Tag Archives: Ministry of corporate affairs

EXEMPTION TO GOVERNMENT COMPANIES

Posted on June 11, 2015 | 1 comment

On 5th June 2015, Ministry of Corporate Affairs posted here a draft notification to be published in Official Gazette announcing some exemption to Not for profit Companies.

As there is no effective date is announced in the Notification, this notification shall come into effect on the date of its publication in the Official Gazette.

[UPDATE 19th June 2015: MCA uploaded copy of Official Gazette dated 5th June 2015, in which this Notification is published. Meaning that; These exemption came into force from that date]

The Notification is issued in exercise of power conferred by Clauses (a) and (b) of Sub – section (1) and sub – section (2) of 462 of the Companies Act, 2013. A copy of this notification has been laid in draft before both Houses of Parliament as required by sub-section (2) of section 462 of the Companies Act, 2013.

Paragraph 2 of the Notification cast a condition on the Government Companies:

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

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EXEMPTION TO NON PROFIT COMPANIES

Posted on June 10, 2015 | 2 comments

On 5th June 2015, Ministry of Corporate Affairs posted here a draft notification to be published in Official Gazette announcing some exemption to Not for profit Companies.

As there is no effective date is announced in the Notification, this notification shall come into effect on the date of its publication in the Official Gazette.

[UPDATE 19th June 2015: MCA uploaded copy of Official Gazette dated 5th June 2015, in which this Notification is published. Meaning that; These exemption came into force from that date.]

The Notification is issued in exercise of power conferred by Clauses (a) and (b) of Sub – section (1) and sub – section (2) of 462 read with Section 8 of the Companies Act, 2013. A copy of this notification has been laid in draft before both Houses of Parliament as required by sub-section (2) of section 462 of the Companies Act, 2013.

Paragraph 2 of the Notification cast a condition on the Not for Profit Companies:

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

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EXEMPTION TO NIDHI COMPANIES

Posted on June 9, 2015 | 3 comments

On 5th June 2015, Ministry of Corporate Affairs posted here a draft notification to be published in Official Gazette announcing some exemption to Nidhi Companies.

As there is no effective date is announced in the Notification, this notification shall come into effect on the date of its publication in the Official Gazette.

[UPDATE 19th June 2015: MCA uploaded copy of Official Gazette dated 5th June 2015, in which this Notification is published. Meaning that; These exemption came into force from that date.]

The Notification is issued in exercise of power conferred by Clauses (a) and (b) of Sub – section 462 read with Section 406 of the Companies Act, 2013. A copy of this notification has been laid in draft before both Houses of Parliament as required by sub-section (2) of section 462 of the Companies Act, 2013.

Paragraph 2 of the Notification cast a condition on the Nidhi Companies:

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

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Commencement of Business Suspended

Posted on June 8, 2015 | 2 comments

Yes, you rightly read. Commencement of business suspended. One of fellow professional colleague told me with exclamation!!

Ministry of Corporate affairs few days ago announced about launch of updated versions of few forms including Form INC – 21 which is a declaration required to be filed before commencement of business or exercising borrowing powers. But suddenly stakeholders found that while updated version of all other forms is there, there was no Form INC – 21 on the portal.

A statement issued just said that due to deletion of Section 11 of the Companies Act, 2013 by relevant section of the Companies (Amendment) Act, 2015, which came into force on or before there is no requirement of Form INC – 21 remain. Earlier, the companies (Incorporation) Second Amendment Rules 2015 were also notified.  The Form was removed from MCA 21 Portal on date 4th June 2015. By virtue of commencement of the Companies (Amendment) Act, 2015, this date legally is 29th May 2015.

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Posted in Chapter II - CA2013, Companies Act 2013

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WHAT IS IN DISPLAY OF NAMES

Posted on June 7, 2015 | 1 comment

What is in name? Everyone had said it sometimes in life. Here, I am discussing what is in display of name.

Every professional practicing Corporate Law, selecting a name is rather a complex issue. When promoters select name for proposed company or a company try to change its name, there is complex rules. Rule 8 of the Companies (Incorporation) Rules, 2014 list undesirable names.  Thereafter, a promoters or company, as the case may be, have to reserve selected name before further steps. All these are not within scope of this post.

Noun Object Private Limited (OPC)

Recently, when Registrar of Companies issued a Certificate of Incorporation for a One Person Company. A question was raised whether name as appeared on Certificate is correct and proper or not? How company will present this name to public, as it appear on certificate or in some other manner.

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Posted in Chapter II - CA2013, Companies Act 2013

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YEAR’S SECOND AMENDMENT IN REGISTRATION OFFICES AND FEES RULES

Posted on June 6, 2015 | 1 comment

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.

