General Circular No. 24/2020 dated 19.06.2020 w.r.t extension in time period for creation of deposit repayment reserve u/s 73 and deposit for debentures u/r 18 of Companies (Share Capital and Debentures) Rules, 2014
In continuation to General Circular no. 11/2020 dated 24th March, 2020
- Creation of the deposit repayment reserve of 20% of deposits maturing during the financial year 2020-21 shall be allowed to be complied with till 30th September, 2020 instead of 30th June, 2020.
- Investment or deposit of at least 15% of amount of debentures maturing in specified methods of investments or deposits may be complied with till 30th September, 2020 instead of 30th June, 2020.
General Circular No. 23/2020 dated 17.06.2020 w.r.t relaxation of time for filing forms related to creation and modification of charges under section 77 or 78 of the Companies Act, 2013
Under the Companies Fresh Start Scheme, 2020 the benefit of waiver of additional fees was not extended to the charge related document. In view of the threat posed by COVID -19, the Central Government has decided to introduce a Scheme namely, “Scheme for relaxation of time for filing forms related to creation and modification of charges under the Companies Act, 2013” for the purpose of condoning the delay in filing certain forms related to creation/modification of charges.
The features of the scheme are as under:-
Effective from the date of this circular i.e 17th June, 2013.
Applicability:
For filing of forms CHG-1 (form for creation and modification of charge) and CHG-9 ( creation of charge for secured debentures) by the company or the charge holder.
Relaxations:
- Where the date of creation/modification of charge is before 01/03/2020, but the timeline for filing such form has not expired under section 77 as on 01/03/2020 :-
- Period beginning form 01/03/2020 and ending on 30/09/2020 shall not be reckoned for the purpose of counting the number of days u/s 77 or 78 of the Act. If the form is filed on or before 30.09.2020, the fees payable as on 29.02.2020 under the Fees rules shall be charged.
Consequences of non – filing:-
- If the form is not filed within the above mentioned period, the first day after 29/02/2020 shall be reckoned as 01/10/2020 for the purpose of counting the number of days within which the form is required to be filed u/s 77 or 78 of the Act.
- If the form is filed after 30/09/2020, the applicable fees shall be charged under the Fees Rules after adding the number of days beginning from 01/10/2020 and ending on the date of filing plus the time period lapsed from the date of the creation of charge till 29/02/2020.
OR
- Where the date of creation/modification of charge falls on any date between 01/03/2020 to 30/09/2020 (both dates inclusive)
- Period beginning from the date of creation/modification of charge to 30/09/2020 shall not be reckoned for the purpose of counting of days u/s 77 or 78 of the Act. If the form is filed before 30.09.2020, normal fees shall be payable under the Fees Rules.
Consequence of non – filing:-
- If the form is not filed within the above mentioned period, the first date after date of creation/modification of charge shall be reckoned as 01/10/2020 for the purpose of counting the number of days within which the form is required to be filed u/s 77 or 78 of the Act.
- If the form is filed after 30/09/2020, the first day after the date of creation/modification of charge shall be reckoned as 01/10/2020 and the number of days till the date of filing of the form shall be counted accordingly for the purpose of payment of fees under the Fees Rules.
Non-applicability of the scheme:-
- Where CHG-1 and CHG-9 have already been filed before the date of issue of this circular.
- Where the timeline for filing the form has already expired u/s 77 or 78 of the Act prior to 01/03/2020.
- Where the timeline for filing the form expired at a future date, despite exclusion of the time relaxations.
Filing of form CHG-4 for satisfaction of charge.
General Circular No. 22/2020 dated 15.06.2020 w.r.t passing of ordinary and special resolutions by companies in EGMs through VC or OVAM under the Companies Act, 2013
Companies to conduct their EGMs through Video Conferencing (VC) or Other Audio Visual Means (OAVM) or transact items through postal ballot up to 30th September, 2020 instead of 30th June, 2020 as mentioned in general circular no. 14/2020 dated 8th April, 2020 and 17/2020 dated 13th April, 2020.
Notification no. G.S.R._(E) dated 05.06.2020 w.r.t amendment in Rule 8 [issue of sweat equity shares by startup companies] under the Companies (Share Capital and Debentures) Rules, 2014
The Notification shall come into force on the date of their publication in the Official Gazette i.e 12th June, 2020.
