In view of the threats posed by COVID-19, Ministry of Corporate Affairs ("MCA") is continuously trying to provide relief measures to the stakeholders. Well before the lockdown was announced but seemed inevitable, MCA has started working on the amendments Companies Act, 2013 required to make it compatible with the changes which time has demanded. This article is an attempt to compile all the initiatives taken by MCA for bringing relief to its stakeholders by providing relief measures under the Companies Act, 2013.
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Filings Related |
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1. |
23/03/2020 |
Filing of CAR web form |
Filling of Companies Affirmation of Readiness towards COVID-19 (CAR) was introduced by the Ministry of Corporate Affairs w.e.f March 23, 2020. It was a simple web-based form. The form was deployed as purely a confidence-building measure to assess the readiness of the companies to deal with COVID-19 threat in India. The form has been discontinued w.e.f April 14, 2020. |
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2. |
24/03/2020 |
Waiver of additional fees |
The Ministry of Corporate Affairs vide its General Circular No. 11/2020 had announced waiver of additional fees on for late filing during a moratorium period starting from 01st April, 2020 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. |
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3. |
24/03/2020 |
Relaxation in filing period of form INC-20A |
Additional period of 180 days has been allowed to the Companies which are required to filed declaration for Commencement of Business in eform 20A under the provisions of Section 10A of the Companies Act, 2013. |
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4. |
30/03/2020 |
Announcement of Companies Fresh Start Scheme, 2020 |
The Ministry of Corporate Affairs, has introduced the ‘Companies Fresh Start Scheme, 2020’ ("CFSS 2020"). Companies Fresh Start Scheme, 2020 gives a one time, un-precedented relief to the defaulting companies. With the launch of this scheme, not only longer timelines have been provided to the corporates to comply with various filing requirements under the Companies Act 2013 but also an effort is made to reduce the related financial burden on them along with immunity from penal proceedings. http://www.mca.gov.in/Ministry/pdf/Circular12_30032020.pdf Later on April 15, 2020, 50 FAQs were released by Ministry of Corporate Affairs to give more clarity on CFSS 2020. http://www.mca.gov.in/Ministry/pdf/FAQCFSS_15042020.pdf On the similar lines, revised LLP Settlement Scheme was announced by Ministry of Corporate Affairs. |
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5. |
01/04/2020 |
Waiver of late fees for filings form DIR-3/DIR-3 KYC and form ACTIVE/INC-22A |
In furtherance of General Circular No.11 dated 24 th March, 2020 and 12 dated 30th March 2020, Ministry of Corporate Affairs has provided an opportunity to the those Directors who are and to the Companies which are in default of filing form DIR_3 KYC/DIR-3 KYC web and form ACTIVE respectively without any filing fee of INR 5000/INR 10000 respectively. |
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6. |
13/04/2020 |
Clarification on IEPFA rules |
Ministry of Corporate Affairs on April 13, 2020 vide its General Circular Number 16/2020 clarified that filings required under Section 124 and 125 of the Companies Act, 2013 with reference to IEPFA (Accounting, Audit, Transfer and Refund) Rules 2016 are part of the waiver of additional fees provided by General Circular No. 11/2020 dated March 24, 2020. |
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7. |
22/04/2020 |
Extension for reserved names and forms due for resubmission (for Companies) |
Ministry of Corporate Affairs on April 22, 2020 announced extension for reserved names and forms due for resubmission under Companies Act, 2013. i. Names reserved for 20 days for new company incorporation- Names expiring any day between 15 th March 2020 to 3rd May would be extended by 20 days beyond 3rd May 2020. ii. Names reserved for 60 days for change of name of company- Names expiring any day between 15 th March 2020 to 3rd May would be extended by 20 days beyond 3rd May 2020. iii. RSUB validity for Companies- SRNs where last date of Resubmission (RSUB) falls between 15th March 2020 to 3rd May 2020, additional 15 days beyond 3rd May 2020 would be allowed. However, for SRNs already marked under NTBR, extension would be provided on case to case basis. Similarly extension is provided to the reserved names and forms due for resubmission under Limited Liability Act, 2008. |
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Board and its Meetings related |
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8. |
19/03/2020 |
Exemption from physical presence of the directors |
