Companies Act mandates that businesses have to report creation of a charge on their assets within 30 days or with additional fees, within 300 days
NEW DELHI : The ministry of corporate affairs on Wednesday rolled out a scheme to give companies more time to report creation of any lien on their assets under the Companies Act.
The scheme which condones companies’ delay in reporting creation of charges on their physical or intangible assets in India or abroad is in response to requests from the industry for additional time for compliance.
Companies Act mandates that businesses have to report creation of a charge on their assets within 30 days or with additional fees, within 300 days. If they default on this, the investor that creates a lien on the assets of the company in its favour, can report it after giving a two-week notice to the company and recover the costs of reporting.
The ‘Scheme for relaxation of time for filing forms related to creation or modification of charges under the Companies Act, 2013’ rolled out on Wednesday says that a period of seven months starting 1 March 2020 will not be counted for calculating the timelines under the law for reporting fresh liabilities.
Accordingly, companies which had not defaulted as on 1 March will get seven months till end of September in addition to whatever time they otherwise had as per provisions of law for compliance. Companies which created a charge on their assets on or after 1 March too, will, in addition to the remaining time period till end of September 30, have the number of days prescribed under the law for compliance.
The relief is part of a series of relaxations that the corporate affairs ministry granted to businesses during the pandemic for various statutory filings. It had also allowed businesses to hold statutory meetings by electronic means such as videoconference.
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