RELAXATION BY MCA

1. Reason for relaxation

The outbreak of the coronavirus (COVID-19) is an unprecedented event that has led to the lockdowns and unanticipated restrictions on the public as well as the corporate sector in various country of the world.  Similar India has also been affected by the second wave of coronavirus and in order to control the spread of Covid-19, the Government of India has inter alia ordered all establishments, except essential goods and services, to temporarily close their physical offices. Employees are working remotely (Work from Home), but various difficulties are faced due to lack of office facilities, which leads to unnecessarily delay in compliances of various applicable laws. Keeping in mind the aforesaid, the government of India has temporarily relaxed several compliance requirements for the corporate sector through various notification.

1. Gap between two Board Meetings

• As per Section 173 of the Companies Act, 2013 every company shall hold a minimum number of four meetings of its Board of Directors every year in such a manner that not more than one hundred and twenty days shall intervene between two consecutive Board Meetings.
• The Ministry of Corporate Affairs has extended the time between the board meetings required to be held in first and second quarter of the year from 120 days to up to 180 days.
• Every company is required to hold at least four meetings for its Board of Directors every year and the gap between two meetings could not exceed 120 days. MCA has increased the permissible time gap between two meetings consecutively from 120 days to 180 days for the 1st quarter (i.e, April 2021-June 2021) and the 2nd quarter (i.e, July 2021- September 2021).

http://www.mca.gov.in/Ministry/pdf/GeneralCircularNo8_03052021.pdf

3. Creation and Modification of Charge

As per the Section 77 of the Companies Act 2013 the form CHG-1 and Form CHG-9 related to creation of charge and modification of charge has to be filed within the period of maximum 120 Days from the date of creation or modification of the charge.

According to the circular issued by the MCA dated 03^rd May, 2021 its applicability shall be as follow:

CASE A:

If the charge creation or modification is done before 01^st April, 2021:  If the creation or modification of charge is done before 01^st April, 2021 but the timeline for filing the form has not expired under section 77 of the Companies Act, 2013 as on 01^st April, 2013. (In other word the scheme will be applicable for the charge created or modified on and after 02^nd December, 2020.

TIMELINES:

 The period beginning from 01^st April, 2021 and ending on 31^st May, 2021 shall not be reckoned for filing of Forms fall under section 77 & section 78 of the Companies Act, 2013.

In case form not filed till May 31, 2021 the first day after March 31, 2021 shall be June 01, 2021.

FEES:

If company file form between 01^st April, 2021 to 31^st May, 2021 then fees applicable on such form as on 31^st March, 2021, required to be pay till 31^st March, 2021.

If Company file form till 31^st May, 2021, then 01^st June, 2021, shall be considered as next day of 31^st March, 2021, for the purpose of fees payable on Charge Form.

CASE B:

If the charge creation or modification is done between 01^st April, 2021 to 31^st May,2021:

Timelines: The period beginning from 01^st April, 2021 and ending on 31^st May, 2021 shall not be reckoned for filing of Forms fall under section 77 & section 78 of the Companies Act, 2013.

In case form not filed till May 31, 2021 then June 01 shall be the first day to count 120 days under section 77.

http://www.mca.gov.in/Ministry/pdf/GeneralCircularNo7_03052021.pdf

The Ministry of Corporate Affairs vide its General Circular No 06/2021 Dated 03^rd May, 2021 has granted additional time to the Companies and LLP upto 31^st July, 2021 for the form which were due for filing during the period of 01^st April 2021 to 31^st May 2021 (except Form CHG 1, Form CHG 4 and Form CHG 9)

For the delay filing of such form till 31^st July ,2021 only the nominal fee shall be chargeable from Companies/ LLP.

http://www.mca.gov.in/Ministry/pdf/GeneralCircularNo6_03052021.pdf

4. Relaxation on levy of additional fee

5. Spending of CSR Funds

According to the Section 135 of the Companies Act 2013 the specified companies has to spend atleast 2% of their three-year annual average net profit towards Corporate Social Responsibility in accordance with the Schedule VII.

It was clarified that spending of CSR funds for “setting up makeshift hospitals and temporary COVID care facilities” is an eligible CSR activity under item no. (i) and (xii) of Schedule VII of the Companies Act, 2013 related to promotion of health care, including preventive health care and disaster management respectively.

http://www.mca.gov.in/Ministry/pdf/GeneralCircularNo5_22042021.pdf