News from the desk of Ministry of Corporate Affairs (MCA)
Extension of validity of the Companies Fresh Start Scheme, 2020 and LLP Settlement Scheme, 2020
On receipt of various representation from the stakeholders, the Ministry of Corporate Affairs (‘MCA’) had vide General Circular No. 30/2020 and General Circular No. 31/2020 dated 28th day of September 2020, extended the validity of the ‘Companies Fresh Start Scheme, 2020’ and ‘LLP Settlement Scheme, 2020’ from 30th day of September 2020 till 31st day of December 2020.
The said schemes were rolled out by MCA in the month of March this year which allows Companies and LLPs to make a fresh beginning as fully compliant entities by making good any defaults related to statutory filings, without paying the additional fees irrespective of the duration of the default.
The Complete text of the Circular No. 30/2020 and General Circular No. 31/2020 dated 28th day of September 2020 can be viewed at below link:
http://www.mca.gov.in/Ministry/pdf/GeneralCircularNo.30_28092020.pdf
http://www.mca.gov.in/Ministry/pdf/GeneralCircularNo.31_28092020.pdf
Extension of Time – Scheme for relaxation of time for filing forms related to creation or modification of charges
On receipt of various representation from the stakeholders, in furtherance to the General Circular no. 23/2020 dated 17th day of June 2020, MCA has vide General Circular no. 32/2020 dated 28th day of September 2020 extended the due dates of filing of form CHG-1 and CHG-9 as under:
1. In case of filing of Form CHG-1 and Form CHG-9 related to creation/modification of charges where the timeline for filing such forms had not expired under section 77 of the Act i.e. 120 days has not expired as on 01st day of March 2020 – the 1st day for the purpose of counting the number of days within which the form is required to be filed under section 77 or 78 of the Act, will now be reckoned as 1st day of January 2021 instead of 1st day of October 2020.
2. In case, where the due date of filing of Form CHG-1 and Form CHG-9 falls between 01st day of March 2020 to 31st day of December 2020 (both days inclusive) – – from 1st day of October 2020 to 1st day of January 2021.
The Scheme continues to be not applicable to:
1. Form CHG-1 and CHG-9 which had already been filed before the date of issue of this Circular;
2. The timeline of 120 days for filing of Form CHG-1 and Form CHG-9 has already expired under section 77 or section 78 of the Act prior to 01st March 2020; and
3. Filing of Form CHG-4 relating to the satisfaction of Charges.
The Complete text of the Circular can be viewed at below link:
http://www.mca.gov.in/Ministry/pdf/GeneralCircularNo.32_28092020.pdf
Extension of time for holding EGM by Video Conferencing and Other Audio Visual Means
On receipt of numerous representations from the stakeholders concerning the difficulties faced by them on account of the threat posed by COVID-19, in holding physical EGM to pass ordinary and special resolutions of urgent nature, MCA had vide its General Circular No. 33/2020 dated 28th day of September 2020 has further extended the time period for the convening of EGM by Video Conferencing mode or any other audiovisual mode till 31st day of December 2020.
The said Circular allows holding of EGM by Video Conferencing mode or any other audiovisual mode for the passing of resolutions of urgent nature other than (i) ordinary business and (ii) any business in respect of which directors or auditors have a right to be heard at any meeting.
All other procedural formalities as stated in the General Circular No. 14/2020 dated 8th day of April 2020; General Circular No. 17/2020 dated 13th April 2020 and General Circular No. 22/2020 dated 15th day of June 2020 will remain the same.
The Complete text of the Circular can be viewed at below link:
http://www.mca.gov.in/Ministry/pdf/GeneralCircularNo.33_28092020.pdf
EXTENSION OF TIME FOR DEPOSIT OF REPAYMENT RESERVE AND DEBENTURE REDEMPTION RESERVE (General Circular No. 34/2020 dated 29th September 2020)
A. Deposit Repayment Reserve:
In terms of the provisions of Section 73(2)(c) of the Act, a Company which accepts deposits from its members, needs to deposit on or before the 30th day of April each year, an amount equivalent to twenty percent (20%) or more of the amount of its deposits maturing during the following financial year and kept in a scheduled bank in a separate bank account to be called deposit repayment reserve account.
The said date of 30th day of April 2020 which was earlier extended till 30th day of June 2020 and 30th day of September 2020 vide General Circular no. 11/2020 dated 24th day of March 2020 and General Circular no.24/2020 dated 19th day of June 2020 respectively has now been further extended till 31st day of December 2020 for the purposes of deposit in deposit repayment reserve account equivalent to 20% of the amount of its deposits maturing during the financial year 2020-21.
B. Debenture Redemption Reserve:
In terms of Rule 18 of the Companies (Share Capital and Debentures) Rules, 2014, every Company which had issued its Debentures needs to create a Debenture Redemption Reserve (for the purpose redemption of Debentures) and on or before the 30th day of April in each year, invest or deposit, as the case may be, a sum which shall be at least fifteen percent (15%), of the amount of its Debentures maturing during the year ending on the 31st day of March of the next year, in any one or more prescribed methods.
The said date of 30th April 2020 which was earlier extended till 30th day of June 30, 2020, and 30th day of September 2020 vide General Circular no. 11/2020 dated 24th day of March 2020 and General Circular no.24/2020 dated 19th day of June 2020 respectively, has now been further extended till 31st day of December 2020 for the purpose of deposit or invest an amount equivalent to 15% of Debentures which are going to mature during the financial year 2020-21.
The Complete text of the Circular can be viewed at below link:
http://www.mca.gov.in/Ministry/pdf/GeneralCircularNo.34_29092020.pdf
Last Updated: 30th September 2020 This article is contributed by: Luv Malhotra Senior Manager, LegalTag: MCA