Lok Sabha Question No. 25 (UNSTARRED), answered on 2021-07-19
Subject: COVID-19 Impact on Companies
Ministry: CORPORATE AFFAIRS
Asked by: Tapir Gao, Lallu Singh

## GOVERNMENT OF INDIA

## MINISTRY OF CORPORATE AFFAIRS

## LOK SABHA

## UN-STARRED QUESTION NO. 25

ANSWERED ON MONDAY, JULY 19, 2021/ ASHADHA 28, 1943 (SAKA)

## COVID-19 IMPACT ON COMPANIES QUESTION

†25. SHRI TAPIR GAO:

SHRI LALLU SINGH:

Will the Minister of CORPORATE AFFAIRS

be pleased to state:

- (a)  whether  the  second  wave  of  corona  has  adversely  impacted  the economic conditions of the companies in the country;
- (b) if so, the details thereof;
- (c) whether the Government has taken any steps to improve the condition of the affected companies; and
- (d) if so, the details thereof?

## ANSWER

MINISTER OF STATE (INDEPENDENT CHARGE) OF THE MINISTRY OF STATISTICS AND PROGRAMME IMPLEMENTATION; MINISTER OF STATE

(INDEPENDENT CHARGE) OF THE MINISTRY OF PLANNING; AND MINISTER OF STATE FOR CORPORATE AFFAIRS

## [RAO INDERJIT SINGH]

(a) to (d): The number of new companies incorporated in the Country under the provisions of the Companies Act, 2013 from April 2021 to June, 2021 is 36,191    as  compared  to    18,968  number  of  new  companies  in  the corresponding period of last year which is an increase of 17,223 number of new Companies. The following steps have been taken by the MCA during the

- COVID-19 Pandemic:-
- (i)  The  Companies  Fresh  Start  Scheme  (CFSS),  2020  during  the  period 1.4.2020 to 31.12.2020 (launched to make a fresh start for companies to be a fully compliant company by allowing them to file belated documents in MCA 21 registry without any additional fees from 1 st  April to 31 st  December, 2020).  The  said  scheme  has  also  given  immunity  from  prosecutions  and proceedings for imposition of penalty which might arise on account of such delayed  filing  of  documents.  As  per  records,  473131  number  of  Indian Companies and 1065 number of Foreign Companies have been benefited by availing the CFSS, 2020 scheme for filing their pending documents.

कारपोरेट कार्य मंत्री

(ii)  The MCA introduced an LLP Settlement Scheme, 2020 to provide onetime  relaxation  in additional fees to the defaulting Limited  Liability Partnerships.

(iii)  Keeping in view the second COVID wave and considering the difficulties arisen due to resurgence of COVID-19 pandemic, the Ministry has granted relaxation on levy of additional fees for companies / LLPs in filing certain forms.

(iv)    Considering  the  difficulties  arisen  due  to  resurgence  of  COVID-19 pandemic, the Ministry vide General Circular no. 7/2021 dated 03.05.2021 has granted relaxation of timelines and condoned the delay in filing forms that are related to creation / modification of charges (CHG-1 Form and CHG9 Form) by a company or charge holder and where the date of creation / modification of charge is (i) before 1.4.2021, but the time line for filing such form had not expired under section 77 of the Act as on 1.4.2021; or (ii) falls on any date between 1.4.2021 to 31.5.2021 (both dates inclusive).

(v)  The  companies  have  been  allowed  to  hold  Extraordinary  General Meetings  (EGMs)  through  Video  Conferencing  (VC)  or  other  audio-visual means  (OAVM) complemented  with e-Voting facility/simplified voting through registered emails till 30 th  June, 2021.

(vi)  The  companies  have  been  allowed  to  conduct  their  Annual  General Meetings (AGMs) by Video Conferencing (VC) or other audio-visual means (OAVM) whose AGMs were due to be held in the year 2020 or become due in the year 2021 to conduct their AGMs on or before 31.12.2021. (vii) The Companies (Indian Accounting Standards) Rules, 2015 have been amended  vide  notification  dated  18.06.2021,  inter-alia,  to  extend  the benefits  of  COVID-19  related  rent  concession,  that  were  introduced  last year, from 30th June, 2021 to 30th June, 2022.

(viii)  The  mandatory requirement of holding meetings of the Board of the companies within the intervals provided in section 173 of the Companies Act, 2013 (CA-13) (120 days) were extended by a period of 60 days till next two quarters i.e., till 30th September, 2020.  Considering the second COVID wave, the Ministry further extended the aforesaid relaxation for the year 2021-22 and accordingly the time gap between two consecutive meetings of the Board may extend to 180 days during the Quarter - April to June 2021 and Quarter - July to September, 2021, instead of 120 days as required in the Companies Act, 2013.

(ix) The Ministry enhanced the period to thirteen months from 1 st  December, 2019 within which existing Independent directors may apply online for

inclusion  of  their  names  in  the  databank  for  Independent  Directors  vide amendments in the Companies (Appointment & Qualification of Directors) Rules,  2014  from  time  to  time.    Further,  the  Companies  (Creation  and Maintenance of databank of Independent Directors) Rules, 2019 have been amended  vide  notification  dated  18.06.2021  to  provide  that  in  case  an individual has delayed in applying to the Institute for inclusion of his name in  the  data  bank  of  Independent Directors or in case of delay in renewal thereof, the Institute shall allow such inclusion or renewal, as the case may be, after charging a further fees of one thousand rupees on account of such delay.

(x)    Non-compliance of minimum residency in India for a period of at least 182 days by at least one director of every company, under Section 149 of the CA-13 shall not be treated as a non-compliance for the financial year 201920 and 2020-21. (xi) Requirement for investing 15% of amount of debentures maturing in a particular year in specified instruments has been done away with for Listed companies  &  NBFCs  when  such  debentures  are  issued  on  a  private placement basis. (xii) Time allowed to Auditors and Audit Firms for filing NFRA-2 form with the NFRA  has  been  extended  till  a  total  period  of  270  days  in  view  of  the difficulties faced during COVID-19 related disruption. (xiii) Last date of submission of Cost Audit Report by the Cost Auditor to the management of the company has been extended till 31 st  December 2020 and additional fee has been relaxed for filing of CRA-4 (form for filing of cost audit report) for financial year 2019-2020.

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