The COVID-19 pandemic has affected businesses' ability to comply with various statutory rules and regulations due to lockdowns and other social distancing measures. The government – particularly the Ministry of Corporate Affairs (MCA) – has proactively introduced various measures to support companies in their ability to comply with the Companies Act 2013. Most notably, the MCA has relaxed the restrictions around which corporate actions can occur at virtual board meetings until 30 September 2020.
When setting up a business in India, attention must be paid to the laws which govern companies. Of particular note is the Companies Act, which encompasses a wide range of provisions relating to governance, including with regard to incorporation, capital infusion, management and administration, audits and accountability.
When setting up a business, it is crucial to determine the appropriate legal entity in view of the business's exact needs. The entity should be relevant from a fundraising and taxation perspective and with respect to the foreign direct investment norms in light of the nature of the business and the activities that it proposes to conduct. For instance, certain relaxations are offered to limited liability partnerships which are not offered to companies and vice versa.