The Ministry of Corporate Affairs placed here on its website a draft of the Companies (Registration Offices and Fees) Second Amendment Rules, 2015. These amendment Rules will come into force from the date of its publication in Official Gazette.
Posted in Chapter VI - CA2013, Chapter XXIV - CA2013, Companies Act 2013
Tagged Companies Act 2013, Corporate Law, India, Ministry of corporate affairs, Public Inspection, The Companies (Registration of Charges) Rules 2014, The Companies (Registration Offices and Fees) Rules 2014, the Companies (Registration Offices and Fees) Second Amendment Rules 2015
The Ministry of Corporate Affairs placed here on its website a draft of the Companies (Declaration and Payment of dividend) Second Amendment Rules, 2015. These amendment Rules will come into force from the date of its publication in Official Gazette.
These amendment rules proposed to omit Rule 3(5) of the Companies (Declaration and Payment of dividend) Rules, 2014.
The Deleted Rule 3(5) read as under,
“No company shall declare dividend unless carried over previous losses and depreciation not provided in previous year are set off against profit of the company of the current year the loss or depreciation, whichever is less, in previous years is set off against the profit of the company for the year for which dividend is declared or paid.”
Posted in Chapter VIII - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility
Tagged Companies Act 2013, Corporate Law, Dividend, India, Ministry of corporate affairs, the Companies (Declaration and Payment of Dividend) Rules 2014, the Companies (Declaration and Payment of dividend) Second Amendment Rules 2015, The Companies (Registration of Charges) Rules 2014
The Ministry of Corporate Affairs placed here on its website a draft of the Companies (Registration of Charges) Amendment Rules, 2015. These amendment Rules will come into force from the date of its publication in Official Gazette.
These amendment rules proposed to amend Rule 3(4)(a) of the Companies (Registration of Charges) Rules, 2014. This amendment in the Rules is in alignment with the Companies (Amendment) Act, 2015 relevant part of which came into effect from 29th May 2015. Purpose of these amendments in the Rules is to provide law in event of company exercise its option not to have a common seal. After this amendment the Rule 3(4) shall read as under:
A copy of every instrument evidencing any creation or modification of charge and required to be filed with the Registrar in pursuance of Section 77, 78 or 79 shall be verified as follows-
(a) where the instrument or deed relates solely to the property situated outside India, the copy shall be verified by a certificate issued either under the seal of the company under the seal, if any, of the company, or under the hand of any director or company secretary of the company or an authorised officer of the charge holder or under the hand of some person other than the company who is interested in the mortgage or charge;
The Ministry of Corporate Affairs placed here on its website a draft of the Companies (Incorporation) Second Amendment Rules, 2015. These amendment Rules will come into force from the date of its publication in Official Gazette.
These amendment rules proposed to amend:
Application for incorporation of companies:
The Amendment Rules introduce a proviso to Rule 12. After this amendment, Rule 12 of the Companies (Incorporation) Rules 2014 shall read:
In my earlier post here I have raised some issues related to issuance of secretarial standards. As these are curable technical issues. I continue my study of these Secretarial Standards.
In this post, I will discuss Secretarial Standards related to convening a board meeting and general meeting under SS – 1 and SS – 2 respectively.
Authority for Board Meeting:
According to Paragraph 1.1.1 of SS – 1;
convene a Meeting of the Board, in consultation with
unless otherwise provided in the Articles.
Posted in Chapter VII – CA2013, Chapter XIII - CA2013, Companies Act 2013, Company Secretary, CorpGov, Governance and Responsibility, Secretarial Standards
Tagged Board meeting, Company Secretary, General Meeting, India, MCA, Ministry of corporate affairs, Registrar of Companies, Secretarial Standard, The Companies Act 2013
In my earlier post here I have raised some issues related to issuance of secretarial standards. As these are curable technical issues. I continue my study of these Secretarial Standards.
In this post, I will discuss scope of the Secretarial Standards namely SS – 1 and SS – 2 issued by Institute of Company Secretaries of India and interesting definitions.
SS – 1 is applicable to the Meetings of Board of Directors of all companies incorporated under the Act except One Person Company (OPC) in which there is only one Director on its Board. The principles enunciated in this Standard for Meetings of the Board of Directors are also applicable to Meetings of Committee (s) of the Board, unless otherwise stated herein or stipulated by any other applicable Guidelines, Rules or Regulations.
SS – 1 is not applicable to the meeting of Board of One Person Companies which has only one director, otherwise SS – 1 is applicable to One Person Companies Also.
Posted in Chapter VII – CA2013, Chapter XIII - CA2013, Companies Act 2013, Company Secretary, CorpGov, Governance and Responsibility, Secretarial Standards
Tagged Board meeting, Company Secretary, General Meeting, India, MCA, Ministry of corporate affairs, Registrar of Companies, Secretarial Standard, The Companies Act 2013
Internal Audit is one most important tool for better Corporate Governance in any company. This is not a post – mortem like statutory audit, but may provide real time analysis and processing of transactions through watchful eyes.
