MCA issues measures for companies and LLPs to address the COVID-19 treat

Mar 26, 2020 | by Avantis RegTech Legal Research Team

Secretarial Compliance

The Ministry of Corporate Affairs (MCA) on March 24, 2020, issues measures for companies and Limited Liability Partnerships (LLPs) to address the COVID-19 treat.

To reduce the compliance burden and other risks, MCA issues the following measures:-

1. No additional fees shall be charged for late filing during a moratorium period from April 01 to September 30, 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/ LLPs at large. It also enable long-standing noncompliant companies/ LLPs to make a 'fresh start'.

2. The mandatory requirement of holding meetings of the Board of the companies has been extended by a period of 60 days till next two quarters that is till September 30. Accordingly, as a onetime 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.

3. The Companies (Auditor's Report) Order,2020 shall be made applicable from the financial year 2020-2021 instead of being applicable from the financial year 2019-2020 notified earlier.

4. For the financial year 2019-20, if the Independent Directors (IDs) of a company have not been able to hold such a meeting, the same shall not be viewed as a violation. The IDs, 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.

5. The deposit repayment reserve of 20% of deposits maturing during the financial year 2020-21 before April 30, 2020 shall be allowed to be complied with till June 30, 2020.

6. Requirement to invest or deposit at least 15% of amount of debentures maturing in specified methods of investments or deposits before April 30, 2020, may be complied with till June 30, 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-13. An additional period of 180 more days is allowed for this compliance.

8. 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 CA-1 3 shall not be treated as a non-compliance for the financial year 2019-20.

[General Circular No. 11/2020]


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