The Ministry of Corporate Affairs relaxes compliance burden under the companies/LLP Act

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The Ministry of Corporate Affairs vide its circular dated 24th March 2020 has implemented several relief measures, especially on statutory and regulatory compliance matters related to several sectors, in the context of outbreak of pandemic COVID 2019.

The following measures have been implemented for reducing the compliance burden and other risks:

  • There will be no additional fees on late filings during moratorium period (i.e 1st April to 30th September)
  • The mandatory requirement to hold meetings of the Board of the companies stands extended by a period of 60 days till next two quarters i.e., till 30th September. 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.
  • If the independent directors of a company have not been able to hold even one meeting during the year it will not be considered 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 requirement to invest or deposit 15% of debentures maturing during a particular year in specified instruments before April 30, 2020, shall now be complied with till 30th June 2020.
  • The requirement to file declaration for the commencement of new business within 6 months has been relaxed, with six more months given to start-ups and businesses, making it one year from the commencement of business.
  • Further, if there is a company director who is not able to comply with the minimum residency in India of 182 days, it will not be treated as a violation under Section 149 of the Companies Act.

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