Use of analytics and AI augment India’s vision for #aatmanirbharta & development Plan to come up with a machine learning driven MCA-21 Version 3.0 is in process: Budget 2021
In the Budget 2021, it was mentioned that govt. will be establishing technology based on data analytics, artificial intelligence, machine learning tools in the areas of finance, taxation and online compliance monitoring among others.
Accordingly, MCA has now established a Central Scrutiny Centre (CSC) for carrying out scrutiny of Straight Through Processes (STP) e-forms filed by the companies under the Company Law made thereunder.
The Ministry of Corporate Affairs established a Central Scrutiny Centre (CSC) for carrying out scrutiny of Straight Through Processes (STP) e-forms filed by the companies under the Act and the rules.
The notification said that the CSC shall function under the administrative control of the e-governance Cell of the Ministry of Corporate Affairs.
The CSC shall carry out scrutiny of the aforesaid forms and forward findings thereon, wherever required, to the concerned jurisdictional Registrar of Companies for further necessary action under the provisions of the Act and the rules made thereunder.
“The CSC shall be located at the Indian Institute of Corporate Affairs (IICA), Plot No. 6, 7, 8, Sector 5, IMT Manesar, District Gurgaon (Haryana), Pin Code- 122050,” the MCA notified.
The notification shall come into force from the 23rd March, 2021.
Companies will be given three months’ extension to hold their AGMs.
A major relief has been granted to around 1.2 million companies, by MCA granting extension of 3 months for holding annual general meeting.
The MCA had earlier allowed companies to hold virtual AGMs due to Covid-19. However, companies were finding it difficult to complete the audit functions and finalize the annual reports.
The Companies with AGM due date as 30.09.2020 can now conduct their AGM by 31.12.2020, as per MCA.
There is no need of separate application in form GNL-1 for extension.
Companies are required to hold the AGM within six months of the end of a financial year which means by September 30, 2020 for FY2019-20. Now, they can hold it by December 31 this year.
Below are the excerpt of the extension notification by the various ROCs.
Section 96 of the Companies Act 2013 provide that every company other than a One Person Company , shall in each year hold an a general meeting as its Annual General Meeting (AGM) and shall specify the meeting as such in the notices calling it and not more than fifteen months shall elapse between the date of one AGM of a company and that of the next
And WHEREAS the first proviso of section 96 of the Act provides that in case of the first AGM, it shall be held within a period of nine months from the date of closing of the first financial year of the company and in other case, within a six months, from the date of closing of the financial year
And WHEREAS, the third proviso to Sub-section (I) of section 96 of the Act provides that the Registrar may, for any special reason, extend the time within which any annual general meeting, other than the first annual general meeting, shall As held, by a period not exceeding three months
And WHEREAS, various representations have been received from the companies, bodies and Professional Institutes pointing out that several companies are finding it difficult to hold their AGM for the financial year ended on 31.03.2020 due to the difficulties faced in view of the COVID 19 pandemic
And WHEREAS, the representations have been considered and the undersign is of the considered opinion that due to such unprecedented special reasons, the time within which the AGM for the financial year ended on 31.03.2020 is required to be held as per provisions to be extended
The undersigned hereby extend the time to hold the AGM, other than the first AGM, for the Financial year ended 31.03.2020 for companies that are unable to hold their AGM within due date of holding or period of three months from the due date are extended without companies requiring to file GNL 1 Form.
The approval for extension of AGM upto 3 months from the due date of AGM shall be deemed to have been granted by the undersigned without any further action on the part of Company.
The MCA issued directions to the registrar of companies (ROCs) to issue orders to even those who have not filed formal applications to this effect. Even those applications, which have already already filed, but not approved, or rejected, are also covered under this relief, MCA said in a release.
Due to the widespread of COVID-19 and social distancing norms and consequential restrictions linked thereto, MCA has received several representations to allow companies to hold their Annual General Meeting for the financial year ended on 31st March, 2020 beyond the statutory period provided in section 96 of the Companies Act, 2013.
The matter was examined and MCA clarified vide General Circular No. 20/2020, dated 05.05.2020 regarding holding of AGM through video conferencing (VC) or other audiovisual means (OAVM), the companies which were unable to hold their AGM were advised to prefer applications for extension of AGM at a suitable point of time before the concerned Registrar of Companies under Section 96 of the Act.
