DOCUMENTS AND CERTIFICATION

Posted on August 20, 2014 | 1 comment

In this blog we will discuss provisions relating to documents related to foreign company and their certification.

Office where documents to be delivered and fee for registration of documents

Any document which any foreign company is required to deliver to the Registrar shall be delivered to the Registrar having jurisdiction over New Delhi, and references to the Registrar in Chapter XXII of the Act i.e. Companies Incorporated Outside India and these rules shall be construed accordingly. [Rule 8(1) of the Companies (Registration of Foreign companies) Rules 2014]

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Posted in Chapter XXII - CA2013, Companies Act 2013

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FINANCIAL STATEMENT OF FOREIGN COMPANY

Posted on August 19, 2014 | 3 comments

According to Section 381 of the Companies Act 2013 discussed earlier here, every foreign company, unless exempted, shall in every calendar –

  • make out a balance sheet and profit and loss account; and
  • deliver a copy of those documents to the Registrar.

If any of these documents is not in English Language, there shall be annexed to it a certified translation thereof in English language.

Every foreign company shall send to the Registrar along with these documents, a copy of a list of all places of business established by the company in India as on date of the Balance Sheet made out.

Rule 4 of the Companies (Registration of foreign Companies) Rules 2014 prescribes in detail.

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Posted in Chapter XXII - CA2013, Companies Act 2013

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Establishing Foreign Company

Posted on August 18, 2014 | 1 comment

We have discussed General provisions related to foreign companies earlier here. Section 380 asks for delivery of certain documents to the Registrar of Companies within thirty days of establishment of its place of business. The Section requires following documents to be delivered:

  • a certified copy of the charter, statute or memorandum and articles of the company or other instrument constituting or defining the constitution of the company and if the instrument is not in English language, a certified translation thereof in the English language;
  • the full address of the registered or principal office of the company;
  • a list of the directors and secretary of the company with particulars;
  • the names and addresses of one or more persons resident in India authorised to accept on behalf of the company service of process and any notices or other documents required to be served on the company;
  • the full address of the office of the company in India which is deemed to be its principal place of business in India;
  • particulars of opening and closing of a place of business in Indian on earlier occasions;
  • declaration that none of the directors of the company or authorised representative in India has ever been convicted or debarred from formation of companies and management in India or abroad; or
  • other prescribed particulars.

Rule 3 of the Companies (Registration of foreign Companies) Rules 2014 prescribes in detail.

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Posted in Chapter XXII - CA2013, Companies Act 2013

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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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MAINTAINING AND RECEIVING DOCUMENTS ELECTRONICALLY

Posted on August 13, 2014 | 2 comments

The Central Government shall set up and maintain a secure electronic registry in which all the applications, financial statement, prospectus, return, register, memorandum, articles, particulars of charges, or any particulars or returns or any other documents filed under the Act to be electronically stored. [Rule 9(1) of the Companies (Registration Offices and Fees) Rules 2014]

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Posted in Chapter XXIV - CA2013, Companies Act 2013

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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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REGISTRATION OFFICES

Posted on August 11, 2014 | 1 comment

We earlier here discussed provisions of Chapter XXIV of the Companies Act 2013 related to registration offices. The Companies (Registration Offices and Fees) Rules 2014 further elaborate these provisions.

Working Hours at Registrar Offices:

The central Government empowered to establish registration offices under Section 396 of the Companies Act 2013.

The Central Government shall establish such number of offices at such places as it thinks fit, specifying their jurisdiction for the purpose of exercising such powers and discharge of such functions as are conferred on the Central Government by or under this Act or under the rules made there under and for the purposes of registration of companies under the Act. [Rule 4(1) of the Companies (Registration Offices and Fees) Rules 2014]

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Posted in Chapter XXIV - CA2013, Companies Act 2013

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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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LOAN AND INVESTMENT

Posted on July 31, 2014 | 7 comments

According to Section 185 of the Companies Act 2013, save as otherwise provided in this Act, no company shall, directly or indirectly, advance any loan, including any loan represented by a book debt, to any of its directors or to any other person in whom the director is interested or give any guarantee or provide any security in connection with any loan taken by him or such other person. We have discussed this Section earlier here.

Rule 10 of the Companies (Meetings of Board and its Powers) Rules 2014 exempt wholly owned subsidiary from the requirements of Section 185 when such loan is utilised for principal business activity of the subsidiary company.

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Posted in Chapter XII - CA2013, Companies Act 2013

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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 general assessment survey on working of Institute of Company Secretaries of India (ICSI). The survey is open for a limited period. Please Spent few minutes and take part in this survey here .

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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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