Relief given by MCA to Companies on Account of COVID

Amid the COVID-19 pandemic and lockdown all over the country and most parts of the world, through its vide General Circular No.11/2020, the Ministry of Corporate Affairs (MCA) introduced special relaxations, immunities, and reliefs in ROC Compliance requirements to the Companies registered in India. Such reliefs have been provided for the survival of, small, medium, or large companies and Limited Liability Partnership (LLP) in the tough times. Here we have discussed these special relaxations and reliefs in ROC Compliance given by the MCA as below-

  • No additional fee for late filing: For supporting the Companies and LLPs, MCA has announced that no additional fees or fines will be charged for the late filing of documents related to ROC Filing as part of reliefs in ROC Compliance. This will apply and valid from 1st April 2020 to 30th September 2020.
  • Relaxation in due dates: MCA to make the companies more law binding and to fulfill the ROC Compliance has provided with the following relaxation on due dates-
  • CARO is applicable from FY 2020-21 instead of FY 2018-20: The Companies Auditor’s Report Order (CARO) 2020, which was applicable for the financial year 2018 to 2020, has now been made available for FY 2020-21 instead as part of the reliefs in ROC Compliance.
  • The gap between 2 consecutive Board Meetings can be extended to a maximum of 180 days: Earlier the maximum gap between two consecutive Board Meetings was set to a maximum of 120 days but as one-time relaxation and relief in ROC Compliance this period has been extended to 180 days till the next two quarters that is 30th September 2020.
  • Declaration of Commencement of business for newly incorporated companies in Form INC-20A has been provided with an additional 180 days to the 180 days already set for its filing i.e. 180 days + 180 days (Extra).
  • The due date for Creation of the deposit reserve of 20% of maturing deposits during the financial year 2020-21 as per Section 73(2) (c) of CA-13 has been extended till 30th June 2020 for companies to fulfill the requirements of ROC Compliance in case of OPC, Private Limited Company, Public Limited Company or Section 8 Company, etc.
  • The due date for the requirement to invest 15% of the maturing debentures in the financial year 2020-21 as per the specified instrument prescribed in Rule18 of the Companies (Shares Capital and debentures) Rules, 2014 has been extended till 30th June 2020.
  • As part of reliefs in ROC Compliance, the following items will not be treated as non-compliance or violation for Financial Year 2019-20:
  • Non-compliance with the residency requirements for at least 1 director of every company for the stay within India for a minimum period of 182 days.
  • The inability of the company to hold a separate Independent Directors Meeting for ROC Compliance.

For the Directors holding Director Identification Number (DIN), that have been marked “DEACTIVATED” due to non-filing of Form UR-3KK or Form CAR-3KYC-Web and for companies for which the status of the ROC Compliance has been marked as “ACTIVE NON-COMPLIANT” due to non-filing of the e-Form ACTIVE (Active Company Tagging Identities and Verification, have been allowed by the MCA to be compliant again. This has been brought up in pursuance of the General Circular No.11 issued on 24th March 2020 and Circular No.12 issued on 30th March 2020. The companies can file DIR-3KYC or DFR-3KYC-Web or e-form ACTIVE without paying any filing fees or charge of Rs.5000 or Rs.10000, from 1st April 2020 to 30th September 2020.

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    Author: Anil Agrawal
    EZYBIZ India Consulting LLP, New Delhi. The firm is business and tax consultancy firm providing consultancy in Taxation, Regulatory, Transfer pricing, Valuation, Corporate funding and Business set up matters. He may be reached at 9899217778 or anil@ezybizindia.in.
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