Blog Post

Changes in Company Law Compliances

As per The Companies Act, 2013 – Every company is required to file the annual accounts & annual returns within 30 days and 60 days respectively from the conclusion of the Annual General Meeting. The ROC filing of annual accounts is governed under Section 129 (3), 137, of The Companies Act , 2013 read with Rule 12 of the Company (Accounts) Rules, 2014 and annual return is governed under Section 92 of the Companies Act, 2013 read with Rule 11 of the Companies (Management and Administration) Rules, 2014.

The Changes in Compliance are as follows:

  • Newly incorporated companies are required to file a declaration for Commencement of Business within 6 months of incorporation. An additional time of 6 more months shall be allowed.
  • Applicability of Companies (Auditor’s Report) Order, 2020 shall be made applicable from the financial year 2020-2021 instead of from 2019-2020 notified earlier. This will significantly ease the burden on companies and auditors for the year 2019-20.
  • The mandatory requirement of holding meetings of the Board of the companies within prescribed interval provided in the Companies Act (120 days), 2013, shall be extended by a period of 60 days till next two quarters i.e., till 30th September.
  • The requirement to create a Deposit 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.
  • Additional fees shall not 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 a ‘fresh start’
  • Schedule 4 to the Companies Act, 2013, states that Independent Directors 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 considered as a violation.
  • The requirement to invest 15% of debentures maturing during a particular year in specified instruments before 30th April 2020, maybe done so before 30th June 2020.
  • 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, shall not be treated as a violation.
  • Due to the emerging financial distress faced by most companies on account of the large-scale economic distress caused by COVID 19, it has been decided to raise the threshold of default under section 4 of the IBC 2016 to Rs. 1 crore (from the existing threshold of Rs. 1 lakh). This will by and large prevent triggering of insolvency proceedings against MSMEs. If the current situation continues beyond 30th of April 2020, we may consider suspending sections 7, 9 and 10 of the IBC 2016 for a period of 6 months so as to stop companies at large from being forced into insolvency proceedings in such force majeure causes of default.

NEW DELHI: The government Tuesday introduced a bill in Lok Sabha  to amend the Companies Act proposing 72 changes to removing criminality from host of offences under the act and paving the way for direct overseas listing of Indian companies.

Leave a Comment

Your email address will not be published. Required fields are marked *

Style switcher RESET
Body styles
Color settings
Link color
Menu color
User color
Background pattern
Background image