Relaxations in Companies Act Compliances due to {CoVID19}

Relaxations in Companies Act Compliances due to

{CoVID19}

SERIES 602

SHORT SUMMARY:

In this editorial author shall discuss about:

v Relaxation given by MCA in Compliances of Companies Act, 2013 due to COVID-19 Situation.

v Amendment made by MCA due to Pandemic Situation in Country. Relaxations from many Due Dates for Filing of Forms, holding of Meetings etc.

There were almost 3 Amendment Rules, 13 Circulars and 2 Notification between March 15, 2020 to  June 15, 2020.

 

Details of Relaxations;

Year

Description

30th March

Relaxation in Due date of Filing of e-forms with ROC.

19th March

Relaxation in Holding of Board Meeting through Video Conferencing for Restricted Matters

24th March

One Time relaxation for Holding of one Board Meeting with a gap of 180 days

8th April

Holding of EGM and AGM through Video Conferencing

21st April

Holding of AGM till 30th September for Companies whose financial year ended on 31st December, 2019

 

 

 

      I.            Relaxation in Due date of Filing of e-forms with ROC.

 

Ministry has issued CFSS, 2020 on 30th March, 2020. This is the biggest relaxation provided by MCA due to COVID-19.

 

According to this scheme if any Company/ LLP having any form pending for filing with ROC whose due date has been already passed can be file under this Scheme without any Additional Fees till 30th September, 2020.

      i.         E.g. due date of MSME 1 for the half year ended on 31st March was 30th April. However, if Companies fail to file such form before the due date, they can file such form without any additional fees till 30th September.

     ii.         Eg. Due date of LLP-11 for the financial year ended 31st March was 30th May. However, if Companies fail to file such form before the due date, they can file such form without any additional fees till 30th September.

Only one extra compliance is required to be done by Companies i.e. between October 01, 2020 to March 31, 2021, Companies have to file e-form CFSS with ROC with SRN of all the forms which filed under this scheme after due date.

I.         Key Points about Return:

 

v All the forms of Companies Act except SH-7 and Charge related form are part of this scheme.

v No need to pay any additional fees.

v Ministry has issued a list of forms covered under this scheme. http://www.mca.gov.in/Ministry/pdf/CFSS2020_02042020.pdf

v  Ministry has issued FAQ’s on the scheme.

http://www.mca.gov.in/Ministry/pdf/FAQCFSS_15042020.pdf

 

 

 

II.         Relaxation in Holding of Board Meeting through Video Conferencing for Restricted Matters.

 

As per Rule -3 of Companies (Meetings of Board and its Power) Rules, 2014, A Company shall comply with the procedure given in this rule, for convening and conducting the Board meetings through video conferencing or other audio-visual means.

As per Rule 4, The following matters shall not be dealt with in any meeting held through video conferencing or other audio-visual means-

      I.         the approval of the annual financial statements;

    II.         the approval of the Board’s report;

  III.         the approval of the prospectus;

 IV.         the Audit Committee Meetings for consideration of financial statement including consolidated financial statement if any, to be approved by the Board under sub-section (1) of section 134 of the Act]; and

   V.         The approval of the matter relating to amalgamation, merger, demerger, acquisition and takeover.

Provided that where there is quorum presence in a meeting through the physical presence of directors, any other director may participate conferencing through video or other audio-visual means.

 

Circular Dated:  March 19, 2020

For the period beginning from the commencement of the Companies (Meetings of Board and its Powers) Amendment Rules, 2020 and ending on the 30th September, 2O2O, the meetings on matters referred to in sub-rule ( 1) may be held through video conferencing or other audio visual means in accordance with rule 3." 

However, the above circular provide Relaxation to Companies to hold Boar Meeting through video conferencing till September 30, 2020 even for finalization of restricted matters.

 

III.         One Time relaxation for Holding of one Board Meeting with A gap of 180 days

 

The mandatory requirement of holding meetings of the Board of the companies within the intervals provided in section 173 of the Companies Act, 2013 (CA13) (120 days) stands extended by a period of 60 days till next two quarters i.e., till 30th September.

 

Accordingly, as a one-time relaxation, the gap between two consecutive meetings of the Board may extend to 180 days till the next two quarters, instead of 120 days as required in the CA-13.

 

II.         If Last Board Meeting held on Feb 28, 2020 then what shall be the due date of the next meeting?

The due date for the next board meeting is August 26, 2020 i.e. 180 days from the last meeting.

 

 

III.         If Last Board Meeting held on January 02, 2020 then what shall be the due date of the next meeting?

The due date for the next board meeting is June 30, 2020 i.e. 180 days from the last meeting.

 

 

IV.         If Last Board Meeting held on December 25, 2019 then what shall be the due date of the next meeting?

 

The due date for the next board meeting is June 22, 2020 i.e. 180 days from the last meeting.

 

 

IV.    Holding of EGM and AGM through Video Conferencing

 

Ministry has issued the following Circulars:

a.     April 08, 2020: http://www.mca.gov.in/Ministry/pdf/Circular14_08042020.pdf

b.    April13 , 2020: http://www.mca.gov.in/Ministry/pdf/Circular17_13042020.pdf

c.     May 05, 2020: http://www.mca.gov.in/Ministry/pdf/Circular20_05052020.pdf

 

Legally Companies Act, 2013 doesn’t specify any provisions for allowing the conduct of members’ meetings through video conferencing (VC) or other audio-visual means

Now, MCA has issued above-mentioned Circular, which provides Clarification on Passing Ordinary and Special Resolutions by Companies in EGM/ AGM through Video Conferencing on account of the threat posed by COVID-19.

 

According to above mentioned circulars:

Ø  All type of Companies can hold Extra-Ordinary General Meeting through Video Conferencing till September 30, 2020 as per the process given in the above circulars.

Ø  All type of Companies can hold Annual General Meeting through Video Conferencing till December 31, 2020 as per the process given in the above circulars.

 

 

V.    Holding of AGM till 30th September for Companies whose financial year ended ON DECEMBER31, 2019

 

MCA has issued circular on April 21, 2020 to give relaxation, that if the financial year of any Company ended on December 31, 2019 they can hold Annual General Meeting till  September 30, 2020 instead of  June 30, 2020.

 

Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at csdiveshgoyal@gmail.com). ‘

 

Disclaimer: The entire contents of this document have been prepared based on the relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, I assume no responsibility therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not a professional advice and is subject to change without notice. I assume no responsibility for the consequences of use of such information.

 IN NO EVENT SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE INFORMATION.


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