According to Section 138 of the Companies Act, 2013 discussed earlier here, “Such class or classes of companies as may be prescribed shall be required to appoint an internal auditor, who shall either be a chartered accountant or a cost accountant, or such other professional as may be decided by the Board to conduct internal audit of the functions and activities of the company. The Central Government may, by rules, prescribe the manner and the intervals in which the internal audit shall be conducted and reported to the Board.”
Section 118(10) of the Companies Act, 2013 made it mandatory for every company to observe Secretarial Standards on general and board meetings. According to sub – section 118(10), these two Secretarial Standards shall be “specified” by the Institute of Company Secretaries of India and “approved” as such by the Central Government.
This sub – section does not confer any power to the Institute of company Secretaries of India to “issue” any Secretarial standards. This just confer power to “specify” some standards related to general and board meeting which may have been issued by the institute.
Whether the Companies Act, 2013 somewhere else confer any power to the institute of company Secretaries of India to “issue” any secretarial standards? If yes, Secretarial Standards should be issued under the power conferred by that provision and should only be “specified” under sub – section 118(10).
This Supreme Court Judgement available here is a milestone in implementation of new corporate law and development of corporate jurisprudence in India. On cautious note, this is just another step effective implementation of law related to National Company Law Tribunal and its appellate body. Now, the Companies Act, 2013 need minor amendment in line of present Supreme Court decision and ball is now in court of political leadership. Supreme Court decided three important issues in the case.
Constitutional validity of NCT and NCLAT:
By Notification dated 12.09.2013, the Central Government has constituted the National Company Law Tribunal (NCLT) under power conferred by Section 408 of the Companies 2013. By the aforesaid Notification dated 12.09.2013, National Company Law Appellate Tribunal (NCLAT) has also been constituted by the Central Government under power conferred by Section 408 of the Companies 2013.
As discussed earlier here according to Section 136, a copy of the financial statements, including consolidated financial statements, if any, auditor’s report and every other document required by law to be annexed or attached to the financial statements, which are to be laid before a company in its general meeting, shall be sent to every member of the company, to every trustee for the debenture-holder of any debentures issued by the company, and to all persons other than such member or trustee, being the person so entitled, not less than twenty-one days before the date of the meeting. [Section 136(1)]
Statement containing salient features of financial statements:
In the case of a listed company, the provisions of this section shall be deemed to be complied with, if the copies of the documents are made available for inspection at its registered office during working hours for a period of twenty-one days before the date of the meeting and a statement containing the salient features of such documents in the prescribed form or copies of the documents, as the company may deem fit, is sent to every member of the company and to every trustee for the holders of any debentures issued by the company not less than twenty-one days before the date of the meeting unless the shareholders ask for full financial statements. [First Proviso to Section 136(1)]
Irrespective of political parties in power, Government of India fails to deliver any substantial ease of doing business or living life. #EaseOfDoingBusiness #EaseOfLivingLife
There is no real delivery except creating some online filing like MCA21 and online payment of fees, taxes and duties in first fifteen years of this 21st century. Switching to online environment from paper environment is just change of mode not a relaxation for ease of doing business or ease of living life from the side of government. This is just a technical advancement without role of government. One can understand it switching from inkpot system to fountain pen or ballpoint pen, which was also resulted in substantial reduction of time. Another example may be paper based tax calculation to calculator based tax calculation.
Presently, government has also come out of another gimmick called integrated incorporation forms. Without digging deep, name just suggests; there is no ease just integration. Instead of less pain, all quantum of pain at one place one time with more possible error of treatment at once. #EaseOfDoingBusiness #EaseOfLivingLife
Posted in Chapter II - CA2013, Companies Act 2013, Governance and Responsibility, Truth of Our Time
Tagged Corporate Law, Ease of Doing Business, Ease of Living Life, India, Kheej of Doing Business, Ministry of corporate affairs, Official Gazette, Tease of Doing Business, The Compaanies (Incorporation) Amendment Rules 2015, The Companies (Incorporation) Rules 2014, The Companies Act 2013
Form INC-7 is required to be filed pursuant to Section 7 (1) of the Companies Act, 2013 and pursuant to Rule 10, 12, 14 and 15 of Companies (Incorporation) Rules, 2014. New version of this form came into force from 1st May 2015 by the Companies (Incorporation) Amendment Rules 2015. This replaced earlier version of Form INC – 7 discussed earlier here.
Form INC-7 deals with incorporation of a new company (other than OPC). This form is accompanied by supporting documents such as details of Directors/subscribers, the Memorandum of Association (MoA) and Articles of Association (AoA) and evidence of payment of stamp duty. Once the Form is processed and found complete, a company is registered and CIN is allocated.
The Form INC – 7 is not required where Integrated Incorporation Form INC – 29 was opted by applicant.
Form INC – 22 is required to be filed pursuant to Section 12 (2) & 12 (4) of the Companies Act, 2013 and Rule 25 and 27 of the Companies (Incorporation) Rules, 2014.
New version of this form came into force from 1st May 2015 by the Companies (Incorporation) Amendment Rules 2015. This replaced earlier version of Form INC – 22 discussed earlier here.
