CORPORATE LAW UPDATES February 2022

  1. Ministry of Corporate Affairs (MCA)

Additional fees on e-Form will be increased from existing 12 times of normal fees to 18 times of normal fees w.e.f. July 1, 2022

By way of Notification dated January 11, 2022, MCA has notified the Companies (Registration Offices and Fees) Amendment Rules. 2022, which are set to come into effect from July 1, 2022. Once these rules come into effect, the additional fee payable in case of delay in filing of Form INC-22 (Notice of situation or change of situation of registered office) and/or Form PAS-3 (Return of Allotment) will stand increased from existing twelve (12) times of normal fee, to eighteen (18) times of normal fee. The higher additional fee will be charged in cases where the filing of above-said forms has been delayed for more than two (2) occasions within a period of 365 (Three Hundred and Sixty-Five) days.

As per the Notification, the Rules will not apply to forms in respect of Annual Filings to which additional charge of Rs. 100 per day is chargeable without any upper limit.

https://www.mca.gov.in/bin/dms/getdocument?mds=T%252F%252B384mFkSrHFx1liwRTnQ%253D%253D&type=open

Relaxation on levy of additional fees in filing of Annual ROC forms

The MCA has issued General Circular No. 22/2021 dated December 29, 2021, whereby it has been confirmed that with respect to filing of annual financial statement/return for the financial year ended on March 31, 2021, no additional fee will be levied on companies for filing of e-Forms AOC-4, AOC-4(CFS), AOC-4(XBRL), AOC-4 non-XBRL that are filed up to February 15, 2022. Similarly, in case of e-Form MGT-7/MGT-7A, no additional fee will be levied for filings made up to February 28, 2022. Accordingly, no additional fee shall be levied for filing of aforementioned e-Forms up to the extended dates, and only normal fee will be payable.

https://www.mca.gov.in/bin/dms/getdocument?mds=y7MsuJR2BoOvDvpg8FREsg%253D%253D&type=open

Clarification on passing of Ordinary and Special Resolutions by Companies under the Companies Act, 2013 read with rules made thereunder on account of COVID-19

In continuation of previous circulars dealing with the subject matter hereof, vide a General Circular No. 20/2021 dated December 8, 2021, the MCA has clarified that the relaxation accorded to companies to convene an EGM though Video Conferencing and/or other Audio-Visual means, also use of postal ballot to transact business in ordinary course, shall stand extended from December 31, 2021, to June 30, 2022. 

https://www.mca.gov.in/bin/dms/getdocument?mds=FNEhC2FrbKO7ANLDeiQ01A%253D%253D&type=ope

  1. Securities and Exchange Board of India (Foreign Portfolio Investors) (Amendment) Regulations, 2022

Vide Notification dated January 14, 2022, the Securities and Exchange Board of India (SEBI) has notified regulations namely the ‘Securities and Exchange Board of India (Foreign Portfolio Investors) (Amendment) Regulations, 2022.

The aforesaid amendment has been caused to include Section 43B in Chapter VIII-A of the existing regulations, which reads as under:‘43B. (1) The Board may suo motu or on an application made by a foreign portfolio investor, for reasons recorded in writing, grant relaxation from the strict enforcement of any of the provisions of these regulations, subject to such conditions as the Board deems fit to impose in the interests of investors and the securities market and for the development of the securities market, if the Board is satisfied that: (a) the non-compliance is caused due to factors beyond the control of the entity; or (b) the requirement is procedural or technical in nature.(2) The application referred to under sub-regulation (1) shall be accompanied by a non-refundable fee of USD 1,000 (USD One Thousand only) payable by way of NEFT/ RTGS/ IMPS or any other mode allowed by the Reserve Bank of India in the designated bank account of the Board.’

https://www.sebi.gov.in/legal/regulations/jan-2022/securities-and-exchange-board-of-india-foreign-portfolio-investors-amendment-regulations-2022_55352.html

  1. Extension of FCRA registration certificates pending renewal, till March 31, 2022

In continuation to Public Notice No. 11/21022/23(22)/2020-FCRA-III dated September 30, 2021, the Central Government (through Ministry of Home Affairs) has issued a Public Notice dated December 31, 2021, whereby it has been decided to extend validity of FCRA registration certificates up to March 31, 2022, or till the date of disposal of the renewal application, whichever is earlier.

It has been clarified that the extension of validity of FCRA registration certificate will be applicable only to cases where the FCRA registration certificates have expired/are expiring between September 29, 2020 and March 31, 2022. To be eligible for deemed extension of FCRA registration till March 31, 2022 as aforesaid, the pivotal requirement is that an application for renewal of FCRA registration (in accordance with Rule 12 of the Foreign Contribution (Regulation) Rules, 2011) should be pending consideration. 

Further, in cases where the application for renewal of FCRA registration has been refused, the validity of registration certificate will be deemed to have expired on the date of refusal of the renewal application. Consequently, such entities will not be eligible to receive foreign contribution and/or utilize the foreign contribution received.

https://fcraonline.nic.in/home/PDF_Doc/fc_notice_31122021.pdf