In second proviso of rule 8(4) w.r.t Issue of Sweat Equity Shares:-
- For the letters, figures, brackets and words "GSR 180(E), dated 17th February, 2016 issued by the Department of Industrial Policy and Promotion" the letters, figures, brackets, and words "G.S.R. 127(E), dated 19th February, 2019 issued by the Department for Promotion of Industry and Internal Trade" shall be substituted for referring the definition of a startup company.
- For the words "five years" the words, "ten years" sha11 be substituted i.e a startup company may issue sweat equity shares not exceeding fifty percent of its paid up capital up to “ten years” from the date of its incorporation or registration.
Notification no. G.S.R. 313(E) dated 26.05.2020 w.r.t amendment in activities which may be included by companies in their CSR Policies (Schedule VII) under the Companies Act, 2013
Notification shall be deemed to have come into force on 28th March, 2020.
In Schedule VII, item (viii), after the words “Prime Minister’s National Relief Fund”, the words “or Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund)” shall be inserted. The item shall be read as follows:-
contribution to the prime minister's national relief fund or Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund) or any other fund set up by the central govt. for socio economic development and relief and welfare of the schedule caste, tribes, other backward classes, minorities and women
General Circular No. 21/2020 dated 11.05.2020 w.r.t dispatch of notice for opening of rights issue under section 62(2) of the Companies Act, 2013 by the listed companies.
Inability to dispatch notice for opening of rights issue up to 31st July, 2020 through registered post or speed post or courier would not be viewed as violation of section 62 (2) of the Act in case of listed companies which comply with the SEBI circular dated 6th May, 2020 due to difficulties faced by companies in sending notices due to the threat posed by COVID -19.
General Circular No. 20/2020 dated 05.05.2020 w.r.t holding of AGM through Video Conferencing (VC) and Other Audio Visual Means (OAVM)
- Considering the threat posed by COVID-19, companies can hold AGM through Video Conferencing (VC) and Other Audio Visual Means (OAVM) during the calendar year 2020 subject to fulfilment of the conditions as specified in the Circular. (reference to circulars issued w.r.t EGM shall also be made)
- In such meetings, other than ordinary business, only those items of special business which are considered to be unavoidable by the Board, may be transacted.
- The procedures are specified separately for the following companies: -
- Companies which are required to provide the facility for e-voting under the Act (i.e listed companies and every company having not less than 1000 members), or any other company which has opted for such facility.
- Companies which are not required to provide the facility of e-voting under the Act (i.e unlisted companies and company having less than 1000 members).
- Important points to take note of:
- Copies of Financial Statements (including Board’s Report and Auditor’s report or other documents) shall be sent only by email to the members, trustees, etc.
- Issue of public advertisement with information prescribed in the circular before issuing the notices and copies of Financial Statements to the members.
- In case the company is not able to make payment of dividend through electronic mode due to lack of details of bank account, then upon normalization of the postal services, the company shall dispatch the dividend warrants/cheque to such shareholder by post.
- Companies which are not covered by the General Circular No. 18/2020 dated 21.04.2020 (i.e companies whose financial year has ended on 31/012/2019) and are unable to conduct their AGM in accordance with the framework provided in this circular, then an application to the concerned ROC shall be made for extension of AGM under section 96, at a suitable point of time (i.e before 30/09/2020).
Notification no. G.S.R. 268 (E). dated 29.04.2020 w.r.t amendment in Rule 6 [Compliances required by a person eligible and willing to be appointed as an independent director] under the Companies (Appointment and Qualification of Directors) Rules, 2014
The Notification shall come into force on the date of their publication in the Official Gazette i.e 29/04/2020.
in rule 6, in sub-rule (1), in clause (a) w.r.t Compliances required by a person eligible and willing to be appointed as an independent director, for the words “five months” the words “seven months” shall be substituted. The clause shall be read as follows:
Every individual who has been appointed as an independent director in a company, on the date of commencement of the Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019, shall within a period of “seven months” from such commencement apply online to the institute for inclusion of his name in the data bank for a period of one year or five years or for his life-time, and from time to time take steps as specified in sub-rule (2), till he continues to hold the office of an independent director in any company.
General Circular No. 18/2020 dated 21.04.2020 w.r.t holding of AGM.
Due to the pandemic situation, companies whose financial year has ended on 31/12/2019 (other than the first financial year) can hold the AGM within a period of nine months from the closure of the financial year i.e by 30/09/2020, instead of six months as prescribed in section 96 of the Act.