The company is required to furnish to the Registrar verification of its registered office in Form INC – 22 within a period of thirty days from the date of its incorporation. The company can also specify the address of registered office at the time of filing incorporation Forms. For this, the applicant shall upload Form INC-22 as linked form to Form INC-7. In case of One Person Company, the particulars of the registered office address can be filed in Form INC-2 only. Any change in situation of the registered office thereafter, the company is required to notify to Registrar in Form INC-22 within fifteen days of such change.
Form INC-29 deals with the single application for reservation of name, incorporation of a new company and/or application for allotment of DIN. This Form is accompanied by supporting documents including details of Directors & subscribers, MoA and AoA etc. Once the Form is processed and found complete, company would registered and CIN would be allocated. Also DINs gets issued to the proposed Directors who do not have a valid DIN. Maximum three Directors are allowed for using this integrated form for allotment of DIN while incorporating a company.
Select the type of proposed company under drop-down provided. Producer Company should be selected only in case company complies with the provisions of Part IXA of the Companies Act, 1956. Incorporation of a charitable company under section 8 and company defined under chapter XXI of the Companies Act, 2013 are not facilitated under this integrated incorporation form.
Posted in Chapter II - CA2013, Companies Act 2013
Tagged Companies Act 2013, Corporate Law, Ease of Doing Business, India, Integrated Incorporation Form, Ministry of corporate affairs, One Person Company, The Companies (Incorporation) Amendment Rules 2015, The Companies (Incorporation) Rules 2014, undisered names
At the time of writing this blog post, I have no information of publication of the Company (Incorporation) Rules, 2015 which seems to come into effect with effect from 1st May 2015 as Official MCA21 portal has issued all forms prescribed under these forms.
I have no words of advice on enforceability of these rules until copy of publication in official gazette. These Rules come into effect only after publication in official gazette. [Rule 1(1) of the Companies (Incorporation) Amendment Rules 2015]
Penalty:
In original Rule 5 discussed earlier here, penalty in relation to contravention of these rules by One Person Company or its officer was prescribed. Rule 5 of these rules is being deleted.
But penalty is still there. New Rule 7A is introduced for the purpose. I highlight effect in deletion of rule 5 and introduction of rule 7A here:
Posted in Chapter II - CA2013, Companies Act 2013
Tagged Companies Act 2013, Corporate Law, Ease of Doing Business, India, Indian Companies Act, Integrated Incorporation Form, Ministry of corporate affairs, One Person Company, The Companies (Incorporation) Amendment Rules 2015, The Companies (Incorporation) Rules 2014, Undesired Names
Rule 6 of the Companies (Accounts) Rules 2014 deals with consolidation of Accounts. This rule got its power from second proviso to sub – section (3) of Section 129.
According to Section 129(3), where a company has one or more subsidiaries, it shall, in addition to financial statements provided under sub-section (2), prepare a consolidated financial statement of the company and of all the subsidiaries in the same form and manner as that of its own which shall also be laid before the annual general meeting of the company along with the laying of its financial statement under sub-section (2).
Posted in Chapter IX - CA2013, Companies Act 2013, Governance and Responsibility
Tagged 2015, Accounting Standards, Consolidation of Accounts, India, MCA, Ministry of corporate affairs, Registrar of Companies, the Companies (Accounts) Amendment Rules 2014, The Companies (Accounts) Amendment Rules 2015, The Companies (Accounts) Rules 2014, the Companies (Indian Accounting Standards) Rules, The Companies Act 2013
In continuation of our earlier post dealing with Financial Statements and Boards’ Report, we will read Boards’ report of companies other than One Person Companies here.
Managerial Remuneration [Rule 5(1) of Managerial Remuneration Rules]:
Every listed company shall disclose in the Board’s report-
(i) the ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year;
The expression “median” means the numerical value separating the higher half of a population from the lower half and the median of a finite list of numbers may be found by arranging all the observations from lowest value to highest value and picking the middle one. If there is an even number of observations, the median shall be the average of the two middle values.
Posted in Chapter IX - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility
Tagged Boards’ Report, Financial Statements, India, Managerial Remuneration, MCA, Ministry of corporate affairs, Particulars of employees, Registrar of Companies, The Companies (Accounts) Rules 2014, The Companies Act 2013
In continuation of our earlier post dealing with Financial Statements and Boards’ Report, we will read Boards’ report of companies other than One Person Companies here.
Particulars of Contracts or Arrangements [Rule 8(2) of Accounts Rules read with Section 134(3)(h)]:
The Report of the Board shall contain the particulars of contracts or arrangements with related parties referred to in sub-section (1) of section 188 in the Form AOC-2.
As discussed earlier here and here, Section 188 lists out certain transaction restricted to be entered into with related parties.
Posted in Chapter IX - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility
Tagged Boards’ Report, Conservation of Energy, CSR Reporting, Evaluation of Boards Performance, Financial Statements, Foreign Exchange, India, MCA, Ministry of corporate affairs, Registrar of Companies, Technology Absorption, The Companies (Accounts) Rules 2014, The Companies Act 2013
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AishMGhrana 