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Posted in Chapter VI - CA2013, Chapter XXIV - CA2013, Companies Act 2013

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YEAR’S SECOND AMENDMENT IN DIVIDEND RULES

Posted on June 5, 2015 | 5 comments

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.”

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

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AMENDMENT IN CHARGES RULES

Posted on June 4, 2015 | 1 comment

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;

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

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YEAR’S SECOND AMENDMENT IN SHARE CAPITAL RULES

Posted on June 3, 2015 | 1 comment

The Ministry of Corporate Affairs placed here on its website a draft of the Companies (Share Capital and Debentures) 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 Rule 5(3) of the Companies (Share Capital and Debentures) Rules, 2014. Earlier this sub – rule was amended in 18th March 2015 by the Companies (Share Capital and Debentures) Amendment Rules, 2015. Before comment, I read this copy of amended Rule 5(3), with amendment by this amendment rule in bold letters:

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

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YEAR’S SECOND AMENDMENT IN INCORPORATION RULES

Posted on June 2, 2015 | 4 comments

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:

  1. Insert a proviso in Rule 12 of principal Rules,
  2. Omit Rule 24 of the Principal Rules,
  3. Substitute Form INC – 13 and INC – 16 with new Forms, and
  4. Omit form INC – 21.

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:

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

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Part of Companies Amendment Act became Effective

Posted on June 1, 2015 | 5 comments

A draft notification posted here on website of Ministry of Corporate Affairs says that Section 1 to 12 and Section 15 to 23 of the Companies (Amendment) Act, 2015 came into force with effect from 29th May 2015. The official language of notification read, “the Central Government hereby appoints the 296 May, 2015 as the date on which the provisions of sections 1 to 12 and 15 to 23 of the said Act shall come into force.” The Amendment Act was got presidential assent and notified by Ministry of Law and Justice as such on 26th May 2015 in official gazette.

Two sections not notified yet deals with Fraud Reporting Procedure [Section 13 amending Section 143 of Principal Act] and Related Party Transactions [Section 14 amending Section 177 of Principal Act]. This is understood that Rules related to these sections are in drafting process.

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Posted in Chapter I - CA2013, Chapter IX - CA2013, Chapter X - CA2013, Chapter XIX -CA2013, chapter XVI - CA2013, Chapter XX - CA2013, Chapter XXI - CA2013, Chapter XXII - CA2013, Chapter XXIII - CA2013, Chapter XXIX - CA2013, CHAPTER XXVI - CA2013, Chapter XXVII - CA2013, Chapter XXVIII - CA2013, Companies Act 2013, Governance and Responsibility

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Decoding Secretarial Standards – Convening a Meeting

Posted on May 29, 2015 | Leave a comment

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;

  • Any Director of a company may, at any time, summon a Meeting of the Board, and
  • the Company Secretary or where there is no Company Secretary any person authorised by the Board in this behalf, on the requisition of a Director, shall

convene a Meeting of the Board, in consultation with

  1. the Chairman or
  2. in his absence, the Managing Director or
  3. in his absence, the Whole-time Director, where there is any,

unless otherwise provided in the Articles.

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Posted in Chapter VII – CA2013, Chapter XIII - CA2013, Companies Act 2013, Company Secretary, CorpGov, Governance and Responsibility, Secretarial Standards

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Decoding Secretarial Standards – Scope and Definitions

Posted on May 26, 2015 | 3 comments

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.

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Posted in Chapter VII – CA2013, Chapter XIII - CA2013, Companies Act 2013, Company Secretary, CorpGov, Governance and Responsibility, Secretarial Standards

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Internal Auditor

Posted on May 22, 2015 | 5 comments

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.”

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

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TECHNICAL FAULT IN ISSUANCE OF SECRETARIAL STANDARD

Posted on May 19, 2015 | 23 comments

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).

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Posted in Chapter VII – CA2013, Chapter XIII - CA2013, Companies Act 2013, Company Secretary, Secretarial Standards

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Supreme Court NCLT Decision dated 14th May 2015

Posted on May 15, 2015 | 1 comment

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.

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

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FINANCIAL STATEMENT TO MEMBERS AND PUBLIC

Posted on May 12, 2015 | 3 comments

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)]

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

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UNEASE OF INTEGRATED INCORPORATION

Posted on May 8, 2015 | 1 comment

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

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

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Amended Form INC – 7 (W.E.F. 1 May 2015)

Posted on May 7, 2015 | 1 comment

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.

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Posted in Chapter II - CA2013, Companies Act 2013

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Amended Form INC – 22 (W.E.F. 1 May 2015)

Posted on May 6, 2015 | 8 comments

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.

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Posted in Chapter II - CA2013, Companies Act 2013

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