The document summarizes recent updates to the Companies Act 2013 in India, including increasing the threshold for mandatory appointment of a Company Secretary to Rs. 10 crores, expanding requirements for secretarial audit reports, introducing new forms like SPICe+ for easier incorporation, extending various filing timelines due to COVID-19, and allowing meetings to be conducted virtually.

1. CS Meenakshi Jayaraman
Recent updates in
Companies Act, 2013

2. Credits and Acknowledgments
Sundar Rajan S

3. Legends used in the Presentation
Act Companies Act, 2013
AGM Annual General Meeting
CARO Companies (Auditor’s Report) Order
CS Company Secretary
CSR Corporate Social Responsibility
EGM Extra Ordinary General Meeting
FY Financial Year
GOI Government of India
IBC Insolvency and Bankruptcy Code
Ind AS Indian Accounting Standards
MCA Ministry of Corporate Affairs
NBFC Non Banking Financial Company
Sec Section

4. Presentation Schema
Relaxation in
appointing Company
Secretary
Requirement of
Secretarial Audit
report
Notification of
takeover provisions
Extension of time limit
for giving declaration
by Nidhi Companies
Introduction of CARO,
2020
SOPs for Registrars to
deal with certain
proceedings
Special measures with
the outbreak of
COVID-19
Relaxation norms for
conducting Meetings
Extension of timeline
for holding AGM by
Companies following
calendar year

5. Relaxation in appointing Company Secretary
5
A Company other than a company covered under Rule 8 has to appoint a whole time
Company Secretary (CS) if the paid-up capital exceeds Rs. 5 Crores (Before Amendment)
MCA vide notification dated 3rd January, 2020 issued Companies (Appointment and
Remuneration of Managerial Personnel) Amendment Rules, 2020 wherein threshold is
increased for mandatory appointment of CS
A private company shall have a whole-time CS where the paid-up share capital is Rs. 10
Crores or more (After amendment)
The erstwhile limit of Rs. 5 Crores is increased to Rs. 10 Crores. This shall be applicable in
respect of financial years commencing on or after 1st April, 2020

6. Requirement of Secretarial Audit report
6
Additional criteria imposed in Rule 9(1) Companies (Appointment and Remuneration of
Managerial Personnel) Amendment Rules, 2020 mandates certain Companies to obtain secretarial
audit report
Every listed Company, and public Company having a paid-up share capital of Rs. 50 Crores or more
or turnover of Rs.250 Crores or more are required to obtain a secretarial audit report from
practicing CS every year
With effect from 1st April, 2020, Companies having outstanding loans or borrowings from banks or
public financial institutions of Rs. 100 Crores or more shall also obtain secretarial audit report
from a practicing CS
An explanation has been added in Rule 9 which states that paid-up capital, turnover and
outstanding loans or borrowings shall be reckoned from the latest audited financial statement
This amendment brings large private Companies and other public companies also into the ambit
of obtaining secretarial audit report
Rule 9 refers to Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

7. Introduction of SPICe+ form for incorporation
As part of GOI’s Ease of Doing Business initiatives, MCA introduced SPICe+ form for incorporation
of a Company. This form has been deployed on MCA portal since 23rd February, 2020
It is a web-based form which stores the data filled in the form permanently with specific
application number for each Company. Hence, chances of loss of data is eliminated
Only for affixing DSCs, the web-based form has to be converted into PDF. Till pre-scrutiny
stage, everything has to be done in the portal itself
Since the data is stored in the portal, in case of re-submission of the Form, there is no need
to fill in the details again. Instead, the details shall be altered in the same application itself
Additional features are brought in with AGILE PRO form (linked form to SPICe+) like opening
of bank account, professional tax registration, etc.
SPICe+ form might seem to be quite complicated for some users to access but it is a welcome move

8. Extension of form BEN-2 filing
8
Extension of form BEN-2 filing up to 31st March 2020 (MCA circular dated 1st
January, 2020 )
Deployment of AOC-4 (Ind AS) forms for NBFC
 MCA vide its circular dated 30th January, 2020 introduced two new forms
namely Form AOC-4 NBFC (Ind AS) and Form AOC-4 CFS NBFC (Ind AS)
 This form has to be filed by those NBFCs that are required to comply with
Ind AS
 Accordingly, last date for filing these 2 forms for the FY 2018-19 was
extended till 31st March, 2020

9. Provision of Companies (Winding Up) Rules, 2020
9
Winding Up Rules which comprise 191 Rules and 95 forms has been notified with
effect from 1st April 2020
Filing of forms by Insolvency Professional under IBC
 Insolvency Professional / Resolution Professional / Liquidator (IP) shall
initially file the NCLT order approving their appointment in form INC-28.
 This form has to be approved by ROC.
 Post approval, IP shall be allowed to file any form by choosing the
designation as Chief Executive Officer.

