Category Archives: CorpGov

AMENDMENT: Administration of CSR

Posted on February 6, 2015 | 5 comments

According to Rule 4(2) of the Companies (Corporate Social Responsiblilty Policy) Rules 2014 as discussed earlier here:

“The Board of a company may decide to undertake its CSR activities approved by the CSR Committee, through a registered trust or a registered society or a company established by the company or its holding or subsidiary or associate company under section 8 of the Act or otherwise:

Provided that—

(i) if such trust, society or company is not established by the company or its holding or subsidiary or associate company, it shall have an established track record of three years in undertaking similar programs or projects;

(ii) the company has specified the project or programs to be undertaken through these entities, the modalities of utilization of funds on such projects and programs and the monitoring and reporting mechanism.”

Now, Ministry of Corporate Affairs came out with the Companies (Corporate Social Responsiblity Policy) Rules 2015 dated 19th January 2015. These amendments shall come into effect from date of publication. After these amendments above mentioned sub – rule (2) of Rule 4 shall be as under:

Continue reading →

5 Comments

Posted in Chapter IX - CA2013, Companies Act 2013, CorpGov, CSR, Governance and Responsibility

Tagged , , , , ,

AMENDMENT: COPY OF RESIGNATION OF DIRECTOR

Posted on February 3, 2015 | 1 comment

Rule 16 of the Companies (Appointment and Qualification of Directors) Rules 2014 as earlier discussed earlier here, prescribes where a director resigns from his office, he shall within a period of thirty days from the date of resignation, forward to the Registrar a copy of his resignation along with reasons for the resignation in Form DIR – 11 along with the fee as provided in the Companies (Registration Offices and Fees) Rules, 2014.

The Ministry of Corporate Affairs bring out an amendment to these Rules through the Companies (Appointment and Qualification of Directors) Amendment Rules 2015 dated 19th January 2015. These Rule are applicable from date of publication of these amendment rules in Official gazette.

Continue reading →

1 Comment

Posted in Chapter XI - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

Tagged , , , , ,

Saving Private Assets

Posted on January 20, 2015 | 1 comment

[A new Web portal LawStreetIndia launched on Pongal this year. This piece was originally published on LawStreetIndia here on 15th January 2015. This blog wish all success to the portal]

Investor Education and Protection Fund is a permanent parking lot of all unclaimed shares and dividend under the Companies Act. Unending hunger of fund by government results its claim on everything unclaimed with help of hurriedly drafted laws. Yes, for all legal purpose, government is not going to own such money and keep it in trust but fund so transferred help to arrange mileage for government as administrator of such fund.

Continue reading →

1 Comment

Posted in Chapter VIII - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility, Truth of Our Time

Tagged , , , , ,

AMENDMENT TO APPOINTMENT AND QUALIFICATION OF DIRECTORS RULES

Posted on January 13, 2015 | 1 comment

Indian Ministry of Corporate Affairs brought an amendment in the Companies (Appointment and Qualification of Directors) Rules 2014 with effect from 18th       September 2014.

Databank:

Now data bank shall not ask for income – tax Permanent Account Number (PAN), [Rule 6(2)(c)]

Only Father’s name will be in record. There will no need for mother’s name and spouse name. I am always of the view there should be option to give name of either of parents on part of person, because law must be gender neutral. [Rule 6(2)(d)]

Continue reading →

1 Comment

Posted in Chapter XI - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

Tagged , , , , ,

THE COMPANIES AMENDMENT BILL 2014: PART 3 OF 3

Posted on January 9, 2015 | 5 comments

The Companies Amendment Bill 2014 has been introduced and passed in Lok Sabha recently. This blog post has intention to analyse proposed changes in the Companies Act 2013.

Most important massage, this amendment prepares a best case for drafting skill development programmes in India. I am reading here this Bill clause by clause. This will be a three part series and part 2 of 3 is present here.

To amend sub-section (1) of section 188 of the said Act to exempt related party transactions between holding companies and wholly owned subsidiaries (WOS) from the requirement of approval of non-related shareholders [Section 16 of the Amendment Bill]

Continue reading →

5 Comments

Posted in Chapter I - CA2013, Chapter XII - CA2013, Chapter XXIX - CA2013, Chapter XXVII - CA2013, Chapter XXVIII - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

Tagged , , , , , , , ,

THE COMPANIES AMENDMENT BILL 2014: PART 2 OF 3

Posted on January 6, 2015 | 5 comments

The Companies Amendment Bill 2014 has been introduced and passed in Lok Sabha recently. This blog post has intention to analyse proposed changes in the Companies Act 2013.

Most important massage, this amendment prepares a best case for drafting skill development programmes in India. I am reading here this Bill clause by clause. This will be a three part series and part 2 of 3 is present here.

To amend sub-section (1) of section 123 of the said Act to include provisions for writing off past losses/depreciation before declaring dividend for the year [Clause 10 of the Amendment Bill]

A forth proviso is being added to the effect that no company shall declare dividend unless carried over previous losses and depreciation not provided in previous year or years are set off against profit of the company for the current year.

