MCA relief to companies on delivery of the notice to shareholders

To whom and why is this relief given?

The relief is given to the listed companies because due to this Lockdown, the companies were unable to post or deliver the notice to the shareholders, which is an offense but for this reason, it is not counted as an offense.

Given the situation as a result of the nationwide lockdown inspired by Covid-19, the Ministry of Corporate Affairs (MCA) has now allowed such companies to take out remittance notices to shareholders by speed post, any registered post or courier.

What will be not seen as a violation of section 62(2) of companies act 2013?

Not sending a notice through postal or courier services due to COVID-19 threat will not be seen as a violation of Section 62 (2) of the Companies Act 2013, MCA stated in a circular. 

Which clarification can be provided by MCA further?

MCA clarifies that the companies who are listed under the companies act,2013, do not need to dispatch the notice of rights issues to the shareholder opening till 31, July 2020 it is also clarified about the mode of issue of notice for the listed companies.

To which the MCA stated that because of the difficulties faced by the companies to send the notices to shareholders due to COVID-19's the companies can send notice to the shareholders through post or courier.

The explanation for companies by MCA 

Looking at the overall situation and account, it is clarified that listed companies cannot send notice to open rights by 31 July 2020, which complies with shareholders through SEBI Circular 6 May 2020 or Speed ​​Post or Shall not be viewed as a violation of Section 62 (2) of the Courier Act.

As per the rules, the notice will be offered to specify the number of offers and the time limit shall be offered not less than 15 days and not more than 30 days from the date of the offer, within which the offer is not accepted. It is believed to have declined.

It must be sent through registered post or speed post or electronic mode or courier or any other mode at least three days before issuing proof of delivery to all existing shareholders.

For whom this relief has been given by MCA?

This relief is given to those companies who are registered in MCA by taking company registration, hence, companies who are registered under MCA are eligible for this relief.

What are the modes of dispatch of notice that can be followed by the company? 

Now, it is clear that issuers can electronically submit applications, brief letters of offer, and other issues to shareholders. Failure to follow the methods of dispatch through registered post, courier services, or speed post will not be considered non-compliant due to conditions related to Covid-19 prevailing during the period up to 31 July. This is a relief for companies given by MCA. 

However, issuers must publish a letter, proposal, and application form to issue rights to the company's website, registrars, stock exchanges, and lead managers.