Specification of Definitions Details


The Companies (Specification of definitions details) Rule, 2014 defines some additional terms which have not be defined in the Act. These rules clarify two terms already defined in the Act but need executive clarification as the Act.

The terms defined here are:

2(a) “Act”: this simply means the Companies Act, 2013.

2(b) “Certifying Authority” is a person who granted a license to issue a Digital Signature Certificate under the Information Technology Act, 2000 and a Certified Filing Center under the Companies Act, 2013.

2 (c) “Digital Signature” is a Digital Signature as defined under Section 2(1)(p) of the Information Technology Act, 2000.

2(d) “Digital Signature Certificate” is a Digital Signature Certificate as defined under Section 2(1)(p) of the Information Technology Act, 2000.

2(e) “Director Identification Number” means an identification number allotted by the Central Government to any individual, intending to be appointed as director or to any existing director of a company, for the purpose of his identification as a director of a company. Director Identification Number (DIN) obtained by the individuals prior to the notification of these rules shall be the DIN for the purpose of the Companies Act, 2013. “Director Identification Number” (DIN) includes the Designated Partnership Identification Number (DPIN) issued under section 7 of the Limited Liability Partnership Act, 2008 (6 of 2009) and the rules made thereunder.

2(f) “E- form” a form in the electronic form as prescribed.

2(g) “Electronic mail” means the message sent, received or forwarded in digital form using any electronic communication mechanism that the message so sent, received or forwarded is storable and retrievable.

2(h) “Electronic Mode” means carrying out electronically based, whether main server is installed in India or not, including, but not limited to- 

(i)           business to business and business to consumer transactions, data interchange and other digital supply transactions;

(ii)          offering to accept deposits or inviting deposits or accepting deposits or subscriptions in securities, in India or from citizens of India;

(iii)         financial settlements, web based marketing, advisory and transactional services, database services and products, supply chain management;

(iv)         online services such as telemarketing, telecommuting, telemedicine, education and information research; and

(v)          all related data communication services,

whether conducted by e-mail, mobile devices, social media, cloud computing, document management, voice or data transmission or otherwise.

As mentioned in the definition, this definition has significant effect to the definition of “Foreign Company” as defined under Clause (42) of Section 2 of the Act. This definition gives clarity to about a company or body corporate incorporate outside India which has a place of business India through electronic mode.

2(i) “Electronic Record” means the electronic record as defined under Section 2(1)(t) of the Information Technology Act, 2000.

2(j) “Electronic Registry” means an electronic repository or storage system of the Central Government in which the information or documents are received, stored, protected and preserved in electronic form.

2(k) “Executive Director” means a whole time director as defined in clause (94) of section 2 of the Act.

2(l) “Fee” means the fees as specified in the Companies (Registration Offices and Fees) Rules, 2014.

2(m) “Forms” means a form set forth in the Act or the rules made thereunder which shall be used for the matter to which it relates.

2(n) “Pre – fill” means the automated process of data input by the computer system from the database maintained in electronic registry of the Central Government.

2(o) “Registrar’s Front Office” means an office maintained by the Central Government or an agency authorised by it to facilitate e-filing of documents into the electronic registry and their inspection and viewing.

2(p) “Regional Director” means the person appointed by the Central Government in the Ministry of Corporate Affairs as a Regional Director.

2(q) “Section” means the section of the Act.

2(r) “Total Share Capital” means the aggregate of the – (a) paid-up equity share capital; and (b) convertible preference share capital.

This definition is important for the purpose of Definition of associate company in Clause (6) and definition of subsidiary company or subsidiary in clause (87) of Section 2 of the Act.

2(s) “or otherwise” means for the purposes of clause (d) of sub-section (1) of Section 164 and clause (f) of sub-section (1) of section 167 of the Act, any offence in respect of which he has been convicted by a Court under this Act or the Companies Act, 1956.

These provisions related to disqualification of director and vacation of director. This definition gives continuity to a disqualification of a director incurred under the provisions of the Companies Act, 2013.

 

The words and expressions used in these rules but not defined and defined in the Act or in (i) the Securities Contracts (Regulation) Act, 1956 (42 of 1956) or (ii) the Securities and Exchange Board of India Act, 1992 (15 of 1992) or (iii) the Depositories Act, 1996 (22 of 1996) or (iv) the Information Technology Act, 2000 (21 of 2000) or rules and regulations made thereunder shall have the meanings respectively assigned to them under the Act or those Acts.

 

Related Party: For the purposes of sub-clause (ix) of clause (76) of section 2 of the Act, a director or key managerial personnel of the holding company or his relative with reference to a company, shall be deemed to be a related party. [Rule 3]

UPDATE: The Companies (Specification of Definitions Details) Amendment Rules 2014 with effect from 17th July 2014 clarifies “A director other than independent Director” shall be deemed to be related party under this Rule 3.

List of Relative: A person shall be deemed to be the relative of another, if he or she is related to another in the following manner, namely:-

(1) Father; Provided that the term “Father” includes step-father.

(2) Mother; Provided that the term “Mother” includes the step-mother.

(3) Son; Provided that the term “Son” includes the step-son.

(4) Son’s wife.

(5) Daughter.

(6) Daughter’s husband.

(7) Brother: Provided that the term “Brother” includes the step-brother;

(8) Sister: Provided that the term “Sister” includes the step-sister.

List does not include Step – daughter. Is it a comment on Indian family values or on corporate culture? Daughter’ husband is also not a relative.

 

Please note: I welcome your comments and feedback. This blog post is not a professional advice. Readers may share this post on social media by using buttons given here.

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One response to “Specification of Definitions Details

  1. Pingback: Index of Companies Law Posts | AishMGhrana

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