Continue reading →

5 Comments

Posted in Chapter I - CA2013, Chapter IX - CA2013, Chapter VIII - CA2013, Chapter XII - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

Tagged , , , , , , , , , , , ,

THE COMPANIES AMENDMENT BILL 2014: PART 1 OF 3

Posted on January 2, 2015 | 2 comments

The Companies Amendment Bill 2014 has been introduced and passed in Lok Sabha recently. This blog post has intention to analyse proposed changes in the Companies Act 2013.

Most important massage, this amendment prepares a best case for drafting skill development programmes in India. I am reading here this Bill clause by clause. This will be a three part series and part 1 of 3 is present here.

To amend clauses (68), (71) of Section 2 and Section 11 of the said Act to omit the requirement for minimum paid-up share capital [Clause 2 and 4 of the Amendment Bill]:

Continue reading →

2 Comments

Posted in Chapter I - CA2013, Chapter II - CA2013, Chapter V - CA2013, Chapter VII – CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

Tagged , , , , , , , , , ,

Amendment in Section 143(5)

Posted on September 24, 2014 | 2 comments

Section 143(5) of the Companies Act 2013, as discussed earlier here originally read as under:

In the case of a Government company, the Comptroller and Auditor-General of India shall appoint the auditor under sub-section (5) or sub-section (7) of section 139 and direct such auditor the manner in which the accounts of the Government company are required to be audited and thereupon the auditor so appointed shall submit a copy of the audit report to the Comptroller and Auditor-General of India which, among other things, include the directions, if any, issued by the Comptroller and Auditor-General of India, the action taken thereon and its impact on the accounts and financial statement of the company.

On 4th September 2014 Ministry of Corporate Affairs came out with the Companies (Removal of Difficulties) Seventh Order, 2014. Which come it force from date of its publication which is 4th September 2014. According to this order, Section 143(5) now read as under:

Continue reading →

2 Comments

Posted in Chapter X - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

Tagged , , ,

SERVICE OF DOCUMENTS

Posted on September 18, 2014 | 3 comments

Section 20 of the Companies Act 2013 discussed earlier here make provision for service of documents for the purpose of this Act.

Service of documents on company

A document may be served on a company or its officer by sending it to the company or the officer at the registered office of the company by registered post or by speed post or by courier service or by leaving it at its registered office or by means of such electronic or other mode as may be prescribed.

Continue reading →

3 Comments

Posted in Chapter II - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

Tagged , , , ,

SHIFTING OF REGISTERED OFFICE OUTSIDE STATE

Posted on September 16, 2014 | 5 comments

Sub – Section (4) and (5) of Section deals with shifting of registered office from one state to another. We have discussed these provisions earlier here.

Any alteration relating to place i.e. state of registered office shall take effect only after approval by the Central Government. The Central Government shall dispose of the application for approval of shifting of registered office from one state to another within sixty days. This alteration should have consent of the creditors, debentures – holders, and other persons concerned with the company. The company should have made sufficient provision for the discharge of all its debts and obligations or adequate security should have been provided for such discharge. This is duty of Central Government, before giving approval of the application to satisfied itself about such consent and such sufficient provision to discharge debts and obligations.

Continue reading →

5 Comments

Posted in Chapter II - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

Tagged , , , , ,

SHIFTING OF REGISTERED OFFICE

Posted on September 15, 2014 | 5 comments

In this post we will discuss, shifting of Registered office –

  1. Within same city, town or village, or
  2. Out side same city, town or village but within same state.

Notice and verification of change of situation of the registered office

In case of change in registered a notice of change duly verified shall be given to Registrar within fifteen days of such change. [Section 12(4)]

Continue reading →

5 Comments

Posted in Chapter II - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

Tagged , , , , ,

Second Amendment to Companies MBP Rules

Posted on August 30, 2014 | 1 comment

On 14th August 2014, Ministry of Corporate Affairs came out with its second amendment to the Companies (Meeting of Board and its Powers) Rules 2014. These Rules come into effect from the date of publication of these amendment Rules in official Gazette which is 14th August 2014.

  1. Rule 3 relating to board meeting through audio vidsual Means discussed earlier here, has been amended to give effect that “scheduled venue of the meeting, which shall be deemed to be a place of the meeting may be a place anywhere and need not be a place in India.
  2. Rule 4(iv) have been amended to the effect that a meeting of Audit Committee through
    Audio Visual means shall not deal with “consideration of financial statement including consolidated financial statement, if any, to be approved by the Board under sub-section (1) of section 134 of the Act. Before amendment, a meeting of Audit Committee through
    Audio Visual means may have not deal with “consideration of accounts” only.

