Measures taken by MCA in wake of Covid-19:

Due to the sudden spread of Covid-19 in whole of the world including India, the whole nation is in total lockdown and practicing social distancing so as to fight this pandemic.

Since the Companies are shut, businesses already are undergoing huge losses and therefore understanding the position of the Companies, Ministry of Corporate Affairs has taken certain measures to facilitate Compliances in the wake of COVID-19.

Few important measures taken by MCA are:

1. FORM CAR (Companies Affirmation of Readiness Towards COVID-19):

An e-form is deployed at MCA website which has to be filed voluntarily by the authorised signatory of the Company confirming that they are taking all the necessary measures in accordance with the Guidelines issued by the Central/ State Government.

This is to make sure that all the companies are following the regulations regarding Covid-19.

2. Companies (Meetings of Board and its Powers) Amendment Rules, 2020:

For the period beginning from the commencement of these rules i.e. 19^th march 2020 till 30^th June 2020 the meetings on matters in which physical presence of Board of Directors was mandatory may be held through video conferencing or other audio visual means in accordance with Rule 3.

3. Moratorium period:

The Ministry has provided a Moratorium period to the Companies /LLPs from 01^st April to 30^th September 2020 under which No additional fees shall be charged for any kind of late filing for any document, return or statement etc. required to be filed at MCA 21.

4. Board Meetings:

The gap between two consecutive Board Meetings can be 180 days instead of 120 days till 30^th September 2020.

5. CARO 2020:

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.

6. Independent Directors Meeting:

As per the Companies Act 2013, all the Independent Directors of the Company need to hold at least 1 meeting without the presence of Non-Independent Directors. The Ministry, for the year 2019-2020 has dispensed with this regulation. If the IDs are not able to hold such meeting it will not be seen as violation.

7. Extension for Declaration of Commencement of Business:

An additional period of 180 days is allowed to the newly incorporated Companies for filing of declaration of Commencement of business.

8. Requirement of Section 149 (3):

Section 149 (3) of the Act requires every company to have at least one director who stays in India for a total period of not less than one hundred and eighty-two days during the financial year.

Non-compliance of this requirement will not be treated as a Non Compliance for the Financial Year 2019-20.

9. CSR funds:

A clarification was provided by the Ministry stating that spending of CSR funds for COVID-19 will be treated as CSR activity. This way the Companies can be of utmost help to the society during this tough time.

10. Requirement under section 73(2)(c) of CA-13 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.

11. Requirement under rule 18 of the Companies (Share Capital & Debentures) Rules, 2014 to invest or deposit at least 15% of amount of debentures maturing in specified methods of investments or deposits before 30th April 2020, may be complied with till 30th June 2020.

The Ministry may make any further extensions or changes in these or other rules as per the requirement.