SPECIAL MEASURES UNDER THE COMPANIES ACT, 2013 IN THE WAKE OF COVID-19 OUTBREAK BY MCA

Ministry of Corporate Affairs (“MCA”) vide general circular No 11/2020 dated March 24, 2020 has come up with the following relief measures, in order to address the economic disruptions and to reduce the compliance burden and other risks

  1. No additional fees shall be charged for late filing of any documents, return etc. with MCA during the period from April 01, 2020 to September 30, 2020 irrespective of its due date.
  2. The requirement of holding board meetings within a prescribed interval of 120 days, stands extended by a period of 60 days till next two quarters i.e., till 30th September.
  3. The Companies (Auditor’s Report) Order, 2020 shall now be applicable from the financial year 2020-2021 instead of 2019-2020. In case the independent directors could not hold their meeting during the financial year 2019-2020, the same shall not be treated as non-compliance or violation.
  4. The Requirement of creating the deposit repayment reserve under section 73(2)(c) for the financial year 2020-2021 on or before April 30, 2020 has been extended till June 30, 2020.
  5. Requirement of investing or depositing certain amounts of debentures maturing in specified methods of investments or deposits as per rule 18,on or before April 30, 2020 has been extended till June 30, 2020.
  6. Every newly incorporated company is required to file a declaration in form INC-20A within 180 days from the date of its incorporation. MCA has now provided an additional time limit of 180 days for filing of the same.
  7. Requirement of having at least one director in a company qualifying as resident in India as per section 149(3) has been waived off for the financial year 2019-2020.

The above measures would certainly help many Companies to comply with the regulations, which are otherwise unable to comply with regulations due to the general lock down situation in the Country. This can be seen as a welcome step from the Ministry of Corporate Affairs.

Full text of the circular can be accessed from the below link

http://www.mca.gov.in/Ministry/pdf/Circular_25032020.pdf

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