Updates under Companies Act, 2013
Extension for holding the Extra Ordinary General Meeting through Video Conferencing:
Considering the continuing pandemic situation, MCA vide its circular dated 31st December, 2020 have allowed the companies to conduct EGM through Video Conference or other audio visual means up to 30th June, 2021.
Extension for transacting restricted items through Video Conferencing in Board Meetings:
In view of the pandemic situation, MCA has further relaxed the requirement of physical presence in Board Meetings in respect of restricted items until 30th June, 2021 instead 31st December 2020 and the same can be transacted through Video Conferencing or other Audio Visual Means.
Extension for reservation of name allowed on payment of prescribed fees:
The MCA vide its notification dated 24th December 2020 has newly introduced the facility to extend the validity of a name reserved by using the web service SPICE+ upon payment of additional prescribed fees. This facility shall be effective from 26th January 2021.
Reclassification of Unissued shares is allowed through e-Form SH-7:
The MCA vide notification dated 24th December 2020 has modified the e-Form SH-7 pertaining to notice to the Registrar regarding any alteration in the share capital of the Company. A new provision has been added for cancellation of unissued shares of one class and increase in shares of another class in the e-form.
Commencement of Companies (Amendment) Act, 2020 :
The MCA has enforced the following amendments of the Companies (Amendment) Act, 2020. These amendments majorly relate to re-categorization of criminal offences into civil wrongs.
Further extension for implementation of Companies (Auditor’s Report) Order:
The MCA vide its notification dated 17th December, 2020 has further extended the effective date for implementation of CARO from 1st April 2020 to 1st April 2021.
Purchase of Minority Shareholding in Demat Form:
The MCA vide notification dated 17th December, 2020 has inserted a definition for corporate action and has provided a detailed procedure for purchase of minority shareholding in demat form.
Relaxation for online proficiency assessment of Independent Directors:
MCA vide its notification dated 18th December 2020 has relaxed the following requirements for Independent Directors:
- The minimum percentage required to pass the online proficiency test has been reduced from 60% to 50 %.
- Increase in the time limits for passing the proficiency test from 1 year to 2 years from the date of registering the name with the Institute.
- Further relaxations in the exemptions from online proficiency tests have been granted to Independent Directors on satisfaction of prescribed criterias.
Extension of due date for Cost Audit report:
The MCA has further extended the due date for filing of Cost Audit report in e-Form CRA-4 until 31st December, 2020.
E-Voting Facility Provided by Listed Entities:
SEBI vide circular dated December 09, 2020, has clarified that in order to increase the efficiency of the voting process, pursuant to a public consultation, it has been decided to enable e-voting to all the demat account holders, by way of a single login credential, through their demat accounts/ websites of Depositories/ Depository Participants. Demat account holders would be able to cast their vote without having to register again with the ESPs, thereby, not only facilitating seamless authentication but also enhancing ease and convenience of participating in e-voting process.
FEMA and relevant RBI updates
Export of Goods and Services – RBI delegated more powers to the AD banks:
With a view to further enhance the ease of doing business and quicken the approval process, RBI has decided to delegate more powers to the Authorized Dealer Category – I banks (AD banks) in the areas of
- Direct Dispatch of Shipping Documents
- Write-off of unrealized Export bills
- Set-off of Export receivables against Import payables and
- Refund of Export Proceeds.
24×7 Availability of Real Time Gross Settlement (RTGS) System:
The RTGS system was made available round the clock on all days of the year with effect from 14th December, 2020.
Opening of Current Accounts – Need for Discipline:
RBI vide its circular dated 6th August, 2020 has introduced certain conditions to bring in discipline for opening of Current Accounts by those who have credit exposure with the banks. Upon a review, RBI has now permitted banks to open the specific current account under various statutes without any restriction as specified in the above referred circular. Provided, the above permission is subject to the condition that the banks shall ensure that these accounts are used only for permitted or specified transactions.
Card Transactions limit in Contactless mode without Authentication increased to Rs.5000:
RBI increases per transaction limit for Additional Factor of Authentication (AFA) relaxation for contactless card transactions from ₹2,000/- to ₹5,000/-.
Banks not to declare dividends for the FY ending 31.03.2020:
In view of the ongoing stress and heightened uncertainty on account of COVID-19 and in order to conserve capital to support the economy and further strengthen the banks’ balance sheets, while at the same time support lending to the real economy, RBI directed that banks shall not make any dividend payment on equity shares from the profits pertaining to the financial year ended March 31, 2020.
Introduction of Liquidity Adjustment Facility (LAF) and Marginal Standing Facility (MSF) for Regional Rural Banks (RRBs):
In order to provide an additional avenue for liquidity management to Regional Rural Banks (RRBs), RBI has decided that Liquidity Adjustment Facility (LAF) and Marginal Standing Facility (MSF) will be extended to Scheduled RRBs meeting the following criteria:
- Implemented Core Banking Solution (CBS)
- There is a minimum CRAR of 9% and
- Fully compliant with the terms and conditions for availing LAF and MSF issued by Financial Markets Operations Department (FMOD), Reserve Bank of India.