Introduction

Edition 8/20-21

Week – September 7th to September 11th

Quote for the week:

“Before you become a leader, success is all about growing yourself. After you become a leader, success is about growing others.”

- Jack Welch, CEO of General Electric.

We welcome you to our weekly newsletter for this week!

The ‘Swift e-Bulletin’ - weekly newsletter, covers all regulatory updates and critical judgements passed during the week. We hope that you liked our previous editions and found it to be of great value in its content. We want this newsletter to be valuable for you so, please share your feedback and suggestions to help us improve.

In the wake of COVID-19, we all are witnessing many relaxations, exemptions and amendments to the various legislations by regulatory authorities to ease out the operations during this time of crisis.

Further, various regulatory authorities have been proactive in bringing significant regulatory changes in recent challenging times. This week’s newsletter covers various circulars/notifications issued by certain regulatory authorities such as the Ministry of Corporate Affairs (“MCA”), the Securities and Exchange Board of India (“SEBI”), the Reserve Bank of India (“RBI”), and the Insolvency and Bankruptcy Board of India (“IBBI”) and critical judgements and orders passed by National Company Law Tribunal (“NCLT”), National Company Law Appellate Tribunal (“NCLAT”), SEBI, Supreme Court and High Court. With a constant endeavor to cover all regulatory updates and judgements/orders at one place, we have prepared a comprehensive summary for quick reference of such updates and Judgements orders issued during the week of September 7, 2020 to September 11, 2020.

Thank you,

Swift Team

Table of Contents

REGULATORY UPDATES

MCA UPDATES

1. MCA amends the Companies (Acceptance of Deposits) Rules, 2014 of the Companies Act, 2013 vide Gazette notification dated September 07, 2020

• MCA vide Notification dated September 07, 2020 has amended Companies (Acceptance of Deposits) Rules, 2014 in order to make fund raising by startups easier.
• In the Companies (Acceptance of Deposits) Rules, 2014 (hereinafter referred to as the said rules), among other changes, in rule 2, in sub-rule (1), in sub clause (c), in sub clause (xvii) the following change shall be inserted, namely

“an amount of twenty-five lakh rupees or more received by a start-up company, by way of a convertible note (convertible into equity shares or repayable within a period not exceeding ten years from the date of issue) in a single tranche, from a person.”

• Earlier the specified limit was only 5 years. Hence the notification grants an additional or extra time of 5 years. 
• In the second proviso in sub-rule 3 of rule 3, there has been an amendment in clause (i), which now states that the maximum limit in respect of deposits to be accepted from members shall not apply to a private company which is a start-up for ten years from the date of its incorporation.

To read the entire notification in detail, please click here.

2. MCA relaxes fees and extension of last date of filing of CRA-4 (form for filing of cost audit report) for FY 2019-20 under the Companies Act, 2013 vide general circular dated September 10, 2020

• In view of the prevailing pandemic and considering the representations received from various stakeholders, MCA has stated that if the cost audit report for the financial year 2019-20 by the Cost Auditor to the Board of Directors is submitted by November 30, 2020 then the same would not be viewed as a violation of Rule 6(5) of Companies (Cost Records and Audit) Rules, 2014. Consequently, the cost audit report for the financial year ended on March 31, 2020 shall be filed in Form CRA-4 within 30 days of receipt of the cost audit report by the Company.
• However, in case the Company has availed extension of AGM then e-form CRA-4 maybe filed with the timeline provided under proviso to Rule 6(6) of Companies (Cost Records and Audit) Rules, 2014.

To read the circular in detail, please click here.