COVID-19 Impact: ICSI urges Govt. to relax Compliance Procedures for Companies

ICSI - prefixing CS - Disciplinary action -Taxscan

The Institute of Company Secretaries of India (ICSI), on Thursday issued a letter to the Ministry of Corporate Affairs (MCA) requesting the government for relaxation in compliance under the provisions of Companies Act, 2013 due to COVID-19.

Due to COVID-19, there is a total lockdown imposed on transport and movement of people by the Government. In this regard, ICSI requested the government to consider granting further relaxations from some of the compliances under the Companies Act, 2013, and suggested various relaxation.

Firstly, ICSI suggested that the MCA be requested to exempt the companies from the requirement of the dispatch of the annual report in physical form as envisaged under Section 136 of the Companies Act, 2013.

Secondly, the companies may be permitted to consider the restricted matters required to be conducted at meetings of the board through circular resolution.

Thirdly, in view of the current circumstances, the company may not be able to open a separate bank account and dispatch the physical dividends, warrants to the shareholders, who have not mandated electronic payment facilities. Also, the banks are not fully functional and are providing only limited services to the stakeholders.

Further, the post offices and courier services in almost all over India are closed and may provide services after the lockdown is over in limited areas only. In view of the same, the time limit may be relaxed subjected to earmarking of the funds of dividends.

Fourthly, the deduction under Section 80G of the Income Tax Act, 1961 can be claimed for the Financial Year 2019-20, in respect of the donations made till June 30, 2020.

Fifty, the MCA through its circular extended the timeline for filing various IEPF e-forms without any additional fee. However, the timeline as prescribed in Section 124(5) for transfer of unpaid dividend and in Section 124(6) for transfer of shares had not been extended, unless both these timelines are extended it may prejudice the interest of investors as if corporates chose to deposit the money or transfer of shares, the last opportunity available to the investor for prevention of the same may not be available in the view of lockdown. So the timeline must be relaxed.

Lastly,  the MCA was urged to consider the granting of moratorium or extension of the last date to all such e-forms.

To Read the full text of the Representation CLICK HERE