LegaLogic – Corporate Laws Newsletter: Relaxation in payment of additional fees in filing e-forms for financial year ended as on March 31, 2021 – Nov 2021
In terms of the Companies Act, 2013 companies are required to file audited annual financial statements within 30 days from the date of annual general meeting through e-forms with the Ministry of Corporate Affairs (MCA). Similarly, limited liability partnerships are required to file statement of accounts and solvency within 30 days from the end of 6 months from the end of financial year with the MCA, as per the provisions of the Limited Liability Partnership Act, 2008. Keeping in view the difficulties faced by various companies due to the Covid-19 pandemic resulting in periodical disruption of business, the MCA in its order dated September 23, 2021, had directed all the registrar of companies to extend the time to hold annual general meeting (other than first annual general meeting for financial year ended March 31, 2021) for companies within the jurisdiction of its office, which are unable to hold annual general meeting within the due date by a period of 2 (two) months without requiring the companies to file applications seeking for such extension. In connection with the said order, MCA has provided further relaxations1 by stating that no additional fees will be levied up to December 31, 2021 for filing any e-forms AOC-4, AOC-4 (CFS), AOC-4 XBRL, AOC-4 Non-XBRL and MGT-7/ MGT-7A in respect of financial year ended March 31, 2021 and no additional fees will be levied up to December 30, 2021 for filing Form 8 in respect of financial year ended March 31, 2021. Similarly, the last date for filing of cost audit report under Rule 6(5) of the Companies (Cost Records and Audit) Rules, 2014 has been extended2 to November 30, 2021. This relaxation granted by MCA will provide more time for companies and LLPs to ensure compliance without any requirement to pay additional fees for filing of these e-forms.
Transmission of securities to joint holders
Transmission of securities is inter alia required to be undertaken in the event of death of shareholders. Provisions relating to transmission of securities is encapsulated in Section 56 of the Companies Act, 2013. However, in case of listed companies, there are many instances wherein the registrar and transfer agents (RTA) do not undertake the transmission in favour of the surviving joint holder as a result of counterclaims or disputes raised by the legal heirs of the deceased shareholders. The Securities Exchange Board of India has issued a clarification3 stating that the RTAs must comply with the provisions of the CA 2013 for the purpose of transmission of securities to the surviving joint holder, in the event of demise of one or more joint holder(s), provided that there is nothing contrary to the said provisions in the articles of association of the company.
Amendments under the Foreign Exchange Management (Non-Debt Instrument) Rules, 2019
Amendments were introduced in the Foreign Direct Investment Policy (FDI Policy) vide Press Note 34 wherein foreign direct investment up to 100% under automatic route will be permitted in public sector undertakings forming part of the oil and natural gas sector and up to 49% under automatic route in public sector undertakings forming part of the petroleum refineries sector, without any disinvestment or dilution of domestic equity in existing public sector undertakings. Further, the Press Note states that in relation to foreign direct investment up to 100% would be permissible in public sector undertakings in the petroleum refineries sector which have received an in-principle approval for strategic divestment from the Government of India.
The Foreign Exchange Management (Non-Debt Instrument) Rules, 2019 (NDI Rules) have been amended5 to include the condition stating requirement of in-principle approval for strategic divestment from the Government of India for the purpose of 100% foreign direct investment in the public sector undertakings under petroleum refineries sector.
The amendment has brought in clarity and uniformity in the provisions of the FDI Policy and the NDI Rules.