Taking cognizance of the gravity of the public health situation, the Government in the Ministry of Corporate Affairs has relaxed the rules with respect to meetings of the board and dispensed with the necessity of holding physical meetings on matters relating approval of financial statements, board report, restructuring, etc. up to 30th June 2020 and also examining any other relaxations under the Companies Act 2013, that may be necessitated on account of COVID-19.
Since Companies/ LLPs are major employers, especially in urban areas, their full participation and cooperation are most essential to fully realize the object of social distancing as a means to contain the spread and mortality due to the disease. As part of disaster management to meet this urgent and severe health exigency, all companies/ LLPs are expected and strongly requested to put in place an immediate plan to implement the "Work from home" policy as a temporary measure till 31/03/2020, after which the appropriate authorities will review the position as per the evolving situation.
All companies/ LLPs are advised to implement the “Work from home" policy in their headquarters and field offices to the maximum extent possible, including by conduct of meetings through video conferences or other electronic /telephonic/computerized means.
To generate greater awareness and confidence on our state of readiness, ministry of corporate affairs has deployed a simple web form on 23rd March 2020, for companies/LLPs to confirm their readiness to deal with the COVID-19 threat and to report compliance for taking all possible precautionary measures to meet this public health situation and contribute to minimize its contagious effect. Form CAR (Companies Affirmation of Readiness towards COVID-19) has been deployed as a pure confidence-building measure to assess the readiness of the companies to deal with the COVID-19 threat in India. As such, no penalty or enforcement-related action is applicable. It is purely voluntary as part of our contribution towards joining the movement to fight against the spread of the disease.
Key features of Form CAR 2020 (Company Affirmation of Readiness towards COVID-19)
· Simple web form deployed on 23.03.2020 with minimum fields and can be filed from anywhere.
· No Payment of Fee and No Digital signature of authorized signatory of Companies/LLPs.
· Available as a ‘Post-login’ service for both ‘Registered’ as well ‘Business User.’
· Information to be provided by Company/LLP regarding the compliance of COVID-19 Guidelines, including work from home policy.
· Applicable for all Indian companies/ Foreign companies/ LLPs/ Foreign LLPs.
· Any one of the currently authorized signatories of the Company/LLP can submit the form online.
· Only one OTP verification and No Service request number (SRN) is generated for filing.
· System based acknowledgment shall be sent to the Email ID of the respective Company/Foreign Company/ LLP or Foreign LLP/Email ID of the Authorized Signatory who is providing the affirmation.
Special Measures under Companies Act, 2013 (CA-2013) and Limited Liability Partnership Act, 2008 in view of COVID-19 outbreak:
To support and enable Companies and Limited Liability Partnerships(LLPs) in India to focus on taking necessary measures to address the COVID-19 threat, including the economic disruptions caused by it, the following measures have been implemented by the Ministry of Corporate Affairs to reduce their compliance burden and other risks:
· 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, which will not only reduce the compliance burden, including financial burden of companies/ LLPs at large but also enable long-standing non-compliant companies/ LLPs to make afresh start.
· The mandatory requirement of holding meetings of the Board of the companies within the intervals provided in section 173 of the Companies Act, 2013 (CA-13) (120 days) stands extended by a period of 60 days till the next two quarters, i.e., till 30th September. Accordingly, as a one-time 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.
· The Companies (Auditor's Report) Order, 2020, shall be made applicable from the financial year 2O2O-2O21 instead of being applicable from the fiscal year 2019-2020 notified earlier. This will significantly ease the burden on companies & their auditors for the financial year 2019-20. A separate notification has been issued for this purpose on 25th March 2020.
· As per Para VII (1) of Schedule IV to the CA-13, independent Directors (IDs) are required to hold at least one meeting without the attendance of non-independent directors and members of management. For the financial year 2019-20, if the IDs of a company have not been able to hold such a meeting, the same shall not be viewed as a violation. The IDs, 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 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.
· The requirement under rule 18 of the Companies (Share Capital & Debentures)Rules, 2014, to invest or deposit at least 15% of the amount of debentures maturing in specified methods of investments or deposits before 30th April 2020, maybe complied with till 30th June 2020.
· Newly incorporated companies are required to file a declaration for Commencement of Business within 180 days of incorporation under section 10A of the CA-13. An additional period of 180 more days is allowed for this compliance.
· 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 CA-1 3 shall not be treated as a non-compliance for the financial year 2019-20.Further, keeping in view of the spread of novel Corona Virus (COVID19) in India, its declaration as a pandemic by the World Health Organisation (WHO) and the decision of Government of India to treat this as a notified disaster, it is hereby clarified that spending of CSR funds for COVID-19 is eligible CSR activity.