MCA Corporate Update General Circulars

The Ministry of Corporate Affairs (“MCA”) vide 3 (three) General Circulars dated May 3, 2021 introduced several time and fee allied relaxations to alleviate the concerns of the corporate citizens facing constraints due to the severity of the COVID - 19 pandemic.

Accordingly, stakeholders can avail the following benefits:

  1. Extended Gap between Board Meetings
    Section 173 provides for conducting a minimum of 4 (four) board meetings every year with not more than 120 (one hundred and twenty) days between any 2 (two) consecutive board meetings.Pursuant to the MCA relaxation, the said interval of 120 (one hundred and twenty) days has been extended by a period of 60 (sixty) days to the effect that the gap between any 2 (two) consecutive board meetings may extend to a total of 180 (one hundred and eighty) days for Q1 (April-June 2021) and Q2 (July-September 2021) of FY 2021-22.Therefore, 1 (one) Board Meeting held in the half year ending September 2021 would suffice for compliance purposes, subject to the overall limit of having at least 4 Board Meetings in a year.
  2. Relaxation in timelines with respect to Charge Related Forms
    Charge creation / modification is to be filed with the Registrar of Companies within 30 (thirty) days of the event vide:

    • Form No.CHG-1 (other than Debentures)
    • Form No.CHG-9 (for Debentures including rectification)

    The period from April 1, 2021 to May 31, 2021 is now excluded for calculating the 30 (thirty) days period for filing Form CHG-1 and CHG-9.

    For Form CHG-1 and Form CHG-9, where the date of creation / modification of charge is before April 1, 2021 but the filing is yet to expire as on that date on account of pendency of 30 (thirty) days - the entire period beginning from April 1, 2021 to May 31, 2021 shall not be counted for the purposes of prescribed “30 (thirty) days”.

    After March 31, 2021, the count of 30 (thirty) days shall begin from June 1, 2021.

    Therefore, if one is yet to file Form CH-1 and/or Form CH-9 for a creation / modification for an event that occurred before April 1, 2021, then the period from April 1 - May 31, 2021 stands excluded from the count of the prescribed period of “30 (thirty) days” for the purposes of filing.

    In relation to additional fees for delayed filing, the same shall be triggered only after 30 (thirty) days which shall be calculated as follows:

    Delay Period = Period beginning from Event Date until March 31, 2021 + Period beginning from June 1, 2021 till Date of Filing.

    If Delay Period is less than 30 (thirty) days, then no additional fee is applicable.
    If Delay Period is more than 30 (thirty) days, then additional fee will be applicable

    In case the event of creation / modification of charge falls on or between April 1, 2021 to May 31, 2021, then the prescribed period of “30 (thirty) days” for the purposes of filing shall begin from June 1, 2021.

  3. Relaxation for Filing Forms except Charge Related Forms
    For Forms under the Companies Act, 2013 and LLP Act, 2008 except for Charge Related Forms such as Form CHG-1, CH-4 and CHG-9, MCA has extended the time period for such filings and accordingly, no additional fees shall be levied up to July 31, 2021 for the delayed filing of Forms which are due between April 1, 2021 to May 31, 2021.It may also be noted that the aforesaid MCA relaxations shall not apply to the following:

    1. Form CHG-1 and Form CHG-9 which have been filed before May 3, 2021;
    2. Forms for which the relevant time period expired prior to April 1, 2021;
    3. Forms for which the relevant time period expires at a future date, despite the exclusion of the period from April 1, 2021 to May 31, 2021; and
    4. Filing of Form CHG-4 for satisfaction of charge
Dated: May 6, 2021
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