Continue reading →

1 Comment

Posted in Chapter XII - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

Tagged , , , , ,

Company Law Settlement Scheme 2014

Posted on August 29, 2014 | 10 comments

The Central Government issued the Company Law Settlement Scheme 2014 [CLSS-2014] in exercise of power conferred under Section 403 and 460 of the Companies Act, 2014.

Scheme aims to support companies to complete annual filing or got declare themselves dormant.

The Scheme shall be in force from 15th August 2014 to 15th October 2014. Under the scheme any defaulting company may file documents which were due for filing till 30th June 2014. The defaulting company shall pay statutory filing fees along with additional fees of 25% of the actual additional fee payable.

Continue reading →

10 Comments

Posted in Chapter XXIX - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

Tagged , , ,

FILING DOCUMENTS IN REGISTRATION OFFICES

Posted on August 12, 2014 | 3 comments

Section 398 empowers Central Government for making rules relating to filling of documents with registration Offices or Registrar of Companies.

Manner and conditions of filing

Every application, financial statement, prospectus, return, declaration, memorandum, articles, particulars of charges, or any other particulars or document or any notice, or any communication or intimation required to be filed or delivered or served under the Act and rules made there under, shall be filed or delivered or served in computer readable electronic form, in portable document format (.pdf) or in such other format as has been specified in any rule or form in respect of such application or form or document or declaration to the Registrar through the portal maintained by the Central Government on its web-site or through any other website notified by the Central Government. [Rule 7 of the Companies (Registration Offices and Fees) Rules 2014]

Continue reading →

3 Comments

Posted in Chapter XXIV - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

Tagged , , , , ,

DUTIES AND POWERS OF AUDITORS

Posted on August 8, 2014 | 3 comments

We have discussed provisions under the Companies Act 2013 related to audit report, duties, power and penalties earlier here.

Auditor’s Report:

The auditor shall make a report to the members of the company on accounts examined by him on every financial statements and report financial statement give a true and fair view of the state of the company’s affairs at the end of its financial year and profit or loss and cash flow for the year and such other matters. [Section 143(2)]

Continue reading →

3 Comments

Posted in Chapter X - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

Tagged , , , , , ,

LIABILITY AND DISQUALIFICATION OF AUDITOR

Posted on August 7, 2014 | 2 comments

According to Section 147(2) of the Companies Act 2013 discussed earlier here, if an auditor of a company contravenes any of the provisions of section 139, section 143, section 144 or section 145, the auditor shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees. If an auditor has contravened such provisions knowingly or willfully with the intention to deceive the company or its shareholders or creditors or tax authorities, he shall be punishable with imprisonment for a term which may extend to one year and with fine which shall not be less than one lakh rupees but which may extend to twenty-five lakh rupees.

Continue reading →

2 Comments

Posted in Chapter X - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

Tagged , , , , , ,

AUDIT ROTATION

Posted on August 5, 2014 | 7 comments

Sub – section (2) of this section 139 of the Companies Act, 2013 discussed earlier here expressly say that provide that no listed company or some other companies as notified shall appoint or re – appoint (i) an individual for more than one term of five consecutive years, or (ii) an audit firm for more than two terms of five consecutive years. Any audit firm shall not be appointed as auditor which has any common partner or partners with the firm whose tenure has expired in the company immediately preceding financial year.

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:-

Continue reading →

7 Comments

Posted in Chapter X - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

Tagged , , , , , ,

APPOINTMENT OF AUDITOR

Posted on August 4, 2014 | 5 comments

True and fair Audits are core concern for corporate world and its regulators.  The manner of appointment of auditors may affect independence of audit. Section 139 of the Companies Act 2013 discussed earlier here, discuss appointment of auditor in detail.

The Companies (Audit and Auditors) Rules 2014 further prescribes tasteless syrup with bitter pills recommended under Chapter X of the Companies Act 2013.

Continue reading →

5 Comments

Posted in Chapter X - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

Tagged , , , , , ,

INVESTMENT IN OTHERS’ NAME

Posted on August 1, 2014 | 1 comment

According to Section 187 of the Companies Act 2013 discussed earlier here, all investments made or held by a company in any property, security or other asset shall be made and held by it in its own name.

The company may hold any shares in its subsidiary company in the name of any nominee or nominees of the company, if it is necessary to do so, to ensure that the number of members of the subsidiary company is not reduced below the statutory limit. [Proviso to Section 187(1)]

Continue reading →

1 Comment

Posted in Chapter XII - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

Tagged , , , , , ,

RELATED PARTY TRANSACTION

Posted on July 30, 2014 | 9 comments

Section 188 of the Companies Act 2013 lay down provisions regarding related party transactions. This Section discusses type of related party contracts and arrangements, disclosure in board report, rendered related party contract voidable for non – ratification, recovery of any loss and provision for fines. We have discussed these provisions earlier here.

Rule 15 of the Companies (Meeting of Boards and its powers) Rules 2014 add conditions on which a company may enter into a contract with related party:

Continue reading →

9 Comments

Posted in Chapter XII - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

Tagged , , , , , ,