CAR 2020 (Company Affirmation of Readiness Towards COVID-19)

CAR 2020 (Company Affirmation of Readiness towards COVID-19) is an instant web form for declaration, to be complied by all companies and Limited Liability Partnerships (LLP) on an immediate basis on Monday (23 March 2020).

Latest update as on 16th April 2020

“Company Affirmation of Readiness towards COVID-19” has been discontinued w.e.f 14th April 2020.

What is Form CAR 2020?

India is going through a rough phase of a global health scare -Coronavirus disease (COVID-19) pandemic. The Indian government is taking up all possible measures to keep a check on the spread of this disease within the Indian community. These include social distancing, isolation of those people suspected to be carriers of this contagious virus -whether or not with travel history, and a definite period of Janata curfew or lockdowns in several districts.

Accordingly, it is necessary for private establishments across the nation to also take part in the mission of social distancing by closing their business establishments and factories until 31st March 2020. In order to bring transparency in the enforcement of work from home (WFH) policies of the companies, the central government has to step in. The government preferably wants the companies and LLPs to enforce work from home policy until the 31st of March 2020. The WFH policy should cover both the headquarters and the field offices or branches of these companies/LLPs.

Hence, the Ministry of Corporate Affairs (MCA) has introduced CAR, a short and simple compliance form for all the companies registered with RoC. The term CAR 2020 can be expanded as the Company Affirmation of Readiness towards COVID-19.

The authorised signatory of the companies and LLPs should file Form CAR 2020 on the 23rd of March 2020. The form has been deployed at the website of MCA on the same day. The service will be available after logging into the MCA website for both ‘Registered’ and ‘Business User’.

Features of the Form CAR 2020 include the following:

• The form consists of minimal fields and can be filed from anywhere.
• The user need not pay any fees for the submission of the Form CAR 2020.
• No Service Request Number (SRN) will be generated.
• The authorisation can be completed with a One-time Password (OTP).

Among other measures taken by the MCA, the Board Meetings of the companies will be conducted through video conferencing until 30th June 2020, thus exempting them from the requirement of physical meetings. The matters include approval of financial statements, Board report, restructuring, etc.

Who Must Comply With Form CAR 2020?

All the public and private companies and LLPs must submit the Form CAR 2020. The list includes foreign companies registered under the Companies Act, 2013 as well as foreign LLPs registered under the Limited Liability Partnership Act, 2008.

One of the authorised signatories of the company or the LLP is required to submit or file the Form CAR 2020 using an OTP. There is no requirement of using a digital signature.

A system-based acknowledgement will be sent to the following:

• Email ID of the respective Company/Foreign Company/ LLP or Foreign LLP.
• Email ID of the Authorised Signatory providing the declaration.
• Email ID of the FO user who is submitting the declaration.

What is the Time Limit to Submit Form CAR 2020?

The form is deployed on the MCA website on the 23rd of March 2020. The MCA has advised that the companies and LLPs make use of this service in a staggered manner with effect from the 23rd of March 2020. The advisory is issued to avoid any load on the systems. More details to define the staggered manner of submission are needed from the Ministry.

Later on 23rd March 2020, MCA website made an announcement to clarify that the stakeholders may file the form at their convenience. It is voluntary in nature and initiated towards to fight against the spread of the disease.

What are the Contents of Form CAR 2020?

The contents of the Form CAR 2020 is listed down as follows:

• Company Identification Number (CIN) or FCRN or Limited Liability Partnership Identification Number (LLPIN) or Foreign Limited Liability Partnership Identification Number (FLLPIN).
• Name of the company/foreign company/LLP/foreign LLP.
• To select ‘Yes/No’ for the question ‘Whether the company/LLP is complying with the COVID-19 guidelines including work from home policy?’.
• Pre-fill the PAN/DIN/membership number of the authorised signatory.
• Mobile number of the authorised signatory.
• OTP sent on the mobile number entered in the earlier step.

How Does Form CAR 2020 Look?

The format of Form CAR 2020 is as follows:

What are the Steps You Need to Follow to Submit Form CAR 2020?

Step 1: Log in to the MCA website. Navigate from the home page to the tab ‘MCA services’ and select ‘COVID-19’ under the ‘Company Services’.

Step 2: Enter the valid CIN/ FCRN/ LLPIN/ FLLPIN and click on Pre-fill. The system will pre-fill the name of the company/LLP.

Step 3: Select ‘Yes/No’ to answer whether the company/LLP is in compliance with the COVID-19 guidelines, including the work from home policy.

Step 4: Select either the ‘DIN/ PAN or membership number’ depending upon its validity and who the Authorised Signatory of the Company/LLP is. Enter the DIN/PAN/membership number as the case may be and click on ‘Pre-fill’.

Note: 
– The authorised signatory submitting the declaration must be currently associated with the company/LLP. 
– Depending upon the selection, a valid DIN must be entered in case of the Director. A valid PAN should be entered in case of other Key Managerial Personnel, whereas a valid Membership Number should be entered in case of full-time Company Secretary of the company.

Step 5: The mobile number from the MCA database will be pre-filled.

Note: The field is available for edit in case the pre-fill fails. Accordingly, the user can enter the mobile number.

Step 6: Press the ‘Send OTP’ button. OTP will be sent to the mobile number entered in Step 4.

Step 7: Enter the OTP received and press the ‘Verify OTP’ button.

Once the OTP is verified, a message is displayed to suggest a successful verification of the OTP.

Step 8: Press the ‘Submit’ button to finish submitting the form.

What are the Consequences of Non-Submission of the Form CAR 2020?

Hon’ble Union Finance Minister Nirmala Sitharaman has only urged and appealed to the companies and LLPs to join hands for the containment of the deadly COVID-19 through social distancing. So far, the Companies Act, 2013 has not laid down any penalty for the non-submission of the form, given the emergency situation that prevails.

Also, the MCA has announced that no penalty or enforcement-related action is applicable.

Also, there is no record so far to suggest that the central government will be taking any measures against those who submit ‘No’ in answer to ‘whether the company/LLP is in compliance with the COVID-19 guidelines, including the work from home policy’.

What are the common errors while submitting the Form CAR 2020?

Busy Alert

Since the portal may experience heavy load, it would display a ‘Busy’ alert when the peak traffic has been reached.

Blank page after submission

A user may see a blank window that appears after submitting the form. This may happen due to the increased load on the server. However, an acknowledgement would have been sent to the registered email ID. The user can clear the cache of the browser being used to rectify this error.