Category Archives: Governance and Responsibility

Governance and Responsibility – In life of Nation, State, Government, Corporate, Society and Individual

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.

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

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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)]

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

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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.

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

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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.

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

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INDIAN DEPOSITORY RECEIPTS

Posted on August 21, 2014 | Leave a comment

We have discussed earlier here that according to Section 390 of the Companies Act 2013, the Central government make rules for –

  • the offer of Indian Depository Receipt;
  • the requirement of disclosures in prospectus or letter of offer issued in connection with Indian Depository Receipt;
  • the manner in which Indian Depository Receipt shall be dealt with in a depository mode and by custodian and underwriters; and
  • the manner of sale, transfer or transmission of Indian Depository Receipt,

by a foreign company.

These Rules are contained in Rule 13 of the Companies (Registration of foreign Companies) Rules, 2014.

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

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Listed among Best Blogs in India


Listed among Best Blogs in India by two Reputed Blog Directories

Listed among Best Blogs in India by two Reputed Blog Directories

 

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Posted on August 20, 2014 in Governance and Responsibility, Truth of Our Time

REGISTRATION FEES

Posted on August 14, 2014 | 1 comment

The documents required to be submitted, filed, registered or recorded or any fact or information required or authorised to be registered under the Act shall be submitted, filed, registered or recorded on payment of the fee or on payment of such additional fee as applicable, as mentioned in Table annexed to these rules. [Rule 12(1) of the Companies (Registration Offices and Fees) Rules 2014]

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Posted in Chapter XXIV - CA2013, Companies Act 2013, Truth of Our Time

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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]

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

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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)]

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

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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.

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

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REMOVAL AND RESIGNATION OF AUDITOR

Posted on August 6, 2014 | 1 comment

In this post we will discuss resignation and removal of auditor of a company.

REMOVAL:

The auditor may be removed from his office before expiry of his term only by special resolution after approval from central government. The auditor concern shall be given opportunity of being heard. [Section 140(1) of the Companies Act 2013 discussed earlier here]

The application to the Central Government for removal of auditor shall be made in Form ADT – 2 and shall be accompanied with fees as provided for this purpose under the Companies (Registration Offices and Fees) Rules, 2014. [Rule 7(1) of the Companies (Audit and Auditors) Rules 2014]

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

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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:-

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

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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.

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

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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)]

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

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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:

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

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Aside

I have done a survey earlier on working of MCA21 and wrote a post based on that survey. You can find that post here. Based on these result, I have an RTI reply discussed here. Now, I am here with … Continue reading →

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Posted on July 29, 2014

EXERCISE OF POWER IN BOARD MEETING

Posted on July 29, 2014 | 2 comments

One simple solution for cost effective and efficient method to pass a resolution is by passing it by circulation. Section 175 of the Companies Act 2014 the resolution shall be circulated in draft together with all necessary papers to all directors (or members of committee) in same manner as notice. The resolution shall be passed when approved by majority of directors (or members) who is entitled to vote. When one third or more directors require that it must be decided in a meeting, it shall be decided in meeting. Every resolution passed by circulation must be noted in next board meeting and made part of minutes of that meeting. Rule 5 of these Rules adds, a resolution in draft form may be circulated to the directors together with the necessary papers for seeking their approval, by electronic means which may include E-mail or fax.

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

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COMMITTEES AND VIGIL MECHANISM

Posted on July 28, 2014 | 4 comments

We have discussed Committees under the Companies Act 2013 earlier here.

Following committees has statutory mandate:

  1. Social Responsibility Committee
  2. Audit Committee
  3. Nomination and Remuneration Committee, and
  4. Stakeholders Relationship Committee.

The requirement related to Social Responsibility committees is given in Section 135 and the Companies (Corporate Social Responsibility Policy) Rules 2014. Section 178(5) requires every company with more than one thousand shareholders to have stakeholders’ relationship committee. Rule 6 of the Companies (Meeting of Boards and its powers) Rules 2014 set threshold limits.  The Board of directors of every listed company and the following classes of companies shall constitute an Audit Committee and a Nomination and Remuneration Committee of the Board-

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

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MEETING THROUGH AUDIO VISUAL MEANS

Posted on July 25, 2014 | 7 comments

According to Section 173(2) of the Companies Act 2013, directors may participate through:

  1. In person,
  2. Through Video Conferencing,
  3. Other Audio – visual means, as may be prescribe.

Such means must be capable of recording of proceedings and recognising the participation of directors.

The Companies (Meetings of Boards and its Powers) Rules 2014 elaborate provisions related to meeting through audio visual means.

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

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COMPENSATION TO DIRECTOR FOR LOSS OF OFFICE

Posted on July 24, 2014 | 1 comment

Section 191 of the Companies Act 2013 discusses payment of compensation for Director for loss of office.  In an earlier post here, we have discussed this section in detail.

According to sub – section (1) of section 191, no director of a company shall, in connection with—

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

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