1. Introduction of Form CSR-2 (Report on Corporate Social Responsibility)

The MCA has notified the Companies (Accounts) Amendment Rules, 2022, in force and effective February 11, 2022 (i.e., date of publication of applicable notification bearing G.S.R. 107(E) in the Official Gazette). The Rules have been rolled out in an attempt to further strengthen the compliance norms for Corporate Social Responsibility (“CSR”) reporting and promote transparency.

In terms of the above-said, every Company covered under the provisions of Section 135(1) of the Companies Act, 2013 will be henceforth required to prepare and file with the Registrar of Companies, a compliance report on its CSR obligations. A Company to whom such obligation will apply, shall be required to file such report (at the end of each financial year) as per the format prescribed in Form CSR-2. 

The compliance requirement for eligible companies is live, for financial year 2020-21 and as per directions laid down in the said Rules, the report shall be filed as an addendum to Form AOC-4, AOC-4 XBRL or AOC-4 NBFC (Ind AS).

For financial year 2020-21, the cut-off date for the first filing of Form CSR-2 has been determined as of March 31, 2022. 

Prior to this Notification, reporting of CSR by a company was mandated under the Directors’ Report. However, introduction of Form CSR-2 and related compliance obligations, may aid to ensure stricter compliance and reporting applicable to a company under prevalent CSR regime (including CSR Rules).

  1. Amendment to Limited Liability Partnership Act, 2008

The MCA, vide notification dated February 11, 2022, has stated that certain provisions of Section 90, 164, 165, 167, 206(5), 207(3), 252 and 439 of the Companies Act, 2013 shall be applicable to the Limited Liability Partnerships (LLPs) incorporated under the Limited Liability Partnership Act, 2008. 

By virtue of the said notification, no person:

  1. Can be appointed as a designated partner for a period of five (5) years in case of non-filing of the financial statements and annual return for a continuous period of three (3) years or failed to repay the deposit or interest thereon or to redeem the debentures on the due date or pay interest due thereon or pay any dividend declared for one (1) year or more.
  2. Shall be appointed in more than twenty (20) LLPs. He has to leave/ resign one of his existing offices as designated partner within one year of the said notification in case a person is holding a position as designated partner in more than twenty (20) LLPs.

  1. Limited Liability Partnership (Amendment) Rules, 2022

The MCA, vide notification dated February 11, 2022, has notified the LLP Amendment Rules, 2022. 

Some of the key amendments introduced are as under:

  1. The existing Rule 19(1) has been substituted by virtue of the said notification in case the name of an existing LLP or a newly incorporated LLP resembles with the existing LLP, or a Company or a proprietor of a registered trademark under the Trademarks Act, 1999 (47 of 1999), then such entity may apply to the Regional Director in Form 23 to give a direction to that LLP to change its name or new name. 
  2. Rule 19A has been inserted by virtue of the said amendment rules, which deals with the allotment of the new name to an existing LLP. As per the said rule, in case a LLP fails to change its name or new name, as the case may be, in accordance with the direction issued under Section 17(1) within a period of three months from the date of issue of such direction, the letters “Order of Regional Director Not Complied” (ORDNC), the year of the passing of the direction, the serial number and the existing LLPIN of the LLP shall become the new name of the LLP without any further act or deed by the LLP.
  3. Rule 37A to 37D has been inserted which provides for the adjudication of penalties by the Adjudicating Officer, filing of appeal against order passed by the Adjudicating Officer, Registration of appeal and disposal of appeal by Regional Director respectively.
  4. Substitution of the existing fee schedule with respect to the fee to be paid by the LLP for registration, conversion/ filing of certain documents with the Registrar of Companies.

The said amendment act shall come into effect from April 1, 2022.

  1. Relaxation on levy of additional fees in filing of Annual Forms with the Registrar of Companies

The MCA has issued a circular dated February 14, 2022, whereby it has further extended the date of filing of annual financial statement/ return for the financial year ended on March 31, 2021 and stated that no additional fee shall 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 March 15, 2022. 

Similarly, in case of e-Form MGT-7/ MGT-7A, no additional fee shall be levied for filings made up to March 31, 2022. Accordingly, the said forms shall be filed with nominal fee till the extended dates.