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MCA ANNOUNCES RELAXATION ON ACCOUNT OF RESURGENCE OF COVID PANDEMIC

Considering the difficulties which have arisen due to the pandemic, the Ministry of Corporate Affairs (“MCA”) on May 03, 2021, via the following General Circulars, has provided relaxation on levy of additional fees, extension for filing various charge forms and extension for holding board meetings under the Companies Act, 2012 (“Companies Act”) and Limited Liability Partnership Act, 2008 (“LLP Act”).

(a). General 06/2021 Circular No. Relaxation on levy of additional fees in filing of certain forms under the Companies Act and LLP Act. Please find the circular at http://www.mca.gov.in/Ministry/pdf/GeneralCircularNo6_03052021.pdf
(b). General 06/2021 Circular No. Relaxation of time for filing of forms related to creation or modification of charges under the Companies Act. Please find the circular at http://www.mca.gov.in/Ministry/pdf/GeneralCircularNo7_03052021.pdf
(c). General 06/2021 Circular No. Extension of time limits for holding meetings of Board under Section 173 of the Companies Act. Please find the circular at http://www.mca.gov.in/Ministry/pdf/GeneralCircularNo8_03052021.pdf
  1. Relaxation on levy of additional fees in filing of certain forms (other than charge related forms) under the Companies Act and LLP Act

    MCA has decided to grant additional time limit up to July 31, 2021 for companies/LLPs to file such forms (other than CHG-1, CHG-4 and CHG-9) which are due for filing during April 01, 2021 to May 31, 2021, without any additional fees. MCA has clarified that only normal fees shall be payable for such delayed filings.

  2. Relaxation of time for filing of forms related to creation or modification of charges under the Companies Act

    MCA, through its Circular, has decided to allow relaxation of time and condone delay in filing forms CHG-1 and CHG-9 related to creation/modification of charge, by a company or charge holder, where the date of creation/modification of charge:

    1. Is before April 01, 2021, but the timeline for filing such form has not expired under Section 771 of the Companies Act as on April 01, 2021;

      1. Relaxation of time

        The period beginning from April 01, 2021 and ending on March 31, 2021 shall not be reckoned for the purpose of counting the number of days under Section 77 and 782 of the Companies Act.

        In case the form is not filed within such period, the first day after March 31, 2021 shall be reckoned as June 01, 2021 for the purpose of counting the number of days within which the form is required to be filed under Section 77 and 78 of the Companies Act.

      2. Applicable fees

        If the form is filed on or before May 31, 2021, the fees payable as on March 31, 2021 under the Fee rules for the said form shall be charged.

        If the form is filed after May 31, 2021, the applicable fees shall be charged under Fee Rules after adding the number of days beginning from June 01, 2021 and ending on the date of filing plus the time period lapsed from the date of the creation of charge till March 31, 2021.

    2. Falls on any date between April 01, 2021 to May 31, 2021

      1. Relaxation of time

        The period beginning from the date of creation/modification of charge to May 31, 2021 shall not be reckoned for the purpose of counting of days under Section 77 or 78 of the Companies Act.

        In case the form is not filed within such period, the first day after the creation/modification of charge shall be reckoned as June 01, 2021 for the purpose of counting the number of days within which the form is required to be filed under Section 77 and 78 of the Companies Act.

      2. Applicable fees

        If the form is filed before May 31, 2021, normal fees shall be payable under the Fee Rules,

        If the form is filed after May 31, 2021, the first day after the date of creation/modification of charge shall be reckoned as June 01, 2021 and the number of days till the date of filing of the form shall be counted accordingly for the purpose of payment of fees under the Fee Rules.

    The Circular shall not apply:

    1. if CHG-1 and CHG-9 forms has already been filed before the issue of the Circular;
    2. if the timeline for filing the form has expired under Section 77 or 78 of the Companies Act prior to April 01, 2021;
    3. if the timeline for filing the form expires at a future date despite the exclusion of time provided in the Circular;
    4. to filing of CHG-4 form for satisfaction of charges.
  3. Extension of time limits for holding meetings of Board under Section 173 of the Companies Act

    MCA has decided to extend the time limit for holding meeting of the Board of the company of companies within the intervals provided in Section 1733 (currently 120 ((one hundred and twenty)) days) by a period of 60 (sixty) days. Accordingly, the gap between two consecutive meetings of the Board may extend to 180 (one hundred and eighty) days during the April-June 2021 and July-September, 2021 quarters, instead of 120 (one hundred and twenty) days as required under the Companies Act.

1 Section 77- Duty to register charges- “It shall be the duty of every company creating a charge within or outside India, on its property or assets or any of its undertakings, whether tangible or otherwise, and situated in or outside India, to register the particulars of the charge signed by the company and the charge-holder together with the instruments, if any, creating such charge in such form, on payment of such fees and in such manner as may be prescribed, with the Registrar within thirty days of its creation.” Provided that the Registrar may, on an application by the company, allow such registration to be made within a period of three hundred days of such creation on payment of such additional fees as may be prescribed: Provided further that if registration is not made within a period of three hundred days of such creation, the company shall seek extension of time in accordance with Section 87:
2 Section 78- Application for registration of charge- “Where a company fails to register the charge within the period specified in Section 77, without prejudice to its liability in respect of any offence under this Chapter, the person in whose favour the charge is created may apply to the Registrar for registration of the charge along with the instrument created for the charge, within such time and in such form and manner as may be prescribed and the Registrar may, on such application, within a period of fourteen days after giving notice to the company, unless the company itself registers the charge or shows sufficient cause why such charge should not be registered, allow such registration on payment of such fees, as may be prescribed.”
3 Section 173- Meetings of Board- “(1) Every company shall hold the first meeting of the Board of Directors within thirty days of the date of its incorporation and thereafter hold a minimum number of four meetings of its Board of Directors every year in such a manner that not more than one hundred and twenty days shall intervene between two consecutive meetings of the Board.”

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