, consolidation, fraction shares and right issue to the acquirer”.

• Rule 26A shall be inserted regarding Purchase of minority shareholding held in demat form

MCA notified The Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2020 giving certain relaxations to Independent Directors.

Key points of the notification are summarised as under:

• Relaxation to take the online proficiency self-assessment test. An individual to pass the test within a period of 2 years from the date of inclusion of their name in the database (earlier it was within a year)
• Expanded eligibility criteria for exemption from taking the test, and eased experience criteria for an individual who has served as a Director/KMP for a total period of not less than 3 years (earlier it was 10 years) in certain  Public Companies/Body Corporates or in the Organisations specified by the Central Government
• The passing criteria for the online proficiency self-assessment test has been reduced to 50% from 60%

In exercise of the powers conferred by sub-section (2) of section 1 of the Companies (Amendment) Act, 2020 (29 of 2020), the Central Government hereby appoints the 21st day of December, 2020 as the date on which the few provisions of the said Act shall come into force.

The Companies (Share Capital and Debentures) Second Amendment Rules, 2020 is published on 24^th December 2020. The amendment is change in Form SH-7, which is Notice to Registrar for alteration in Capital.

Through this amendment, the Rule has been amended by insertion of new Rule 9A where the Applicant can apply for extension of period for reservation of Name for incorporation of new company (not for change of name of the company). According to Rule 9 (which was amended on 23^rd February 2020) of the Companies (Incorporation) Rules, 2014, an Application for reservation of Name for the company to be made by the Applicant through the web service available at www.mca.gov.in

1. For the formation of new company file Form SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus: INC-32) along with fee as provided in the Companies (Registration Offices and Fees) Rules, 2014 ; and

2. For the change of name of existing company file Form RUN (Reserve Unique Name) using web services along with fee as provided in the Companies (Registration Offices and Fees) Rules, 2014,

3. The Registrar, Central Registration Centre (CRC) Manesar, Delhi may either approve or reject it and allow re-submission of such web form within 15 days for rectification of the defects, if any

For Incorporation of new company, the Name is reserved for 20 days and for the change of name of existing company, the Name is reserved for 60 days.

Part A of SPICe+ is substituted with new Part A.

MCA notified the Companies (Meetings of Board and Its Powers) Fourth Amendment Rules, 2020 and allowed the Companies to pass following matters which are generally not allowed to be dealt in any meeting held through video conferencing or other audio visual means till June 30, 2021 (earlier it was allowed till December 31, 2020)

In continuation to the General Circulars No.14/2020 dated 8th April, 2020, No.17/2020 dated 13th April, 2020, No.22/2020 dated 15.06.2020 and No.33/2020 dated 28.09.2020 , MCA has allowed companies to conduct their EGMs through VC or OAVM or transact items through postal ballot in accordance with the framework provided in the aforesaid Circulars upto 30th June, 2021. All other requirements provided in the said Circulars shall remain unchanged.