COMPANY LAW UPDATES – EXTENSION OF RELAXATIONS GIVEN PURSUANT TO COVID-19 PANDEMIC: – Eshwars
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COMPANY LAW UPDATES – EXTENSION OF RELAXATIONS GIVEN PURSUANT TO COVID-19 PANDEMIC:

i. BOARD MEETINGS – BUSINESS CONTINUITY THROUGH VIDEO CONFERENCING

Ministry of Corporate Affairs (MCA) had Vide notification dated 19th March 2020 waived the requirement of physical presence of directors in the board meeting, in respect of matters which required the quorum (minimum number of directors to constitute a valid meeting) to be present in one place. This relaxation was available till 30th June 2020.

MCA had Vide notification dated 23rd June 2020 extended the aforesaid relaxation by further period of 3 months; 30th September 2020.

ii. HOLDING OF EXTRA ORDINARY GENNERAL MEETINGS THROUGH VIDEO CONFERENCING (VC) OR OTHER AUDIO-VISUAL MEANS (OAVM) (“REMOTE EGM”):

Amidst the COVID-19, Ministry of Corporate Affairs (MCA) vide its General Circulars No.14/2020 dated 08th April 2020 and No.17/2020 dated 13th April 2020 had, with respect to matters requiring approval of shareholders, requested the Companies, to obtain shareholders’ approval through postal ballot/e-voting till 30th June 2020, in order to avoid holding a general meeting which requires physical presence of the shareholders at a common venue and if the extra ordinary general meetings is considered unavoidable, then the said EGM was allowed to be conducted through Video Conferencing (VC) or other audio-visual means (OAVM) (“Remote EGM”), to obtain approval from the shareholders on various urgent matters.

The MCA vide its circular dated 15th June 2020 has allowed the Companies to conduct their extra ordinary general meetings through VC or OAVM till 30th September 2020.

The detailed procedure for conducting the meeting through VC or OAVM has been discussed in our blog   http://eshwars.com/blog/clarification-on-passing-of-shareholder-resolutions-during-covid-19-conduct-extra-ordinary-general-meeting-egm-of shareholders-remotely/

iii. COMPANIES ACCEPTING DEPOSITS:

 The Companies accepting deposits, are required to deposit at least 20 percent of the amount of its deposits maturing during the following financial year (Deposit Repayment Reserve), in a scheduled bank in a separate bank account. Such sum is to be transferred on or before 30th April each year.

MCA vide circular dated 24th March 2020 extended the date by which the amount of the Deposit Repayment Reserve can be transferred to a separate bank account to 30th June 2020.

The Ministry has vide its circular dated 19th June 2020 further extended the time for meeting this requirement till 30th September 2020.

iv. COMPANIES HAVING OUTSTANDING NON-CONVERTIBLE DEBENTURES:

The Companies which have issued Non-convertible debentures are required to invest or deposit atleast 15% of the amount of debentures maturing in specific methods of investments or deposits before 20th April 2020.

MCA had extended the date for this compliance till 30th June 2020.  It has further extended the time for meeting this compliance till 30th September 2020, vide its circular dated 19th June 2020.

v. EXTENSION OF TIME FOR INDEPENDENT DIRECTORS TO INCLUDE THEIR NAME IN THE DATA BANK OF INDEPENDENT DIRECTORS:

The Ministry has vide its notification dated 23rd June 2020, extended the time for the independent directors to include their name in the data bank of independent directors till 30th September 2020.

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