COMPLIANCE RELAXATIONS UNDER THE COMPANIES ACT, 2013 AND RELATED RULES – Eshwars
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COMPLIANCE RELAXATIONS UNDER THE COMPANIES ACT, 2013 AND RELATED RULES

S.No. Category Present requirement Relaxation
1 Relaxation with respect to Directors and Meetings:
a Gap between two board meetings (for unlisted companies) Presently the gap between two board meetings cannot exceed 120 days. The Ministry has provided a one-time relaxation for the gap between two board consecutive board meetings, which may extend to 180 days. This relaxation is applicable till next 2 quarters i.e., till 30th September 2020.

 

b Gap between two board /audit committee meetings (for listed companies) – as per SEBI (LODR) Regulations, 2015 Presently the gap between two board/audit committee meetings cannot exceed 120 days. The listed entities are exempt from observing this maximum stipulated time gap between 2 meetings for the meetings held

or proposed to be held between the period

December 1, 2019 and June 30, 2020.

c Companies to whom independent director is applicable the Independent directors are required to hold at least one meeting without the attendance of non-independent directors and members of the management the Ministry has relaxed the requirement of holding the Independent directors meeting for Financial year 2019-20.

 

d Relaxation with respect to resident director: Presently every Company is required to have at least one director who stays in India for a total period of not less than 182 days during the financial year. Considering the current travel restrictions, the Ministry has relaxed this requirement for the financial year 2019-20.
2 Companies (Auditor’s Report) Order, 2020:

 

The Ministry had notified Companies (auditors Report) Order, 2020 prescribing the matters to be reported by the statutory auditors of certain class of Companies. The said matters were required to be reported by the statutory auditor in its auditor’s report for the financial year 2019-20 To ease the burden on companies and their auditors for the financial year 2019-20, the Companies (Auditor’s Report) Order, 2020 is made applicable from financial year 2020-21 instead of financial year 2019-20.

 

3 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. Considering the COVID-19 situation the Ministry has extended the date by which the amount of the Deposit Repayment Reserve can be transferred to a separate bank account to 30th June 2020.

 

4 Companies having outstanding non-convertible debentures:

 

The Companies which have issued Non-convertible debentures are required to invest or deposit at least 15% of the amount of debentures maturing in specific methods of investments or deposits before 20th April 2020. Considering the COVID-19 situation the Ministry has extended the date of meeting this compliance till 30th June 2020.

 

5 Newly incorporated companies

 

A Newly incorporated entity is required to file declaration of commencement of business within 180 days of incorporation. Considering the COVID-19 situation the Ministry has provided an additional period of 180 days for meeting this compliance.

 

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