Relaxations Under Companies Act, 2013 (CA-2013) And Limited Liability Partnership Act, 2008 In View of COVID-19 Outbreak.
MCA vide its General Circular 11/2020 dated March 24, 2020 issues some relaxations under Companies Act, 2013 (CA-2013) and Limited Liability Partnership Act, 2008 in view of COVID-19 outbreak.
In order to support and enable Companies and 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 MCA to reduce their compliance burden and other risks:
1. No additional fees shall be charged for late filing during a moratorium period from 01st April, 2020 to 30th September, 2020 in respect of any document, return, statement etc.
2. The mandatory requirement Board Meetings (BM) within the intervals provided in section 173 of the CA, 2013 (i.e. 120 days) stands extended by a period of 60 days till next 2 quarters. Accordingly, as a onetime relaxation, the gap between 2 consecutive BM meetings may extend to 180 days till the next 2 quarters, instead of 120 days as required in the CA, 2013.
3. The Companies (Auditor’s Report) Order, 2020 (CARO 2020) shall be made applicable from the financial year 2020-2021 instead of being applicable from the financial year 2019-2020 notified earlier.
4. As per Schedule IV of the CA, 2013 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.
5. Requirement under section 73(2)(c) of the CA, 2013 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.
6. 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.
7. Newly incorporated companies are required to file a declaration for Commencement of Business within 180 days of incorporation under section 10A of the CA, 2013. An additional period of 180 more days is allowed for this compliance.
8. Non-compliance of minimum residency in India for period of at least 182 days by at least 1 director of every company, pursuant to Section 149 of the CA, 2013 shall not be treated as a non-compliance for the financial year 2019-2020
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