Special measure under Companies Act, 2013 and Limited Liability Partnership Act, 2008 in view of COVID-19 breakout

MCA vide General Circular No. 11/2020 dated 24th March 2020, it has been decided to reduce their compliance burden and other risks.

Reliefs given were as follows:

  1. No additional fees shall be charged for late filing during a moratorium period from 01st April 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.
  2. The mandatory requirement of Board meetings of the companies within the intervals provided in the Companies Act, 2013 (120 days) stands extended by a period of 60 days till the 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.
  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. This will significantly ease the burden on companies & their auditors for the financial year 2019-20. A separate notification has been issued for this purpose.
  4. For the financial year 2019-20, if the Independent Director(ID) of a company has 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 requirement under the Companies Act, 2013 to create the deposit repayment 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.
  6. The requirement under the Companies (Share Capital & Debentures) Rules, 2014 to invest or deposit at least 15% of the number of debentures maturing in specified methods of investments or deposits before 30th April 2020, maybe complied with till 30th June 2020.
  7. Newly incorporated companies are required to file a declaration for Commencement of Business within 180 days of incorporation under the Companies Act, 2013. An additional period of 180 more days is allowed for this compliance.

Non-compliance of minimum residency in India for a period of at least 182 days by at least one director of every company, under the Companies Act, 2013 shall not be treated as a non-compliance for the financial year 2019-20.