MCA Reliefs under Companies Act 2013 during COVID -19 by CS Annu Sharma

⧬⧭Dear Professionals

Hope You all are Doing Well

Almost 6 months of Year 2020 is almost about to END and till date Ministry of Corporate Affairs-MCA allowed many reliefs for Compliances under Companies Act, 2013 various amendments are in place due to current scenario in India which is getting worst every day.

In Today’s write up we shall discuss about Extensions in Due Dates for Filing of Forms, reliefs in Convening of Board Meetings and General meetings as per Companies Act, 2013. From March 2020 there are almost 20 + notifications from Ministry of Corporate Affairs-MCA under various sections of Companies Act, 2013 and the most important Notification was Issued by MCA on 30^th March, 2020 for CFSS,2020 due to Novel Coronavirus -COVID-19. Further we will discuss about every important notification by MCA till date.

1. AMENDMENT IN RULE 3 and 4 OF COMPANIES (MEETINGS OF BOARD AND ITS POWERS) RULES, 2014.

The very first relief was provided by MCA on 19th March, 2020 was regarding Holding of Board Meeting through video conferencing for restricted matters, this is the most wanted amendment due to Pandemic in India as well as in world.

As per Rule 4, The following matters shall not be dealt with in any meeting held through video conferencing or other audio-visual means-

 

I. the approval of the annual financial statements;

II. the approval of the Board’s report;

III. the approval of the prospectus;

IV. 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

V. The approval of the matter relating to amalgamation, merger, demerger, acquisition and takeover.

 

Provided that where there is quorum presence in a meeting through the physical presence of directors, any other director may participate conferencing through video or other audio-visual means.

 

AS PER NOTIFICATION DATE MARCH, 19, 2020

 

After amendment aforementioned matters can be finalize in Board Meeting through the mode of video Conferencing till 30^th June, 2020.

 

1. TO CONVENE BOARD MEETINGS WITH A TIME GAP OF 180 DAYS

Another relief provided by MCA on 24th March, 2020 for One Time relaxation for Holding of one Board Meeting with A gap of 180 days. As per the Notification 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 Companies Act, 2020 till 30^th September, 2020. Let just understand the relaxation by following example.

1.      If Last Board Meeting held on January 02, 2020 then what shall be the due date of the next meeting?	The due date for the next board meeting is June 30, 2020 i.e. 180 days from the last meeting.
2.      If Last Board Meeting held on March 18, 2020 then what shall be the due date of the next meeting?	The due date for the next board meeting is September 16, 2020 i.e. 180 days from the last meeting.

 

1. COMPANY FRESH START SCHEME, CFSS 2020

According to this scheme if any Company OR LLP having any E-form pending for filing with ROC (Registrar of Companies) whose due date has been already passed can be file under this Scheme without any Additional Fees till 30th September, 2020 and post taking benefit of this scheme, Companies shall be required to submit the details of Forms filed under this scheme by filing an additional form before 31^st March, 2021 but this scheme is not applicable on all E-form available at MCA since forms related to Charge and E-form SH -7 shall not be allowed to filed under this scheme.

Period of filing Pending Forms under CFSS, 2020	Before 30th September, 2020
Period of filing Details of Forms filed under CFSS,2020	From 1st October, 2020 to 31st March, 2020

In the E-form filed after taking advantage of CFSS,2020 companies shall be required to mention the SRN of forms filed during the period ending 30^th September, 2020 and Certificate regarding the same shall be issued by MCA.

There are approximately 76 forms which can be filed under this scheme without any additional fee and those Companies couldn’t complete their filings since many years due to the fear of heavy additional fee can take advantage of this scheme before 30^th September, 2020, this will provide many corporates an ease of doing business.

1. COMPANIES WHO’S FINANCIAL YEARENDED ON DECEMBER 31, 2019 MAY CONVENE THEIR AGM TILL 30^TH SEPTEMBER, 2020.

As per the Companies Act, 2013, companies must hold an AGM within six months from the closure of the previous financial year and not beyond 15 months of the last AGM. The relaxation was given on account of many such companies requesting leniency on the AGM rules owing to the social distancing norms and the lockdown resulting from the Covid-19 outbreak,

MCA has issued circular on April 21, 2020 to give relaxation, that if the financial year of any Company ended on December 31, 2019, Instead of June 30, 2020 they can convene their Annual General Meeting any time before September 30, 2020 without it being viewed as violation under the Companies Act, 2013.

1. AGM AND EOGM THROUGH VIDEO CONFRENCING MODE.

MCA till date issued multiple circulars regarding holding of general meetings through video conferencing mode which provides Clarification on Passing Ordinary and Special Resolutions by Companies in EOGM/ AGM through Video Conferencing based on the classification of companies on account of the Pandemic.

Due to difficulties in sending physical copies of financial statements, the ministry has allowed companies to send their financial statements, along with board’s reports, auditor’s reports and other required documents through email. This is a welcome step by our Indian govt. which will create evolution in our corporate culture during this adverse scenario. Now I have summarized some essential aspects of Circulars by MCA on holding General Meeting by Video Conferencing.   