MCA, in this regard, vide General Circular no. 28/2020 dated 17th August,2020 has issued clarification on extension of Annual General Meeting for the financial year ended as at 31.03.2020.
Provisions of holding Annual General Meeting (AGM) as per Companies Act, 2013.
According to section 96 of the Companies Act, 2013, companies are to hold their Annual General Meeting (AGM) within a period of 6 months from the date of closing of the financial year and companies which are to hold their first AGM shall be held within a period of 9 months from the date of closing of the financial year of that company.
The Ministry once again reiterated that the companies which are unable to hold their AGM for the financial year ended on March 31, 2020, despite availing the relaxations provided in MCA General Circular No. 20/2020 ought to file their applications in E-Form GNL-1 for seeking an extension of time in holding of AGM for the financial year ended on March 31, 2020, with the concerned Registrar of Companies on or before 29th September, 2020.
Also the Ministry has directed Registrars of Companies to consider all such applications (Filed in E-Form GNL-1) liberally in view of the hardships faced by the stakeholders and to grant an extension for the period as applied for (up to three months i.e. 31st December) in such applications.
Procedure to file Application seeking extension of time for holding Annual General Meeting:
1.
Chairman /Director of the company shall call for a meeting of Board of Director for which a notice must be send at least 7 days before holding of Meeting of Board.
2.
Convene a Board Meeting on the specified date.
3.
Pass a resolution for extension of time limit for holding annual general meeting specifying the due reason for extension of AGM.
4.
File an application to Registrar of Companies in E-Form No. GNL-1. (Reason for not holding AGM, along with other necessary information to be provided)
5.
Attach the Certified true copy of the Board Resolution in E-Form-GNL-1.
6.
The registrar will examine the application on the specific grounds and grant an extension.
Obtain the Certificate of Grant of extension in holding Annual General Meeting of theCompany.
Convening of Annual General Meeting in extended period:
Once the extension is granted, the company may convene the Annual General Meeting of the Company within the period as allowed by the Registrar of Companies.
In a major relief to companies, the Securities and Exchange Board of India (SEBI) today extended the deadline for submission of financial results for the quarter, half-year, and financial year ended 30 June 2020 to September 15. The SEBI circular said that it has received representations requesting an extension of time for submission of financial results for the quarter or half year-ended 30 June 2020, due to the shortened time gap between the extended deadline for submission of financial results for the period-ended 31 March 2020 and the quarter or half year-ended June 30, 2020.
Under Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘LODR Regulations’), a listed entity is required to submit its quarterly, half-yearly, or annual financial results within 45 days or 60 days, as applicable, from the end of each quarter, half year, or financial year.
Accordingly, listed entities were required to submit the financial results for the quarter, half-year-ended 30 June 2020 on or before 14 August 2020.
Earlier, the regulatory body had also extended the timeline for submission of financial results by listed entities for the quarter, half-year, or financial year-ended 31 March 2020 to 31 July 2020, due to the impact of the coronavirus pandemic.
SEBI further said that today’s announcement shall come into force with immediate effect and advised all stock exchanges to bring the provisions of this circular to the notice of all listed entities.
It has asked the stock exchanges to bring the provisions of the circular to the notice of all listed entities and also disseminate on their websites.
Meanwhile, SEBI’s move to relax the deadlines is expected to give more time to companies already struggling with operations part amid the pandemic.
In-line with the efforts to provide relief to the sagging businesses, Finance Minister Nirmala Sitharaman earlier announced to decriminalise some offences under the Companies Act.
The SEBI has also introduced new norms to give more fund-raising flexibility to stressed firms.
The amendments can help promoters get financial investors on board without losing control of the company.
The IBBI’s discussion paper said that the processes under the Insolvency and Bankruptcy Code (IBC) require a unique combination of skill sets in terms of subject matter knowledge and management skills for an IP and at different stages of transactions, different sets of skills are called for.
In what may bring about major reform and efficiency in the insolvency regime in India, the Insolvency and Bankruptcy Board of India (IBBI) has proposed to limit the number of cases an insolvency professional can handle to five as it noted that few insolvency professionals (IP) are handling too many cases
In a recent discussion paper, the board noted the “skewed” work allocation and has come up with a matrix for allocation of cases.