General Circular No. 16/2020 dated 13.04.2020 w.r.t Filing of various IEPF forms u/s 124 and 125 of the Companies Act, 2013
Filing various IEPF forms (IEPF -1, IEPF – 1A, IEPF -2, IEPF -3, IEPF -4, IEPF - 7) and e-verification of claims filed in e-form IEPF -5 till 30th September, 2020 without additional fees.
General Circular No. 14/2020 dated 08.04.2020 and 17/2020 dated 13.04.2020 w.r.t Clarification on passing of Ordinary and Special Resolutions in an EGM conducted through VC or OVAM.
- Considering the threat posed by COVID-19, companies can take all decisions of urgent nature requiring the approval of members, other than items of ordinary business or business where any person has a right to be heard through postal ballot/e-voting, without holding a general meeting, which required physical presence of members at a common venue.
- A company can hold an EGM if it is considered unavoidable on or before 30/06/2020 through Video Conferencing (VC) or Other Audio Visual Means (OAVM) by adopting the procedure w.r.t issue of notices, conducting of meeting through VC or OAVM, appointment of Chairman of the meeting, quorum of the meeting, security requirements, voting by the members, filing of all the resolutions passed in the meeting with ROC etc. as mentioned in the Circulars in addition to any other requirement provided in the Act and the rules made thereunder.
- The procedures are specified separately for the following companies: -
- Companies which are required to provide the facility for e-voting under the Act (i.e listed companies and every company having not less than 1000 members), or any other company which has opted for such facility.
- Companies which are not required to provide the facility of e-voting under the Act (i.e unlisted companies and company having less than 1000 members).
DIR-3KYC/DIR-3 KYC-Web and Active Company Tagging Identities and Verification (ACTIVE)
DIN holders of DINs marked as ‘Deactivated’ due to non-filing of DIR-3KYC/DIR-3 KYC-Web and those Companies whose compliance status has been marked as “ACTIVE non-compliant” due to non-filing of Active Company Tagging Identities and Verification (ACTIVE) e- form can become compliant once again by filing the above forms between 1st April, 2020 to 30th September, 2020 without any filing fee of INR 5000/INR 10000 respectively.
General Circular No. 12/2020 dated 30.03.2020 w.r.t Companies Fresh Start Scheme, 2020 (CFSS - 2020)
The scheme shall come into force from 01.04.2020 and shall remain in force till 30.09.2020
Features of the Scheme:-
-
Condoning the delay in filing the annual return and financial statements, various other statements, documents, returns, etc.
- Only normal fees for filing of documents in MCA 21 will be payable during the currency of CFSS – 2020
- Inactive companies can get their companies declared as dormant companies under section 455 (e-form MSC -1) or apply for striking off the name of the company (e-form - STK-2).
-
Immunity from launch of prosecution and proceedings for imposing penalty shall be provided only to the extent it pertains to any delay associated with the filings of belated documents.
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Immunity is only against delayed filings in MCA 21 and not against any substantive violation of law.
- Application for seeking immunity w.r.t belated documents filed under the Scheme may be made electronically in Form CFSS – 2020, after closure of the scheme and after the documents are taken on file or record or approved by the designated authority but, not after the expiry of 6 months from the date of closure of the scheme. No fee is applicable to this form.
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An immunity certificate w.r.t documents filed under the scheme shall be issued by the designated authority. After granting the immunity, the designated authority concerned shall withdraw the prosecutions pending, if any, penalties under section 454 of the Act, other than those referred in the circular.
-
If failed to file the documents under the scheme, the designated authority shall take necessary action under the Companies Act, 2013.
-
Scheme shall not apply in the following cases:-
- 1.Companies against which action for final notice for striking off the name u/s 248 has already been initiated by the designated authority.
- 2. Where any application has already been filed by the companies for action of striking off the name of the company.
- 3. Companies which have amalgamated
- 4. Where applications have already been filed by the companies for obtaining Dormant status before this Scheme
- 5. Vanishing companies
- 6. Where increase in authorized share capital is involved (Form SH-7)
- 7. Charge related documents (Form CHG-1, CHG-4, CHG-8, and CHG-9)
General Circular no. 6/2020 dates 04.03.2020 and 13/2020 dated 30.03.2020 w.r.t LLP Settlement Scheme, 2020
The scheme shall come into force from 01.04.2020 and shall remain in force till 30.09.2020
Features of the Scheme:-
- One-time condonation of delay in filing statutorily required documents with the Registrar (Form 3, Form 4, Form 8, Form 11)
- LLPs can file documents which have not been filed or registered in time on the payment of normal fees. No additional fee shall be payable for filing any belated documents under this scheme.