Particulars	For companies which are required to provide the facility of e-voting or any other company which has opted for such facility	For companies which are not required to provide the facility of e-voting.
Which type of companies can hold its AGM through VC or OAVM?	All companies which are required to provide the facility of e-voting or any other company which has opted for such facility.	Company which has in its records, the email addresses of at least half of its total number of members, who:
		in case of a Nidhi, hold shares of more than Rs. 1,000 in face value or more than 1% of the total paid-up share capital, whichever is less;
		in case of other companies having share capital, who represent not less than 75% of such part of the paid-up share capital of the company as gives a right to vote at the meeting;
		in case of companies not having share capital, who have the right to exercise not less than 75% of the total voting power exercisable at the meeting.
What is the due care in the process of holding AGM through VC/OAVM?	The companies shall ensure that all other compliances associated with the provisions relating to general meetings viz making of disclosures, inspection of related documents/registers by members, or authorizations for voting by bodies corporate, etc as provided in the Act and AOA of the company are made through electronic mode.
Whether the recorded transcript should be available on the website of company?	In case of a public company, the recorded transcript of the meeting, shall as soon as possible, be also made available on the website (if any) of the company.
What should be kept in mind before scheduling the meeting?	Convenience of different persons positioned in different time zones shall be kept in mind before scheduling the meeting.
What should be the capacity to avail such facilities?	Such facility must have a capacity to allow at least 1000 members to participate on a first-come-first-served basis.	Such facility must have a capacity to allow at least 500 members or members equal to the total number of members of the company (whichever is lower) to participate on a first-come-first-served basis.
Mode of Sending Notices	Before sending the notices and copies of the financial statements, etc., a public notice by way of advertisement be published at least once in a vernacular newspaper in the principal vernacular language of the district in which the registered office of the company is situated and having a wide circulation in that district, and at least once in English language in an English newspaper having a wide circulation in that district, preferably both newspapers having electronic editions, and specifying in the advertisement the following information.-	Notice to members can be sent through email, where the same is available.
	statement that the AGM will be convened through VC or OAVM in compliance with applicable provisions of the Act read with this read with Circular no. 14/2020, dated 08th April, 2020, Circular no. 17/2020, dated 13th April, 2020 and Circular no. 20/2020, dated 5th May, 2020;	A copy of the notice shall also be prominently displayed on the website, if any, of the company.
	the date and time of the AGM thorough VC or OAVM;	The company contact all those members whose e-mail addresses are not registered with the company over telephone or any other mode of communication for registration of their e-mail addresses before sending the notice for meeting to all its members; or
	availability of notice of the meeting on the website of the company and the stock exchange, in case of a listed company;	Where the contact details of any of members are not available with the company or could not be obtained, it shall cause a public notice by way of advertisement to be published immediately at least once in a vernacular newspaper in the principal vernacular language of the district in which the registered office of the company is situated and having a wide circulation in that district, and at least once in English language in an English newspaper having a wide circulation in that district and specifying in the advertisement the following information:
	the manner in which the members who are holding shares in physical form or who have not registered their email addresses with the company can cast their vote through remote e-voting or through the e-voting system during the meeting;	That the company intends to convene an AGM in compliance with applicable provisions of the Act read with Circular no. 14/2020, dated 08th April, 2020, Circular no. 17/2020, dated 13th April, 2020 and Circular no. 20/2020, dated 5th May, 2020   and for the said purpose it proposes to send notice to all its members by e-mail after at least 3 days from the date of publication of the public notice;
	the manner in which the persons who have not registered their email addresses with the company can get the same registered with the company;	the details of the e-mail address along with a telephone number on which the members may contact for getting their e-mail addresses registered for participation and voting in the AGM.
	the manner in which the members can give their mandate for receiving dividends directly in their bank accounts through the Electronic Clearing Services (ECS) or any other means;	Further the Chairman of the meeting shall satisfy himself and cause to record the same before considering the business in the meeting that all efforts feasible under the circumstances have indeed been made by the company to enable to participate and vote on the items being considered in the meeting.
	any other details considered necessary by the company.
	Further the Chairman of the meeting shall satisfy himself and cause to record the same before considering the business in the meeting that all efforts feasible under the circumstances have indeed been made by the company to enable to participate and vote on the items being considered in the meeting.
How attendance of genuine members can be ensured?	Companies should try to avail VC or OAVM facilities which provide unique password to each member for joining the meeting. In case of closely held companies, common password can be adopted, since all the members are known
How voting will be done?	Before the actual date of the meeting, the facility of remote e-voting shall be provided in accordance with the Act and the rules.	During the meeting
	During the meeting by e-voting.	If number of present is less than 50, then by way of show of hands unless poll is demanded
		In all other cases, by poll.
Do we need to publish advertisement for e-voting	All formalities for conducting e-voting as provided in Section 108 read with rules is required to be undertaken.	NA
Appointment of  proxy for such meetings?	The facility of appointment of proxies by members will not be available for such meeting.
Appointment of  Chairperson of the meeting?	Chairperson shall be as per AOA. If such Chairperson is not available the Chairperson for the meeting shall be appointed in the following manner:	Chairperson shall be as per AOA. If such Chairperson is not available the Chairperson for the meeting shall be appointed in the following manner:
	Where there are less than 50 members present at the meeting, the Chairperson shall be appointed in accordance with Section 104 of the Act;	Where there are less than 50 members present at the meeting, the Chairperson shall be appointed in accordance with Section 104 of the Act;
	In all other cases, the Chairperson shall be appointed by an e-voting.	In all other cases, the Chairperson shall be appointed by poll through email.
Mandatory Attendance of auditor & Independent Director.	At least one independent director (where the company is required to appoint), and the auditor or his authorized representative, who is qualified to be the auditor shall attend such meeting through VC or OAVM. Further additionally the presence of chairman of various committee of the Board as required under the Act in the AGM shall continue to apply to AGM through VC or OAVM.

With this relaxation, the management and compliance team can plan conducting the AGM this year with clarity, I tried to include majority aspects of benefits available as per MCA but still if any query or doubt remain unanswered through this write up , you may write in comment section.

 

Author Can Be Contacted At: CS Annu Sharma =91- 7021848742 or Drop Mail at csannusharma123@gamil.com