10. Notification of takeover provisions under
Sec 230 of the Act
10
1. Application for making takeover offer in terms of Sec 230(11); and
2. Application to the Tribunal in the event of any grievances with respect to the
takeover offer of Companies other than listed Companies as per Sec 230(12)
(Notified with effect from 3rd February, 2020)
E-forms for Nidhi Companies
 Nidhi Company related forms NDH-1, NDH-2 and NDH-3 shall have to be filed only as e-
forms, with effect from 11th February, 2020 onwards
 Any such Nidhi forms filed on or after 11th February, 2020 as attachments to GNL-2 e-form and
RD-1 e-form shall not be processed by ROCs and RDs and shall be rejected

11. Extension of time limit for giving declaration
by Nidhi Companies
11
Declaration by Nidhi Companies incorporated under the Act, before the
commencement of Rules*,
shall be in Form NDH-4 and it has to be made within 1 year
from the date of its incorporation or within 6 months*
from the commencement of Rules, whichever is later
Rules refers to Nidhi (Amendment) Rules, 2019 and it commenced on 15th August, 2019
*MCA vide notification dated 14th February, 2020 extended the period of 6 months to 9 months

12. Introduction of CARO, 2020
12
In order to bring more transparency & trust in Financials Statements of Companies, MCA
vide Order dated 25th February, 2020 introduced CARO 2020
CARO 2020 is far more detailed including as many as 21 broad items, out of which there are
either new items or new details in existing items
CARO 2020 makes auditor to report more disclosures in his/her audit report with respect to
cash losses, loan defaults, immovable properties, auditor’s resignation, etc.
CARO 2020 was earlier brought with retrospective effect from FY 2019-20 i.e. Financial
Statements for the period 2019-20 onwards
However, MCA vide another Order dated 24th March, 2020 amended the effective date of
CARO 2020 from 1st April 2019 to 1st April 2020 i.e. With prospective effect

13. Standard Operating Procedures for Registrars
to deal with certain proceedings
13
MCA vide Circular dated 2nd March, 2020 gave clarification on the liability of independent
directors (IDs), non-promoters and non-KMP non-executive directors (NEDs) under Sec 149(12)
of the Act
Sec 149(12) of the Act provides that the liability of independent or non-executive directors who
is not a KMP or promoter, is restricted to acts of omission or commission committed by a
Company which had occurred with the knowledge of such ID or NED and with his or her
consent or connivance or where he/she had not acted diligently
Civil or criminal proceedings shall not be unnecessarily initiated against IDs or NEDs, unless
sufficient evidence exists against them & a standard operating procedure has to be followed
by the Registrar while dealing with any proceedings against such directors
It states that for all ongoing cases or cases where proceedings are to be initiated, the Registrar
should determine the nature of default in a Company and ascertain the officers in default by
examining relevant documents necessary in that regard
Further, the Circular mentions that in case of any doubts with regard to the liability of any
person, for proceedings to be initiated, guidance may be sought from MCA through the office
of the Director General of Corporate Affairs

14. Special measures with the outbreak of
COVID-19
14
Mandatory requirement of holding meetings of the Board within the intervals provided
under Sec 173 of the Act (120 days) stands extended by a period of 60 days till next 2
quarters i.e. till 30th September, 2020
Non-compliance to this requirement during financial year 19-20 not to be viewed as a
violation. But, MCA advises them to share their views through telephone or email or any
other mode of communication
Schedule IV of the Companies Act, 2013 mandates independent directors to hold atleast
one meeting in a financial year without the attendance of non-independent directors and
members of management