- LLPs who file the belated documents under this scheme and make good the default, shall not be subjected to prosecution by the Registrar for such defaults.
- This Scheme shall not apply to LLPs which have applications in Form 24 to the Registrar, for striking off their name from the register.
- LLPs who have not availed this scheme and are in default in filing of documents, necessary action shall be taken by the Registrar under LLP Act, 2008 on conclusion of this scheme.
Clarification dated 28.03.2020 w.r.t contribution to PM CARES Fund as eligible CSR activity
Any contribution made to the PM CARES Fund shall qualify as CSR expenditure under item no. (viii) of the Schedule VII of Companies Act, 2013.
General Circular no. 11/2020 dated 24.03.2020 w.r.t Measures under Companies Act, 2013 and LLP, Act, 2008 in view of COVID – 19 outbreak
- 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.
- Gap between 2 consecutive Board Meetings may extend to 180 days till the next 2 quarters, instead of 120 days as required under section 173 of the Companies Act, 2013.
- 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
- For the financial year 2019-20, if the lDs of a company have not been able to hold at least on meeting without the attendance of non-independent directors and members of the management as per schedule IV of the Companies’ Act, 2013, the same shall not be viewed as a violation.
- Under section 73(2)(c) of Companies Act, 2013, creation of the deposit repayment reserve of 20% of deposits maturing during the financial year 2020-21 shall be allowed to be complied with till 30th June, 2020, instead of 30th April 2020
- Under rule 18 of the Companies (Share Capital & Debentures) Rules, 2014 Investment or deposit of at least 15% of amount of debentures maturing in specified methods of investments or deposits may be complied with till 30th June 2020, instead of 30th April 2020,.
- An additional period of 180 more days is allowed for this filing Declaration for Commencement of Business under section 10A of the Companies Act, 2013 instead of declaration to be filed only within 180 days of incorporation.
- 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 Companies Act, 2013 shall not be treated as a non-compliance for the financial year 2019-20.
Order dated 25.02.2020 and 24.03.2020 w.r.t Companies (Auditor's Report) Order, 2020
- Supersession of the Companies (Auditor's Report) Order, 2016.
- Applicability of Companies (Auditor's Report) Order, 2020.
- 1.It shall apply to every company including a foreign company as defined in clause (42) of section 2 of the Companies Act, 2013 except as mentioned in the order for the financial years commencing on or after the 1st April, 2020.
General Circular no. 10/2020 w.r.t Clarification on spending of CSR funds for COVID-19 dated 23.03.2020
Spending of CSR funds for COVID -19 is eligible CSR activity. Funds may be spent for various activities related to COVIS-19 under item nos. (i) and (xii) of Schedule VII relating to promotion of health care, including preventive health care and sanitation, and disaster management.
Notification dated 19.03.2020 w.r.t matters may be held through VC or OVAM under Companies (Meetings of Board and its Powers) Rules, 2014.
From 19th March, 2020 till 30th June, 2020, the meetings w.r.t the following matters may be held through video conferencing or other audio visual means in accordance with rule 3:-
- the approval of the annual financial statements;
- the approval of the Board’s report;
- the approval of the prospectus;
- the Audit Committee Meetings for consideration of financial statement including consolidated financial statement if any, to be approved by the board under sub-section (1) of section 134 of the Act; and
- the approval of the matter relating to amalgamation, merger, demerger, acquisition and takeover.
Notification dated 28.02.2020 w.r.t Rule 6 [Compliances required by a person eligible and willing to be appointed as an independent director] of Companies (Appointment and Qualification of Directors) Rules, 2014
- Every individual who has been appointed as an independent director in a company as on 1st December 2019, shall within a period of five months from such date, apply online to the institute for inclusion of his name in the data bank for a period of one year or five years or for his life-time.
- An individual shall not be required to pass the online proficiency self-assessment test, when he has served as a director or key managerial personnel, for a total period of not less than ten years, as on the date of inclusion of his name in the databank, in one or more of the following:-
- 1. listed public company; or
- 2. unlisted public company having a paid-up share capital of rupees ten crore or more; or
- 3. body corporate listed on a recognized stock exchange”.
Notification dated 30.03.2020 w.r.t Indian Stamp (Collection of Stamp-Duty through Stock Exchanges, Clearing Corporations and Depositories) Rules, 2019
The government has put off implementation of the uniform stamp duty on transfer of shares, debentures, futures, options, currency and other capital market instruments to 1st July, 2020 instead of 1st April, 2020.