Extension Of AGM Due Date For Financial Year 2019-20

admin — Mon, 11 Sep 2017 07:52:38 +0000

MCA vide orders issued by respective ROCs dated 08.09.2020 has extended the due date for holding AGM for all companies by 3 months to 31.12.2020. This has been done by passing orders by respective ROCs under the third proviso to Section 96(1) of the Companies Act 2013. Orders issued by ROC’s have stated that companies are not required to file an application in GLN-1 for getting this extension and also that extension is also applicable for companies whose application for an extension in GLN-1 is pending for approval.

Under the provisions of section 96(1) of Companies Act 2013, All Companies ( other than one person companies ) are required to hold AGM within 6 months from the end of the financial year.

In the case of the First Financial year for newly incorporated companies, the time period is 9 months from the end of the first financial year. Hence the Due date for FY 2019-20 for companies other than newly incorporated companies was 30.09.2020.

Many Problems Faced During Pandemic Time

Due to the Pandemic many companies were not able to complete the audit and get the audit reports completed before September first week to issue 21 days’ notice to the AGM. The stakeholders had made multiple requests to the government for grant extension without having to apply for an extension by companies.

This order granting extension has come as a huge relief to companies and the Auditors in complying with the legal requirements under the Companies Act.

Loan To Directors Under Section 185

admin — Mon, 22 May 2017 08:08:11 +0000

Section 185 of the Companies Act, 2013 imposed a ban on loans to directors, their relatives and partners. The main intention of Section 185 is to ensure that directors who hold a fiduciary position with respect to shareholders do not misappropriate the funds of the company for their own benefits.

Public companies were allowed to grant loans, guarantees and securities subject to Central Government approval and private companies were exempted under Section 295 of the former Companies Act, 1956.

Private Companies were facing problems due to stringent provisions of Section 185 while carrying out operations. So, Government exempted private companies from entire Section 185 to ease the compliance requirement vide notification dated 5th June, 2015.

Companies (Amendment) Act, 2017

Government substituted entire Section 185 by way of Companies (Amendment) Act, 2017 to promote ease of doing business. The original Section 185 specified more exhaustive list to which Companies can’t give loans, guarantee and securities. Thus, at par with the global company laws, the provision has been amended to remove the prohibition to an extent and provides for the passing of shareholders’ resolution for granting of loans, guarantees, and securities to entities in which directors are interested.

There should be no investment in the concerned company from any other body corporate;
The company should not have any borrowings from banks, financial institutions and other bodies corporate equal to or more than twice its paid-up share capital, OR Rs. 50 crores, whichever is lower; and
There should be no subsisting default at the time of making such transaction, and that the company should have the capability to pay off the loan.

Advisor – BRISUN Law Firm

Extension Of AGM Due Date For Financial Year 2019-20

Many Problems Faced During Pandemic Time

Loan To Directors Under Section 185

Companies (Amendment) Act, 2017