Vide the Companies (Meetings of Board and its Powers) Amendment Rules, 2020 dated 19th March, 2020 the Ministry of Corporate Affairs has relaxed the requirement of holding Board meetings with physical presence of directors under Section 173(2) read with rule 4 of the Companies (Meetings of Board and its Powers) Rules, 2014. Due to this amendment for the period beginning from the commencement of the Companies (Meetings of Board and its Powers) Amendment Rules, 2020 and ending on the 30th June,2020, the meetings on matters referred to in sub-rule (1) of Rule 4 may be held through video conferencing or other audio visual means in accordance with rule 3 of The Companies (Meetings of Board and its Powers) Rules, 2014. |
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9. |
24/03/2020 |
Additional period between 2 board meetings |
Holding meetings of the Board of the companies within the prescribed interval provided in section 173 of the Companies Act, 2013 (i.e.120 days) stands extended by a period of 60 days till next two quarters i.e. till 30th September. This means till next two quarters the gap between two consecutive meetings of the Board may extend to 180 days. |
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10. |
24/03/2020 |
Relaxation to the independent directors from holding a meeting |
If the Independent Directors of a company have not been able to hold a meeting as required under Para VII (1) of Schedule IV to the Companies Act, 2013 for the financial year 2019-20, the same shall not be viewed as violation. |
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11. |
24/03/2020 |
Exemption to Resident Directors who are not able to stay in India for at least 182 days in the financial year 2019-20 |
Non-compliance of minimum stay in India for a period of at least 182 days by at least one director of every company, under Section 149 of the Companies Act, 2013 shall not be treated as non-compliance for the financial year 2019-20. |
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Members’ Meeting (EGMs/AGMs) related |
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12. |
08/04/2020 |
Holding of members meeting through Video Conferencing/ OAVM |
Ministry of Corporate Affairs vide its General Circular No. 14/2020 has allowed to conduct the members’ meetings via Video Conferencing or Audio Visual Means (OAVM). The notice for these general meetings may be sent through emails and placed on websites. Where email ids are not available with the Company, a public notice by way of advertisement at least in a principal vernacular language newspaper and in an English Newspaper having wide circulation in the district of the Company would be a sufficient compliance. |
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13. |
21/04/2020 |
Extension in time limit to hold Annual General Meetings |
Vide General Circular No. 18/2020, Ministry of Corporate Affairs provided relief to the Companies whose financial year was ended on December 31, 2019 (other than 1 st financial year) and which were liable to call Annual General Meeting within 6 months from the date of closure of financial year and not later than 15 months from the date of last Annual General Meeting. |
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Others |
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14. |
23/03/2020 |
Clarification on expenditure of funds for COVID-19 |
Vide General Circular No.10/2020 of Ministry of Corporate Affairs clarified that spending of CSR funds for COVID-19 is eligible as CSR activity. Funds may be spent for various activities related to COVID-19 under item nos. (i) and (xii) of Schedule VII relating to promotion of health care, including preventive health care and sanitation, and, disaster management. |
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15. |
24/03/2020 |
Extension in time limit to create DRR |
Creation of the deposit repayment reserve ("DRR") of 20% of deposits maturing during the financial year 2020-21 before 30th April 2020, as required under Section 73(2) (c) of the Companies Act, 2013 may now be complied with till June 30, 2020. |
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16. |
24/03/2020 |
Extension in time limit for Investment/ deposit for Debentures |
Investment or depositing at least 15% of the amount of debentures maturing in specified methods of investments or deposits before 30th April 2020, as required under rule 18 of the Companies (Share Capital & Debentures) Rules, 2014, may now be complied with till June 30, 2020. |
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17. |
24/03/2020 |
Postponement of the applicability of CARO Order 2020 |
The Companies (Auditor’s Report) Order, 2020 shall be made applicable from financial year 2020-21, instead of being applicable from the financial year 2019-20. |
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18. |
28/03/2020 |
Contribution to PM CARES fund shall qualify as CSR expenditure |
The Government of India has set up the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund) with the primary objective of dealing with any kind of emergency or distress situation such as that posed by COVID 19 pandemic. Any contribution made to the PM CARES Fund shall qualify as CSR expenditure under the Companies Act, 2013. |
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