COVID 19: MCA relaxes residency requirement of 182 days

October 2020

Through General Circular  No. 36/2020 dated October 20, 2020, the Ministry of Corporate Affairs (“MCA”) has exempted directors and designated partners from complying with the minimum residency requirement of 182 days for Financial Year (“FY”) 2020-21.

Background: As per section 149(3) of the Companies Act, 2013 (“CA 2013”), every company needs to have at least one director who stays in India for at least 182 days during every FY. A similar requirement is there for designated partners under section 7(1) of Limited Liability Partnership Act, 2008 (“LLP Act”).

Amendments: Due to COVID-19, the MCA had relaxed this minimum residency requirement for FY 2019-20 by a General Circular No. 11/2020 issued on March 24, 2020. Now, keeping in mind the ongoing pandemic and travelling restrictions, the MCA has further extended this relaxation and clarified that if a director/designated partner does not reside in India for at least 182 days in FY 2020-21 there shall be no non-compliance of sections 149(3) and 7(1) of the CA 2013 and LLP Act, respectively.

By:

Jaya Moorjani