Unless a general election is crucial there is no purpose to conduct such a huge exercise. The best part of democracy is to give the opportunity for new ideas. Without going to any political prediction we will discuss possible post-election scenario after 23rd May 2019. This may help us to be prepared for the volatility of corporate law in India.
In post “Technical Fault in issuance of Secretarial Standards” posted long ago, I humbly made certain observations on notifications of two Secretarial Standards which was approved by Central Government and specified by the Institute of Company Secretaries of India (ICSI). A surprise notification of withdrawal published on 17th august 2017 come in support of my prima facie views. This withdrawal is effective with effect from 30th September 2017. Here, a discussion.
Finally government tries to come out of Sahara Blues. Government earlier was in pressure to put corporate governance in place among private companies and tried well. Thereafter, industry lobby (read as vested interests among “promoters” and “professionals”) started pleaded mercy for all “otherwise honest players”.
Government initiated it journey with exemption notifications and now bring this amendment rules.
The Companies (Audit and Auditors) Second Amendment Rules, 2017 is interesting in more than one way. Statistically, this exemption will benefit only selected big players among private companies in India and their auditors.
Section 139(2) of the Companies Act, 2013 reads, “No listed company or a company belonging to such class or classes of companies as may be prescribed, shall appoint or re-appoint—
(a) an individual as auditor for more than one term of five consecutive years; and
(b) an audit firm as auditor for more than two terms of five consecutive years.”
Rule 5 of the Companies (Audit and Auditors) Rules 2014 before present amendments reads, “for the purposes of sub-section (2) of section 139, the class of companies shall mean the following classes of companies excluding one person companies and small companies:-
(a) all unlisted public companies having paid up share capital of rupees ten crore or more;
(b) all private limited companies having paid up share capital of rupees twenty crore or more;
(c) all companies having paid up share capital of below threshold limit mentioned in (a) and (b) above, but having public borrowings from financial institutions, banks or public deposits of rupees fifty crores or more.”
Now, the Companies (Audit and Auditors) Second Amendment Rules, 2017, amend clause (b) of rule 5. The amendment rules reads, “in the Companies (Audit and Auditors) Rules, 2014, in rule 5, in clause (b), for the word “twenty”, the word “fifty” shall be substituted.
This amendment rules increase threshold limit for rotation of auditors for private companies by a good 150%.
As number of companies and auditors is not much, it may not affect stakeholders significantly but our commitment towards corporate governance.
Posted in Chapter X - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility
Tagged Audit Committee, Auditor, Auditor Rotation, Companies Act 2013, Corporate Law, India, Ministry of corporate affairs, The Companies (Audit and Auditors) Rules 2014, the Companies (Audit and Auditors) Second Amendment Rules 2017
Government of India has removed a dozen difficulties from the Companies Act, 2013. Yes, the Companies (Removal of Difficulties) Third Order, 2016 is twelfth order in Removal of difficulties series of Orders in these three years.
In this post we will discuss this Removal of Difficulties Order.
Posted in Chapter I - CA2013, Chapter X - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility
Tagged Auditor, Removal of Difficulties, Rotation of Auditor, Section 139 of Companies Act 2013, The Companies (Audit and Auditors) Rules 2014, the Companies (Romoval of Difficulties) Third Order 2016
On 18th May 2016 Insurance Regulatory and Development Authority of India issued revised guidelines on corporate governance for insurance companies. In earlier post we discussed these guidelines in brief. In this post, we will briefly discuss, Key Management Persons for insurance companies as mentioned in these guidelines.
On 18th May 2016 Insurance Regulatory and Development Authority of India issued revised guidelines on corporate governance for insurance companies. In last post we discussed these guidelines in brief. In this post, we will briefly discuss, Board Committees for insurance companies as mentioned in these guidelines.
Posted in CorpGov, Governance and Responsibility
Tagged Audit Committee, Board Committee, Corporate Social Responsibility Committee, Insurance Company, Insurance Regulatory and Development Authority, Investment Committee, Nomination and Remuneration Committee, Policyholder Protection Committee, Risk Management Committee, With Profit Committee
On 18th May 2016 Insurance Regulatory and Development Authority of India issued revised guidelines on corporate governance for insurance companies. These Guidelines are applicable from finance year 2016 – 17 except a relief later on granted in respect of auditor. In this post, we will briefly discuss these revised guidelines.
Yesterday late evening, I posted here about press release issued by Ministry of Corporate Affairs. Soon thereafter, two files uploaded on Official Gazette website with two notifications in each. In earlier post here today, we discussed establishment and jurisdiction of various NCLT benches.
In this post, we will have a bird’s eye view on Sections notified on 1st June 2016 related to NCLT.
