MCA Relaxations due to COVID -19 situations

The Ministry of Corporate Affairs of Government of India has released various circular during the month of April, May, 2021 regarding the relaxation under Companies Act, 2013, providing relaxation to the corporates due to COVID-19 pandemic. The details of relaxation are below:

1. Clarification on spending of CSR Funds for setting up makeshift hospitals and temporary COVID care facilities –

The General Circular No. 05 dated 22^nd April, 2021 of Ministry of Corporate Affairs in continuation to the Ministry’s General Circular No. 10 dated 23.03.2020 wherein it was clarified that spending of CSR funds for COVID -19 is an eligible CSR activity, it is further clarified that spending of CSR funds for ‘setting up makeshift hospitals and temporary COVID care facilities’ is an eligible CSR activity under item Nos. (i) and (xii) of Schedule VII of the Companies Act, 2013 relating to promotion of health care, including preventive health care, and, disaster management respectively.

The company may undertake the aforesaid activities in consultation with State Governments subject to fulfillment of Companies (CSR Policy) Rules, 2014.

2. Clarification on spending of CSR funds for ‘creating health infrastructure for COVID care’, ‘establishment of medical oxygen generation and storage plants’ etc.-

The General Circular No. 09 dated 5^th May, 2021 of Ministry of Corporate Affairs in continuation to the Ministry’s General Circular No. 10 dated 23.03.2020 wherein it was clarified that spending of CSR funds for COVID-19 is an eligible CSR activity, it is further clarified that spending of CSR funds for ‘creating health infrastructure for COVID care’, ‘establishment of medical oxygen generation and storage plants’, ‘manufacturing and supply of Oxygen concentrators, ventilators, cylinders and other medical equipment for countering COVID-19’ or similar such activities are eligible CSR activities under item nos. (i) and (xii) of Schedule VII of the Companies Act, 2013 relating to promotion of health care, including preventive health care, and, disaster management respectively.

Reference is also drawn to item no. (ix) of Schedule VII of the Companies Act, 2013 which permits contribution to specified research and development projects as well as contribution to public funded universities and certain organisations engaged in conducting research in science, technology, engineering, and medicine as eligible CSR activities.

The companies including Government companies may undertake the activities or projects or programmes using CSR funds, directly by themselves or in collaboration as shared responsibility with other companies, subject to fulfillment of Companies (CSR Policy) Rules, 2014 and the guidelines issued by this Ministry from time to time.

3. Relaxation on levy of additional fees in filing of certain Forms under the Companies Act, 2013 and LLP Act, 2008

As per General Circular No 06 dated 03.05.2021 the Ministry of Corporate Affairs has decided to relaxation on levy of additional fee at the e-Forms due for filing during 1^st April, 2021 to 31^st May, 2021 in view of the COVID 19 related restrictions and disruption. It has been decided to grant additional time up to 31^st July, 2021 for Companies/ LLP to file such forms without any additional Fee. Accordingly, no additional fee shall be levied upto 31^st July, 2021 for the delayed filing of forms which were/ would be due for filing during 1^st April, 2021 to 31^st May, 2021. For such delayed filing upto 31^st July, 2021 only normal fees shall be payable.

The list of forms is enclosed which are covered under this circular No 06 dated 03.05.2021.

4. Relaxation of time in filing of Form No CHG-1 and Form No CHG-9

The General Circular No. 07 dated 03.05.2021 of the Ministry of Corporate Affairs shall be applicable in respect of filing of Form No. CHG-1 and Form No 9 by a company or a charge holder, where the date of creation / modification of charge:

(a) is before 01.04.2021, but the timeline for filing such form had not expired under section 77 of the act as on 01.04.2021

Relaxation: In this case the period beginning from 01.04.2021 and ending on 31.05.2021 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 31.03.2021 shall be reckoned as 01.06.2021 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) falls on any date between 01.04.2021 to 31.05.2021 (both dates inclusive)

Relaxation: The period beginning from the date of creation / modification of charge to 31.05.2021 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 01.06.2021 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.

5. Relaxation of gap between two board meetings under section 173 of the Companies Act, 2013

As per General Circular No 08 dated 03.05.2021 of the Ministry of Corporate Affairs decided that the requirement of holding meetings of the Board of the companies within the intervals provided in section 173 of the Companies Act, 2013 (120 days) stands extended by a period of 60 days for first two quarters of the Financial Year 2021-22. Accordingly, the gap between two consecutive meetings of the Board may extend to 180 days during the Quarter- April to June 2021 and Quarter – July to September, 2021, instead of 120 days as required in the Companies Act, 2013.

List of forms providing waiver of additional fee as per Circular no. 06/2021 and 07/2021