Tag: Indian Corporate Law

Gist of regulatory changes in Companies Act,2013 in the month of March 2015

31.03.2015

Delegation of powers to RDs u/s 94(5) read with section 458 of CA, 2013 Regional Directors can direct an inspection of registers and returns and authorize extracts required to be taken from the registers and returns of a company. This notification shall come into effect from the date of its publication in the official Gazette.  

31.03.2015 The Companies (Acceptance of Deposits) Amendment Rules, 2015

  1. Share application money received prior to April 1, 2014 will not be considered as deposits if  They have been disclosed as such in the balance sheet for the financial year ending prior to March 31, 2014, and  The company either allot shares or returns the money before June 1, 2015
  2. Companies may accept deposits without deposit insurance contract till 31 March, 2016 or till the availability of a deposit insurance product, whichever is earlier.

30.03.2015

General Circular No.05/2015 Amount received by private companies from their members, directors or their relatives before 1st April, 2014 – Clarification regarding applicability of Companies (Acceptance of Deposits) Rules, 20l4

Clarified that these amounts shall not be treated as deposits subject to the private company disclosing in its notes to financial statement for the financial year commencing on or after April 1, 2014 the figure of such amounts and the accounting head in which such amounts have been shown in the financial statement.

Any renewal or acceptance of fresh deposits from 1st April, 2014 shall be in accordance with the provisions of Companies Act, 2013 and rules made thereunder.

24.03.2015

Appointment of RoCs as adjudicating officers with jurisdiction and their appellate authorities’ u/s 454 of CA 2013. Registrars of Companies appointed as adjudicating officers for penalties under the provisions of the Companies Act 2013 for their respective jurisdictions.

19.03.2015

The Companies (Management and Administration) Amendment Rules, 2015 Provisions for E-voting made applicable only for companies with 1000 or more members Further clarifications provided on E-voting and its implementation. The provisions of this rule are applicable to all General meetings for which notices are issued from the date of commencement of this rule.

18.03.2015

Companies (Share Capital and Debentures) Amendment Rules, 2015

  1. Where there is a contradiction or conflict between regulations framed by SEBI and MCA, SEBI regulations shall prevail for listed companies and MCA regulations will apply for unlisted public companies and private companies.
  2. Where a Company Secretary is appointed, any person authorised by the Board or Secretary can sign the share certificate.
  3. Time limit for issue of duplicate share certificates is extended from 15 days to 45 days.
  4. Employee includes employees of a subsidiary and holding company for the purpose of ESOP and for this purpose the employees of the associate company shall not be considered. 5. Rule 13, a new provision introduced. In case of any preferential allotment made by a company to its existing members, there is no requirement of making open offer in Form PAS 4 and filling thereof with the ROC/SEBI. However, complete record of private placement offers in Form PAS 5 is required to be maintained.
  5. Security for the debenture can be created on any specific movable property or specific immovable property wherever situated or whatever interest. In case of nonbanking financial company, the charge or mortgage may be created on any movable property, it need not be specific.
  6. Issue of debentures by a government company which is fully secured by the guarantee given by the Central Government or one or more State Government or by both, the requirement for creation of charge under this subrule shall not apply.
  7. Where any loan is availed by a subsidiary company from any bank or financial institution, its holding company is allowed to offer its property as security.The time period allotted for creating a trust deed is extended from 60 days to three months from the date of allotment
  8. A new sub clause added to Rule 18 which deals with debentures by which these rules are made not applicable to funds raised by issue of commercial paper or any other similar money market instruments or FCCB or FCB.
  9. Format of Form SH 13 and Form SH14 has been revised – now it includes details of nominee, in case minor nominee dies before attaining age of majority.

18.03.2015

The Companies (Meetings of Board and its Powers) Amendment Rules, 2015 The following decisions which were required to be taken only at a meeting of the Board of Directors are now permitted to be passed as circular resolutions:

  1. to take note of appointment(s)or removal(s)of one level below the Key Management Personnel;
  1. to take note of the disclosure of director’s interest and shareholding;
  1. to buy, sell investments held by the company (other than trade investments), constituting five percent or more of the paid up share capital and free reserves of the investee company;
  1. to invite or accept or renew public deposits and related matters;
  1. to review or change the terms and conditions of public deposit; 6. to approve quarterly, half yearly and annual financial statements or financial results as the case may be.

12.03.2015 Inviting applications for filling up the posts of two Members of the Competition Appellate Tribunal.

10.03.2015 General Circular 4/2015: Clarification with regard to section 185 and 186 of the Companies Act, 2013 – loans and advances to employees

Loans and/or advances made by the companies to their employees, other than the Managing Director or Whole Time Directors are not governed by the requirements of Section 186 of the Companies Act, 2013. However such loans and/or advances to employees need to be in accordance with the remuneration policy and in the offer document/ appointment letter.