Posted in Chapter I - CA2013, Chapter II - CA2013, Chapter IX - CA2013, Chapter VI - CA2013, Chapter VII – CA2013, Chapter XI - CA2013, Chapter XIV - CA2013, Chapter XV - CA2013, Chapter XXVII - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility
Tagged Accounts, Annual General Meeting, Annual Return, Articles, Auditor, Board of Directors, Boards’ Report, class-action suits, Debentures, deposits, Deposits Creditors and Charges, General Meeting, Incorporation, Incorporation & Registration, Inquiry, INQUIRY AND INVESTIGATION, Inspection, Investigation, Members and Shareholders, Memorandum, National Company Law Appellate Tribunal, National Company Law Tribunal, NCLAT, NCLT, Oppression and Mismanagement, Shares and Securities, Statutory Audit
Compliance of Indian corporate law is a big issue for its stakeholders. Successive government here talk about ease of doing business and do mammoth task to achieve it with confusion related to directions.
The Companies Act, 2013 followed by end numbers of Companies Rules and their amendment rules was not enough; Ministry of Corporate Affairs launched V2R2 through its high profile contractor Infosys. Now, we have another circular to get some “ease of doing relaxation”. We will discuss short term circular here.
General Circular 03/2016 dated 12th April 2016 aims to Relaxation of additional fees and extension of last date of filing of various e-Forms under the Companies Act, 2013. The circular read as under:
“This ministry has launched V2R2 on 28th March, 2016, downtime was given to Infosys from 25th March 2016 to 27th March, 2016, since the launch of the system, a number of stakeholders have faced issues and representations have been received from stakeholders to resolve the issue including, for allowing waiver of additional till the new system stabilizes.
In view of the above, it has been decided to relax the additional fee payable on e- forms which are due for filing by companies between 25th March 2016 to 30th April 2016 as one time waiver of additional fee and it is also clarified to stakeholders if such due e – forms are filed after 10.05.2016, no such relaxation shall be allowed.
This issues with the approval of the competent authority.”
This circular has many communications to its stakeholders. Most read is, “Forms due for filing during period between 25th March, 2016 to 30th April, 2016 may be filed without additional fee till 10th May 2016”.
The circular contain other interpretation and information:
It is advisable, not to file any document related to companies without assuming own risk.
This circular does not talk about Limited Liability Companies, to keep trying and assume own risk.
I have just a request with government (please read bureaucracy, Not PM Modi), please understand compliance calendar of stakeholders. December to February may be best time to experiment.
Please note: This blog invite readers to share their comments, suggestions, hardship, queries and everything in comment section. This blog post is not a professional advice but just a knowledge sharing initiative for mutual discussion.
Government recently introduced the Companies (Amendment) Bill, 2016 to the Companies Act, 2013 proposes thirteen amendments in Section 2 related to definitions. Definition clauses always need contextual reading. Now, we will discuss these amendments in definitions.
The Companies (Auditor’s Report) Order, 2016 is notified on 29th March 2016 in supersession of the Companies (Auditor’s Report) Order, 2015 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii), vide number S.O. 990 (E), dated the 10th April, 2015, except as respects things done or omitted to be done before such supersession.
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In an order dated 17th February 2016 Whole Time Member of Securities and Exchange Board of India, debars an auditor (Chartered Accountant is this case) from issuing any certificate. SEBI held that the Auditors had aided and abetted the Company in committing the alleged fraud.
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On 1st February 2016, Ministry of Corporate Affairs uploaded the report of Companies Law Committee on its website here. In 7th post on this report, we will discuss political surrender and failure to deliberate up to its mandate by the committee. Indian Investors need immediate public discussion and required to make their suggestion to government for better disclosures based regime in political contributions by companies.
On 1st February 2016, Ministry of Corporate Affairs uploaded the report of Companies Law Committee on its website here. In 5th post on this report, we will discuss recommendations of the committee related to Auditors, Directors, Independent Directors, etc.
On 1st February 2016, Ministry of Corporate Affairs uploaded the report of Companies Law Committee on its website here. In 4th post on this report, we will discuss recommendations of the committee related to shares, debentures, general meeting, NFRA, Board Report, CSR etc.
Posted in Companies Act 2013, CorpGov, CSR, Governance and Responsibility, Truth of Our Time
Tagged Board Report, CSR, Debentures, General Meeting, NFRA, Shares
On 1st February 2016, Ministry of Corporate Affairs uploaded the report of Companies Law Committee on its website here. In 3rd post on this report, we will discuss recommendations of the committee related to Incorporation and allotment of capital securities.
On 1st February 2016, Ministry of Corporate Affairs uploaded the report of Companies Law Committee on its website here. In second post on this report, we will discuss recommendations of the committee related to Definitions in the Companies Act, 2013.
On 1st February 2016, Ministry of Corporate Affairs uploaded the report of Companies Law Committee on its website here. In this post, I will discuss recommendations which might affect Company Secretaries.
Before reading further, I would like to disclose that I was part of two groups; Task Force on Companies Law and Research Group on Companies Law constituted by the Institute of Company Secretaries of India. All view here are personal and not of these groups or ICSI.
Posted in Companies Act 2013, Company Secretary, CorpGov, Governance and Responsibility, Institute of Company Secretaries of India - ICSI, Secretarial Audit, Secretarial Standards, Truth of Our Time
Tagged Annual Return, Companies Act 2013, Companies Law Committee, Company Secretary, Key managerial personnel, Secretarial Audit, Secretarial Standards
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