15. Contd.
15
Sec149(3) stipulates a minimum residency period in India of 182 days by at least one
director in every Company. Non-compliance with this provision shall not be treated as a
violation for the FY 2019-20
An additional period of 180 days is allowed to the newly incorporated Companies for filing
Declaration for Commencement of Business under Sec 10A of the Act (Form INC-20A)
Companies Fresh Start Scheme, 2020 and LLP Modified Settlement Scheme, 2020 has
been introduced by MCA to provide a one-time relaxation for defaulting Companies/LLPs
to file their belated documents without additional fees
CAR (Company Affirmation of Readiness towards COVID-19):
A simple web form deployed for Companies and LLPs to confirm their readiness to deal
with COVID-19 threat in India

16. Contd.
16
Requirement under Sec 73(2)(c) of the Act to create the deposit repayment reserve of
20% of deposits maturing during the financial year 2020-21 before 30th April 2020
shall be allowed to be complied with till 30th June 2020
Requirement under Rule 18 of the Companies (Share Capital & Debentures) Rules, 2014 to
invest or deposit at least 15% of amount of debentures maturing in specified methods of
investments or deposits before 30th April 2020, may be complied with till 30th June 2020
No additional fees will be charged for Companies and LLPs for late filing from 1st April,
2020 to 30th September, 2020 (moratorium period) in respect of any document,
return, statement, etc. (Including necessary relaxation in filing IEPF forms

17. Contd.
17
MCA vide Circular dated 23rd March, 2020 clarified that amount
spent for various activities related to COVID-19
is eligible for CSR activity under item no. (i) and (xii) of
Schedule VII relating to promotion of healthcare including
preventive healthcare and sanitation and disaster management
Also, any contribution made to the Prime Minister’s Citizen
Assistance and Relief in Emergency Situations Fund (PM CARES
Fund) shall qualify as CSR expenditure under the Act
The Fund has been set up by the GOI to deal with any kind of
emergency or distress situation such as that posed by COVID
19 pandemic

18. Caveats on applicability of CSR expenditure
18
Contribution made to State Disaster Management Authority shall qualify as CSR
expenditure under item no. (xii) of Schedule VII of the Act
Payment of salary/wages to employees and workers, including contract labour, during
the lockdown period shall not qualify as admissible CSR expenditure since it is a moral
obligation of the employers
Payment of wages made to casual / daily wage workers during the lockdown period
shall not count towards CSR expenditure since it is part of the moral / humanitarian /
contractual obligations of the Company and is applicable to all companies
Payment of ex-gratia to temporary / casual /daily wage workers shall qualify as CSR
expenditure if it is specifically for the purpose of fighting COVID 19 and there is an
explicit declaration to that effect by the Board of the Company, which is duly certified
by the statutory auditor

19. Relaxation norms for conducting physical
Board Meetings
19
Rule 4* stipulates certain matters not to be dealt with through audio visual means and
such matters shall only be discussed at the physical meeting of the Board
However, due to outbreak of COVID-19, MCA vide notification dated 19th March 2020
introduced Amendment Rules# which relaxed the above mentioned provision
Amendment Rules provides relaxation to all the Companies to conduct such matters as
mentioned in Rule 4 at the meeting passed by the Board by audio visual means
However, such relaxation shall be available only during the period commencing on 19th
March, 2020 and ending on 30th June, 2020
*Rule refers to Companies (Meetings of Board and its Powers) Rules, 2014
#Amendment Rules refer to Companies (Meetings of Board and its Powers) Amendment Rules, 2020

20. Conducting General Meetings through
audio visual means
20
In view of the outbreak of COVID 19, MCA vide Circulars dated 8th April, 2020 and
13th April, 2020 allowed Companies to conduct EGM through video conferencing or
other audio visual means
It laid down procedures for conduct of such EGM on or before 30th June, 2020
Institute of Company Secretaries of India has also clarified that any relaxation
granted by MCA with respect to conducting Board and General Meetings due to
COVID-19 shall automatically and consequentially apply to Secretarial Standards

21. Extension of timeline for holding AGM by
Companies following calendar year
21
Companies that follow calendar year as financial year are granted 3 months
relaxation from holding their AGMs
Such Companies are required to hold AGMs (other than first AGM) on or before
30th June, 2020 (within 6 months from 31st December 2019)
But, now MCA vide Circular dated 21st April, 2020, has extended the due date
from 30th June to 30th September, 2020

22. Thank You!
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