Citing observations by courts and tribunals, the paper said: “Keeping in mind the provisions of the Companies Act, 2013, the skewed work allocation amongst the IPs and the observations of the Supreme Court or Adjudicating Authority, and given the expansive and intense responsibilities of an IP in corporate processes, it is proposed to issue necessary guidelines to IPs advising them to limit the maximum number of assignments handled by them, to five, at a given point of time.”
As per the proposed matrix an insolvency resolution professional (IRP) can handle a total of five cases of resolution or liquidation, including voluntary liquidation, wherein the turnover of the corporate debtors is less than or equal to Rs 1,000 crore. As the matrix progresses, an IRP handling the case of a corporate debtor with the turnover of Rs 50,000 crore would be able handle only that very case, and no more.
“On the basis of information available, it is observed that a few IPs are handling too many assignments under the Code, which is detrimental to the institution of IP in the long run,” it noted.
The IBBI’s discussion paper said that the processes under the Insolvency and Bankruptcy Code (IBC) require a unique combination of skill sets in terms of subject matter knowledge and management skills for an IP and at different stages of transactions, different sets of skills are called for.
A spike in one area of expertise will not be sufficient to create a uniform experience for stakeholders. Further, it cannot be ignored that no two IPs possess identical sets of qualification, experience, skills and expertise, it said.
“Similarly, no two CIRPs are same as it involves diverse businesses, complex corporate structures, varied stakeholders. The said restriction on an IP will put a check on undesirable instances of delay and disturbance to the processes led by IPs while simultaneously handling too many assignments under the Code.”
The Board was of the view that with limits in place, quality of output is expected to improve and it will facilitate the realisation of the objective of value maximisation as enshrined in the Code.
The major inputs for violation will be through complaints and therefore, the cost of surveillance for the Board may not be significant. Further, this will be conducive for development of the market for professionals as more talent will be drawn towards IP profession, it added.
The IBBI has sought public comments on the proposal till July 25, 2020.
• The extension is applicable to both deposits as well as debentures maturing this fiscal • The extension is given in view of the requests received from various stakeholders seeking more time on account of covid-19 • The move comes at a time when businesses are struggling with a weak balance sheet after the national lockdown
The government has given a three-month extension to companies to set aside a part of the deposits and debentures maturing in FY21 in a dedicated account, a statutory requirement under the Companies Act.
The Ministry of Corporate Affairs (MCA) said in a circular that the due date of April end, which was extended till end of June in a circular in March, has been further extended till end of September, 2020.
The circular, signed on Friday, said the extension was given in view of the requests received from various stakeholders seeking more time on account of covid-19.
The extension is applicable to both deposits as well as debentures maturing this fiscal. The Companies (Share Capital and Debentures) Rules of 2014 said every company needs to set up a Debenture Redemption Reserve before end of April every year and deposit in that not less than 15% of the debentures maturing in that year. This investment could be in the form of bank deposits or central and state government securities or specified corporate bonds.
Similarly, companies accepting deposits from its members have to deposit not less than 20% of such deposits maturing in a financial year and in the subsequent financial year in a scheduled bank in a separate account called deposit repayment reserve account. For this requirement under the Companies Act too, the government had in March given three months extra time till end of June. Due dates for both the requirements now stand extended till end of September, 2020.
The move comes at a time when businesses are struggling with a weak balance sheet after the national lockdown to check the spread of coronavirus infections wiped out two months of business. The government’s over ₹20 trillion stimulus package relied mostly on bank credit to businesses rather than on more upfront measures.
The Ministry of Corporate Affairs (MCA) has in the last few months taken a series of steps that will reduce the compliance burden and lower the cost of capital for businesses.
In a view of the pandemic situation due to COVID-19 outbreak and several representations made, by the stake holders, Ministry of Corporate Affairs (MCA) has came out with a new scheme called “Scheme for relaxation of time for filing forms related to creation or modification of charges under the Companies Act, 2013” for the purpose of condoning the delay in filing certain forms related to creation/ modification of charges.
This important relaxation by MCA in relation to creation and modification of Charges under the Companies Act, 2013 is very significant, especially during the pandemic situation due to COVID-19, is detailed as below:
F.No. 02/05/2020 CL-V
Government of India
Ministry of Corporate Affairs
5th Floor, ‘A’ Wing, Shastri Bhawan,
Dr. Rajendra Prasad Road, New Delhi-1.