03.03.2015

General circular 03/2015: Clarification in relation to filing of Form DIR-11& DIR-12 under the CA 2013 In the absence of authorised signatories, even after resignation as a director, the resigned director is permitted to sign DIR-12 (Particulars of appointment of directors and the key managerial personnel and the changes among them) to facilitate compliance.

Gist of regulatory changes in Companies Act, 2013 in the month of July, 2016

14.07.2016

  1. a) Companies (cost records and audit) Amendment Rules, 2016

Highlights of the Amendment are:

  1. Definition of Regulated Sector for Telecommunication Industry expanded to include activities that requires authorization or license issued by the Department of Telecommunications, Government of India under Indian Telegraph Act,1885.
  2. Consent letter and eligibility certificate to be obtained from the Cost Auditor prior to proposing a Cost Auditor for appointment by the Board.
  3. Provision introduced for

          o Removal of Cost Auditor after giving a reasonable opportunity of being heard.

          o Cost Audit Report should be approved by the Board of Directors.

          o Cost Audit Report (CRA-4) to be filled in XBRL format.

19.07.2016

  1. a) Companies (Share Capital and Debentures) Third Amendment Rules, 2016

 

  1. Companies which have defaulted on payment of dividends, repayment of loans or statutory payments were earlier prevented from issuing equity shares with differential rights. After this amendment these restrictions are withdrawn five years after the Company has made good these defaults.
  2. Preferential offer of partly paid up shares at the time of their allotment permitted.  
  3. Companies without Share Capital need to file Form SH-7 for increase in members now.
  4. Secured debentures can be issued by creating a charge on the properties or assets of company’s subsidiaries or its holding company or its associates companies.
  5. Startups (as defined by the Department of Industrial Policy and Promotion) are given additional flexibility for a period of five years from the date of Incorporation to:
  1. Issue Sweat Equity shares up to 50% of its paid-up capital.
  2. Provide ESOPs to promoters or directors, including directors who either  directly or indirectly, holds more than ten percent of the equity shares.

 

  1. b) In exercise of the powers conferred by sub- section (1) of section 381 of the Companies Act, 2013 (18 of 2013)
  • A foreign Airlines Company is now required to submit the following documents to ROC from the FY 2016-17  
  • Latest consolidated financial statements of the parent foreign company.
  • A statement of receipt and payments for its Indian operations for the financial year, duly authenticated by a practicing Chartered Accountant.  

21.07.2016

National Company Law Tribunal Rules, 2016 and National Company Law Appellate Tribunal Rules, 2016

National Company Law Tribunal Rules, 2016 and National Company Law Appellate Tribunal Rules, 2016 is notified with effect from 21.07.2016.

27.07.2016

  1. a) Companies (Incorporation) Third Amendment Rules, 2016
  • Now a natural person shall not be member of more than 1 OPC and the said person shall not be a nominee of more than 1 OPC.
  • Proof of identity and residence of the subscriber are not required to be filed with the ROC at the time of filing application of incorporation of the company, where the subscriber is already having a valid DIN.  
  • Every Company having a website to disclose/publish its name, address of its registered office, the CIN, Telephone number, fax number if any, email and the name of the person who may be contacted in case of any queries.
  • Rule 37 is inserted for conversion of unlimited Iiability company into a limited Iiability company by shares or guarantee.  
  • Forms INC-27 and INC-11 have been amended and new forms for ‘Advertisement to be published in the newspaper for conversion of Unlimited Liability into Limited Liability Company’ and ‘Certificate of Incorporation pursuant to conversion of Unlimited Liability Company into Limited Liability Company’ have been inserted in the principal rules.  
  • Partnership firm can’t be subscriber to the Memorandum of Association
  1. b) Companies (Accounts) Amendment Rules ,2016

A Company which is a subsidiary of another company need not present its Consolidated Financial Statement (CFS) if:

    • Its parent presents CFS
    • Is not listed in any Stock Exchange or has plans to list in a Stock Exchange.
    • Has given notice of its intent not to publish CFS to its members, both with voting and without voting rights and they have not objected to it.  

The Directors’ Report is now required to include highlights of performance and contribution to the overall performance of subsidiaries, associates and joint venture companies instead of a report on their performance and financial position.  

A Cost Accountant both in practice or in employment can be appointed as an Internal Auditor.  AOC-4 form now contains a provision to file revised Financial statements.

  1. c) Special Court under section 435 of the Companies Act, 2013

MCA has designated the ‘Court of Additional Sessions Judge-03, South-West District, Dwarka’ as the Special Court under Section 435 of the Companies Act, 2013 in respect of jurisdiction of National Capital Territory of Delhi for the purposes of providing speedy trial of offences punishable under the Companies Act, 2013 with imprisonment of two years or more under the Companies Act, 2013.  

29.07.2016

MCA has announced relaxation of additional fee and extension of due date for filing of AOC-4, AOC-4 (XBRL), AOC -4(CFS) and MGT-7 for AGM held on or after 01.04.2016 up to 29.10.2016.

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