Coronavirus Outbreak: No Penalty Or Enforcement Action Against Companies, MCA Says
Government assures of no penal action against the new Covid-19-preparedness form.
The Ministry of Corporate Affairs has clarified that no penalty or enforcement action will be taken against companies in relation to the coronavirus-readiness form. The form, made available from Monday, is applicable to all companies and limited liability partnerships and must be filed before March 31. It seeks a ‘yes’ or ‘no’ response as to whether these entities are in compliance with Covid-19 guidelines.
The form has been deployed as a purely confidence-building measure to assess the readiness of companies to deal with the Covid-19 threat in India. It’s a simple web-based form which doesn’t need digital signature, the MCA said in its notification.
In a separate move, the MCA also disabled access to “public document inspection” system on its portal till March 31. Access documents like annual filings, financials and balance sheets of companies through the public inspection system will be disabled.
Voice and ticketing helpdesk services will be unavailable due to total lockdown on transport and people movement, the ministry has said.
Disabling access to the “view public document” facility may be attributable to the issues with the maintenance activity, which needs support from service providers, Sudip Mahapatra, partner at law firm S&R Associates, told BloombergQuint.
Service providers may not be able to provide the support due to the curbs imposed on movement of personnel and the intention behind the move may be to reduce the load on the system.Sudip Mahapatra, Partner, S&R Associates
The MCA portal acts as a repository of information for all companies, LLPs and partnership firms in India. It acts as a single access window for information relating to a company’s financials, board details, changes to articles and memorandum, among others.
Disabling access would impact banks and creditors, Sandeep Shah, managing partner at NA Shah and Associates, said. Stakeholders cannot check status of charges registered by companies and LLPs. And if the lender wants to currently provide secured lending, it would also like to view the register of charge recorded with the Registrar of Companies, he said.
The functionality of getting certified copies has not been deactivated but whether they will be impacted due to staff shortage can only be determined later.Sandeep Shah, Managing Partner, NA Shah & Associates
According to S&R Associates’ Mahapatra, the MCA’s database is also used for due diligence and tracking corporate information, which can get hampered. But, given the impact of coronavirus on transactional activity, the disabling may not have that much of an impact on M&A, he said.