The companies made representations to the MCA that prevailing disruption in logistics due to covid-19, has brought the audit and compliance work under lot of strain particularly for mid-size companies
The ministry of corporate affairs (MCA) on Tuesday clarified that companies would need to seek specific approvals to defer their annual general meeting till 31 December.
As per rules companies need to hold AGMs within six months of the fiscal ending. But because of the covid pandemic, companies had sought an extension till the end of the year.
The MCA said in a circular that companies have already been granted relaxations by way of allowing them to hold AGMs through video conferencing to help them overcome the challenges of social distancing and travelling.
However, companies made representations to the MCA that disruptions in logistics caused by the pandemic have brought audit and compliance work under a lot of strain, particularly for mid-size companies.
“It is once again reiterated that companies unable to hold their AGMs for the year ended 31 March 2020 despite availing the relaxations ought to file their applications for seeking extension of time in holding of AGMs for the financial year 2020 with the concerned registrar of companies (RoC) on or before 29.09.2020," said the circular.
MCA also advised RoC to view all these applications ‘liberally’ and to grant extensions for a maximum of three months.
To avoid last-minute difficulties companies have been advised not to wait for the last date of 29 September to file their request as a denial of approval could result in a long- drawn process of compounding penalty and non-compliance consequences for the companies.
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