The Ministry of Corporate Affairs has announced various COVID-19 relief measures in respect of compliances for businesses, amidst this global pandemic which is empowering the world. These measures definitely provide the much-needed support and reassurance to companies and LLP’s, registered with the Ministry. The details are stated below:
- 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., required to be filed in the MCA-21 Registry, irrespective of its due date, which will not only reduce the compliance burden, including financial burden of Companies/LLP’s at large, but also enable long standing non-compliant companies/ LLPs to make a fresh start.
- Non-compliance of minimum residency 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.
- Newly incorporated companies are required to file a declaration for Commencement of Business within 180 days of incorporation under section 10A of the Companies Act, 2013. An additional period of 180 more days is allowed for this compliance.
- Requirement to create a Deposit 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.
- Requirement to invest 15% of debentures maturing during a particular year in specified instruments before 30th April 2020, may be done so before 30th June 2020.
- The Independent Directors of the company are required to hold at least one meeting in a financial year, without the attendance of non-independent directors and members of management. For the financial year 2019-20, if the Independent Directors of a company have not been able to hold such a meeting, the same shall not be viewed as violation. The Independent Directors, however, may share their views amongst themselves through telephone or e-mail or any other mode of communication, if they deem it to be necessary.
- The mandatory requirement of holding meetings of the Board of the companies within the prescribed timeline of 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 Companies Act, 2013.
- 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 as notified earlier. This will significantly ease the burden on companies & their auditors for the financial year 2019-20.
Nikita Bhatia is the co-founder of VenturEasy, an online platform for Company registration, book-keeping, accounting, tax consultancy and legal compliances in India. A Chartered Accountant and company secretary by profession, she has wide experience in the fields of audit, accountancy, taxation and corporate governance.
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