General Circular No. 23/2020
Dated: 17th June, 2020
To
All Regional Directors,
All Registrar of Companies,
All Stakeholders.
Subject: Scheme for relaxation of time for filing forms related to creation or modification of charges under the Companies Act, 2013.
Sir/Madam,
The companies are required to file forms related to creation or modification of charges within the timelines provided in section 77 of the Companies Act, 2013 (Act), i.e. a total of 120 days of the creation or modification of charge. In case, the company fails to register the charge within the period of thirty days referred to in sub-section (1) of section 77, the charge holder may file the form related to creation or modification of charges under section 78 of the Act, within the overall timelines for filing of such form under section 77.
On account of the pandemic caused by the COVID-19, representations have been received in this Ministry, requesting that the timelines related to filing of certain charge related forms may be suitably relaxed so as to provide a window of compliance for the registration of charges. Under the Companies Fresh Start Scheme, 2020 as laid out in the General Circular No. 12/2020, dated 30.03.2020, the benefit of waiver of additional fees was not extended to the charge related documents. Therefore, it has been suggested that some dispensation may be provided for filing of charge related documents as well.
In view of the above, the Central Government in exercise of its powers under section 460 read with section 403 of the Act and the Companies (Registration Offices and Fees) Rules, 2014 (Fees Rules) has decided to introduce a Scheme, namely “Scheme for relaxation of time for filing forms related to creation or modification of charges under the Companies Act, 2013” for the purpose of condoning the delay in filing certain forms related to creation/modification of charges.
The details of the scheme are as under: –
(i) The scheme shall come into effect from the date of issue of this Circular.
(ii) Applicability: The scheme shall be applicable in respect of filing of Form No. CHG-1 and Form No. CHG-9 (both referred as ‘form’ or ‘forms’) by a company or a charge holder, where the date of creation/modification of charge:
(a) is before 01.03.2020, but the timeline for filing such form had not expired under section 77 of the Act as on 01.03.2020, or
(b) falls on any date between 01.03.2020 to 30.09.2020 (both dates inclusive).
(iii) Relaxation of time:
(a) In case a form is filed in respect of a situation covered under sub-para (ii)(a) above, the period beginning from 01.03.2020 and ending on 30.09.2020 shall not be reckoned for the purpose of counting the number of days under section 77 or section 78 of the Act. In case, the form is not filed within such period, the first day after 29.02.2020 shall be reckoned as 01.10.2020 for the purpose of counting the number of days within which the form is required to be filed under section 77 or section 78 of the Act.
(b) In case a form is filed in respect of a situation covered under sub-para (ii)(b) above, the period beginning from the date of creation/modification of charge to 30.09.2020 shall not be reckoned for the purpose of counting of days under section 77 or section 78 of the Act. In case, the form is not filed within such period, the first day after the date of creation/modification of charge shall be reckoned as 01.10.2020 for the purpose of counting the number of days within which the form is required to be filed under section 77 or section 78 of the Act.
(iv) Applicable Fees:
(a) In regard to sub-para (iii)(a) above, if the form is filed on or before 30.09.2020, the fees payable as on 29.02.2020 under the Fees Rules for the said form shall be charged. If the form is filed thereafter, the applicable fees shall be charged under the Fees Rules after adding the number of days beginning from 01.10.2020 and ending on the date of filing plus the time period lapsed from the date of the creation of charge till 29.02.2020.
(b) In regard to sub-para (iii)(b) above, if the form is filed before 30.09.2020, normal fees shall be payable under the Fees Rules. If the form is filed thereafter, the first day after the date of creation/modification of charge shall be reckoned as 01.10.2020 and the number of days till the date of filing of the form shall be counted accordingly for the purposes of payment of fees under the Fees Rules.
(v) The Scheme shall not apply, in case:
(a) The forms i.e.CHG-1 and CHG-9 had already been filed before the date of issue of this Circular.
(b) The timeline for filing the form has already expired under section 77 or section 78 of the Act prior to 01.03.2020.
(c) The timeline for filing the form expires at a future date, despite exclusion of the time provided in sub-para (iii) above.
(d) Filing of Form CHG-4 for satisfaction of charges.
This issues with the approval of the Competent Authority.
