Companies, Take Note Of The Six Deadlines Expiring On Dec. 31
Independent directors of company boards have significant responsibilities under the Companies Act and are part of various committees, including those related to remuneration. (Photographer: Giulia Marchi/Bloomberg)

Companies, Take Note Of The Six Deadlines Expiring On Dec. 31

A slew of corporate law relaxations granted by India amid the Covid-19 pandemic are set to expire on Thursday. This includes compliance deadlines and settlement schemes for India Inc. under the Companies Act and the Limited Liability Partnership Act.

While the government has extended tax filing deadlines, no further relaxation has been granted under the corporate laws.

Here are the key deadlines companies must be aware of...

Extraordinary General Meetings

Citing the pandemic, the Ministry of Corporate Affairs allowed companies to hold extraordinary general meetings through electronic or other audio visual platforms in April this year. The relaxation, allowed till June 30, was extended till Sept. 30 and then by further three months till the end of this year.

This relaxation will cease on Thursday.

KYC Of Directors

The company law requires every director in an Indian company to undergo an annual identity verification process through a dedicated web-based method. Certain relaxations exist for directors who fulfil the prescribed criteria.

A delay in completing this attracts late filing fees. But as the government included DIR-3 KYC process under the Company Law Settlement Scheme, directors were provided a window till Dec. 31 for completion of this process.

Company Fresh Start Scheme

To provide a fresh start for non-compliant companies, the Corporate Affairs Ministry introduced the Companies Fresh Start Scheme in March 2020. Through this, the government condoned the delay in compliances by entities that were historically non-compliant or had missed key filings. As many as 65 statutory forms were covered under this scheme.

The government extended the deadline under this scheme from Sept. 30 to the end of this year to allow more companies to avail benefits and become compliant.

LLP Settlement Scheme

LLPs are governed under the Limited Liability Partnership Act in India. This law requires such entities to make various annual filings, including annual reports and financials, a delay in which attracts late filing fees, among other consequences.

The government had provided a one-time late fee waiver by introducing the LLP Settlement Scheme earlier this year. Further extensions were granted till Thursday to allow more firms to take benefit of this scheme. LLPs can avail benefits of this scheme till Dec. 31.

Board Meetings For Approving Financials

Boards of directors of companies couldn’t hold physical meetings to approve annual financial statements or board reports, as required under the company law, owing to lockdowns imposed by the government following the Covid-19 pandemic.

To address this, the government gave an in-principle nod in March for allowing approval of a company’s financial statements in board meetings held via videoconferencing or other audio-visual means. The facility, which was initially available till June 30, was eventually extended till the end of this year in response to the demand from India Inc.

The ministry has now allowed companies to hold such meetings till June 30 next year. Companies must comply with prescribed conditions to avail this facility.

Other Deadlines

Relaxations relating to filing of charges and enrolment by individuals into the independent directors database also ends on Thursday.

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