I. GOVERNMENT ALLOWS COMPANIES TO CONDUCT EGMs THROUGH VS OR OAVM AND EXTENDS TIMELINE FOR THE SAME:
II. GOVERNMENT AMENDS THE COMPANIES (CREATION AND MAINTENANCE OF DATABANK OF INDEPENDENT DIRECTORS) RULES, 2019:
The Ministry of Corporate Affairs vide Notification dated 18th June 2021 notified the Companies (Creation and Maintenance of databank of Independent Directors) Amendment Rules, 2021, as per which the following amendments have been made in the Companies (Creation and Maintenance of databank of Independent Directors) Rules, 2019:
individuals for inclusion or renewal of their names in the data bank of independent directors; and The Ministry of Corporate Affairs vide circular dated 18th June 2021 notified the Companies (Creation and Maintenance of databank of Independent Directors) Amendment Rules, 2021, as per which the following amendments have been made in the Companies (Creation and Maintenance of databank of Independent Directors) Rules, 2019:
Rule 3(7) (a) – (7) the institute shall, with the prior approval of the Central Government, fix a reasonable fee to be charged from:-
a. Rule 3(8) – In case of delay on the part of an individual in applying to the institute under sub-rule (7) for inclusion of his name in the data bank or in case of delay in filing an application for renewal thereof, the institute shall allow such inclusion or renewal, as the case may be, under rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014 after charging further fees of one thousand rupees on account of such delay.
III. GOVERNMENT NOTIFIES THE ACCOUNTING STANDARDS FOR SMALL AND MEDIUM COMPANIES:
As per the Notification dated 23rd June 2021, the Ministry of Corporate Affairs notified the Companies (Accounting Standards) Rules, 2021, the salient provisions of which are as follows:
The definition of Small and Medium-Sized Companies (SMCs) under the standards has been revised. As per the new definition, the turnover limit has been increased from Rs 50 crore to not exceeding Rs 250 crore and with enhanced borrowing limits. This is in addition to the requirements that such entities should be unlisted companies, which are not banks,
financial institutions, or insurance companies. The definition states as follows: An SMC is a company:
1. whose equity/ or debt securities are not listed or are not in the process of listing on any stock exchange, whether in India or outside India;\
2. which is not a bank, financial institution or an insurance company
3. whose turnover (excluding other income) does not exceed Rs. 250 crores in the immediately preceding accounting year;
4. which does not have borrowings (including public deposits) in excess of Rs. 50 crores at any time during the immediately preceding accounting year; and
5. Which is not a holding or subsidiary company of a company that is not an SMC
For the purposes of this clause (i.e. only the holding or subsidiary relation criteria), a company shall qualify as an SMC, if the conditions mentioned therein are satisfied as at the end of the relevant accounting period.
Where a company, being an SMC, has qualified for an exemption or relaxation previously but no longer qualifies for the relevant exemption or relaxation in the current accounting period, the relevant standards or requirements become applicable from the current period and the figures for the corresponding period of the previous accounting period need not be revised merely by reason of its having ceased to be an SMC. The fact that the company was an SMC in the previous period and it had availed of the exemptions or relaxations available to SMCs shall be disclosed in the notes to the financial statements.
IV. GOVERNMENT EXTENDS TIMELINE FOR FILING OF FORMS FOR CREATION OR MODIFICATION OF CHARGES: