Tag Archives: charges

MCA extension

MCA has vide its circular no. 30/2020 dated 28th September, 2020 extended the Companies Fresh Start Scheme 2020 by 3 months upto 31st December, 2020. This scheme allows companies to file select forms without payment of additional filing fee.

We had blogged about the Companies Fresh Start Scheme here https://vramonline.wordpress.com/2020/03/31/companies-fresh-start-scheme-2020/

MCA has vide its circular no. 31/2020 dated 28th September, 2020 extended the LLP Settlement Scheme by 3 months upto 31st December, 2020. Again just like CFSS, this scheme allows LLPs (limited liability partnerships) to file select back dated forms without incurring any additional filing fee.

MCA has vide its circular no. 32/2020 dated 28th September, 2020 allowed the charge creation or modification forms i.e. form CHG-1 to be filed late without any additional filing fee, upto 31st December, 2020.

Lastly vide its circular no. 33/2020 dated 28th September, 2020 MCA has allowed extra-ordinary general meetings (EGM) to be conducted by video conferencing or any other audio visual means upto 31st December, 2020.

All circulars can be found at the MCA site .i.e. http://www.mca.gov.in

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Charge extension

MCA has issued a most complicated circular dated 17th June, 2020 regarding extension of time giving for filing of charge documents. After reading for 5 times, this is the gist of what it means,

  1. basically they have given relaxation between march to september 2020, this period will not be counted for the purpose of reckoning number of days since the charge was created.
  2. This is irrespective of whether the form is filed by 1/3/2020 or not.
  3. Regarding the fees also, the period between 1/3/2020 and 30/9/2020 shall not be reckoned for the purpose of calculating additional filing fee.
  4. This scheme is not applicable to form CHG-4 which is for satisfaction of charges, which is surprising considering that such filings will also get affected due to the office lockdown due to the covid pandemic. MCA should have considered this form also.

MCA should use simple language for its circulars and not issue circulars in piecemeal fashion. This could have been considered when the earlier Fresh start Scheme was issued.

Copy of MCA circular can be found here

file:///C:/Users/Ram/Downloads/Circular23_17062020.pdf

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section 86 of Companies Act, 2013

I am referring to section 86 of the Companies Act, 2013 which has been notified among the 98 notifications on 12th September 2013. The other sections of this Chapter i.e. Chapter VI relating to registration of charges has not been notified. Only section 86 which deals with penalties, fines etc. has been notified. 
 
This section levies a minimum fine of Rs.1 lakh on the companies which can go upto Rs.10 lakhs and every officer who is in default will face a punishment of imprisonment upto a term of 6 months or with a minimum fine of rs.25,000 which can extend to Rs.1 lakh or both. This is regarding Chapter VI which is registration of charges.
 
It is not clear in what circumstances will such hefty fines and penatlies be levied. Will it be for every delay in the filing of the registration of charges and modification or satisfaction of charges. Or will it be only in case of dispute proven in a trial in a Company Court or the National Company Law Tribunal. 
 
If it is more mere delays in registration of charges, then it is very hefty and already there are provisions for getting the delay commuted by making an application to the relevant authorities which is the Regional Director in the present instance. In India there are many co-operative banks which are not very sensitive with regard to the time frame within which the charges or the modifications thereof are required to be filed. Also there are many companies who are not very aware of the provisions relating to the registrations or modifications of charges and therefore I feel this section is very draconian in its intent. 

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