Special Measures by MCA to support and enable Companies and Limited Liability Partnerships (LLPs) in India to focus on taking necessary measures to address the COVID-19 threat
SPECIAL MEASURES TAKEN BY MINISTRY OF CORPORATE AFFAIRS UNDER COMPANIES ACT, 2013 (CA-13) AND LIMITED LIABILITY PARTNERSHIP ACT, 2008
We all are getting economically affected by COVID-19. There are certain measures which we can take to reduce the economic effect and there are certain external factor. One of those external factors is the Compliances and filings mandated by Law.
As an incorporated/ a registered Company or a LLP, there are certain regular and event based filings to be done with Registrar of Companies (ROC). There are certain mandated compliances for these Companies and LLPs as a Business entities.
The Government is trying to help all the registered Companies and LLPs by giving some relaxations for the mandated Compliances and by waiving of additional fees.
In order to support and enable Companies and Limited Liability Partnerships (LLPs) in India to focus on taking necessary measures to address the COVID-19 threat, including the economic disruptions caused by it, the following measures have been implemented by the Ministry of Corporate Affairs to reduce their compliance burden and other risks: –
- 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 non-compliant companies/ LLPs to make a ‘Fresh Start‘.
- The mandatory requirement of holding meetings of the Board of the companies within the interval of 120 days as provided in section 173 of the CA-13 stands extended by a period of 60 days till next two quarters i.e., till 30th September.
- The Companies (Auditor’s Report) Order, 2020 shall be made applicable from the financial year 2O2O-2O21 instead of being applicable from the financial year 2019-2020 notified earlier.
- Newly incorporated companies are required to file a declaration for Commencement of Business within 180 days of incorporation under section 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 at least 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.
- As per Para VII (1) of Schedule IV to the CA-13, Independent Directors (IDs) are required to hold at least one meeting without the attendance of Non-independent directors and members of management. For the financial year 2019-20, if the IDs of a company have not been able to hold such a 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, if they deem it to be necessary.
- Requirement under section 73(2)(c) of 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 amount of debentures maturing in specified methods of investments or deposits before 30th April 2020, may be complied with till 30th June 2020.
Practicing Company Secretary