Impact of Measures Announced In Response To The Spread of Covid-19 On Corporate Compliances

In response to the spread of the Covid-19 virus, various business support measures have been put in place by Central Government, State Governments, RBI, SEBI, Ministry of Corporate Affairs (MCA), ICSI and ROC. The purpose of this document is to present a brief summary of the measures announced to date by the public authorities in the affected countries.

There is a transformation in the traditional way of carry out compliances and conducting day to day activities among the businesses due to the pandemic and with the prompt actions and guidelines from the authorities and government Indian companies adapted these changes in no time.

When the pandemic strikes, the first thing which hampered all at once was nationwide lockdown from March 25th, 2020. It has made the compliances difficult more than ever before. To make it convenient government has considered the challenges in advance and provided the following relations from time to time:

  • Removing the need of physical presence of Directors in at least one Board Meeting held during the year and authorizing to approve the prohibited matters through Video Conferencing.
  • Promotion of Digital signing of documents.
  • Conducting EGM/AGM through Video Conferencing.
  • Relaxations in date of filing various information with ROC/RD and SEBI (In routine)
  • Extended date of conducting AGM as the auditors find it difficult to obtain sufficient audit information.

This has made things convenient and advanced at the same time and makes the point to analog age persons that digitization is not all bad and it is the present and future of doing Business.

If we were not already equipped with digitalization then we might suffer more as we have to done the compliances in the predefined manner or no compliance till everything come to back to normal.

Below is the exemplar mentioning what shall be the normal course of compliances and what are the changes due to COVID-19:

Particular Actions in Normal Course Change due to COVID -19
Board Meetings One meeting in a year had to be held in Physical Mode All the meeting can be conducted through virtual medium
Financials and Board Report etc. Can be approved in physical meeting only. Can be approved though virtual medium
AGM/ EGM Held only in Physical Mode Can be held through virtual medium
ROC Filings Has to be filed on their due date Moratorium up to Sep 30, 2020 has been given for 76 e-forms.
AGM Tentative last date of Conducting AGM for all companies is Sep 30, 2020 Extended up to Dec 31, 2020.

# And other several relaxations related to CSR, Deposits, IDs Data Bank, CFSS, LLP Settlement Scheme, Charges, CARO, MSME, Annual Return, Name reservation and company formation, Cost Audit Report and Indian Accounting Standards.

If we have not been prepared and business were not efficient enough to understand the technology then there will be a great threat to the organisations as this will halt still the decision making procedure of companies and pose a great threat to the term “going concern” which entrust the stakeholders in the Business.

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