Ministry of Corporate Affairs - Special measures with regard to various compliances

• Relaxation in form filing fee payable to the Ministry of Corporate Affairs ('MCA') - April 1, 2020 to September 30, 2020 is declared as moratorium period. Irrespective of the due date, no additional fees will be charged for late filing in respect of any document, return, statement etc., with MCA-21 Registry, during this period. The move is aimed at reducing the compliance burden and financial burden at large. This is applicable for companies and LLPs. 

• Relaxation in Board Meetings - The minimum requirement to hold 4 board meetings every year with not more than 120 days gap between two consecutive meetings stands extended by a period of 60 days till next two quarters i.e., till September 30, 2020. For example, where if a company has conducted its board meeting on March 15, 2020 and the next meeting is due before July 13 (upto 120 days), the board meeting can now be held upto September 11, 2020 (180 days).

• Deferment of Companies (Auditor's Report) Order, 2020 - MCA has postponed the applicability of Companies (Auditor's Report) Order, 2020 and same shall now be made applicable from the financial year 2020-2021 instead of from 2019-2020 notified earlier. This is aimed to ease the burden on corporate compliances and audit for the year 2019-2020.

• Condonation of delay in holding meeting of Independent Directors - Independent Directors ('IDs') are required to hold at least one meeting without the attendance of non-independent directors and members of management. For the year 2019-20, if the IDs of a company have not been able to hold even one meeting, the same shall not be viewed as a violation.

• Time Extension for Creation of Deposit Reserve etc - Every Company having outstanding deposits shall deposit at least 20 per cent of the amount of its deposits maturing during the financial year 2020-2021, on or before April 30, 2020 which shall be kept in a separate bank account to be called Deposit Repayment Reserve Account. The requirement can now be complied with till June 30, 2020. Similarly, the requirement to invest in specified instruments 15 per cent of debentures maturing during 2020-2021 has been extended from April 30, 2020 to June 30, 2020.

• Declaration of Commencement of Business - Certificate of Commencement of Business ('CCoB') is mandatory compliance under Companies Act, 2013 as only after obtaining the CCoB, a company can start any business-related activities. Extension is granted in time limit for newly incorporated companies, which were required to file CCoB within 6 months of incorporation, by an additional 6 months.

• Relaxation in Resident Directorship - Every company must have at least one resident director who has stayed in India for at least 182 days in the previous calendar year. Non-compliance of minimum residency in India (stay in India of at least 182 days) shall not be treated as a violation of the law.

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