Tag Archives: The Companies (Management and Administration) Rules 2014

Curious case of Rule 20 of Management and Administration Rules


This blog post has a poll on a question – Whether Explanations to Rule 20, placed just after sub – Rule (2) are still part of Rule 20? Read and take part in the poll.

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MGT – 7 (v. 17Nov2015)


We live in a changing world; corporate world changing fast and Indian Corporate Law fastest. A draft of the Companies (Management and Administration) third Amendment Rules, 2015 dated 16th November 2015, which is pending for publication in Official Gazette of India amend the version of form MGT -7 once again. Though these amendment rules are not available in official gazette, new version of form MGT – 7 is made available on the MCA21 portal for filing.

Note: MGT – 7 Version 17th November 2015 is being used for writing this post. Earlier posts here and here are only historic relevance now.

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MGT – 7 (v. 30Sept2015)


Recent amendment to the Companies (Management and Administration) Second Amendment Rules 2015 dated 28th August 2015 published in Official Gazette on 31st August 2015 which came into force with effect from 31st August 2015 by virtue of its Rule 1(2) replaced the Form MGT – 7 meant for Annual Return of companies. The Form MGT – 7 was released on 25th September 2015 another amendment rules to justify content of this form.

Note: MGT – 7 Version 30th September 2015 is being used for writing this post. The post is long one but to avoid confusion, i opted not to split this post. Readers may read in parts.

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E – Voting Rules 2015


Indian E – voting Rules were under criticism from various quarters of corporate world since. Their application has been postponed some point of time. Now, the Rule 20 of the Companies (Management and Administration) Rules 2014 has been substituted by the Companies (Management and administration) amendment Rules, 2015. We have discussed, original Rules related voting through electronic Means earlier here.

These rules will come into force from the date of publication of these rules in official gazette i.e.

Applicability:

The provisions of this rule shall apply in respect of the general meetings for which notices are issued on or after the dale of commencement of this rule. [Rule 20(1)]

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REPORT ON ANNUAL GENERAL MEETING


This is new feature of Indian Corporate Law. Section 121 of the companies Act 2013 simply says that every listed public company shall prepare a report on each annual general meeting including the confirmation to the effect that the meeting was convened, held and conducted as per the provisions of this Act and the rules made there under. The company shall file with the Registrar a copy of the report within thirty days of the conclusion of the annual general meeting.

Rule 31 of the Companies (Management and Administration) Rules 2014 goes into details.

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POSSIBILITY OF PROXY


[This is my write up published in July 2014 edition of eMagazine of Mysore Chapter of Institute of Company Secretaries of India
Download here: 126 ICSI Mysore eMagazine July 2014]

Section 105(2) of the Companies Act, 2013 says in every notice calling a meeting of a company, there shall appear with reasonable prominence a statement that member entitled to appoint a proxy and a proxy need not be a member. Prominent question on ‘proxy’ is where the institution of proxies stands under new corporate law regime.

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MGT – 14


Filing of Resolutions and agreements to the Registrar
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MGT – 6


Persons not holding beneficial interest in shares  Continue reading

RECORDS IN ELECTRONIC FORM


Section 120 of the Companies Act 2013 lay down provision for maintenance and inspection of documents in electronic form. This is permitted that any document, record, register, minute etc may be kept in electronic form. The record so kept may be inspected in electronic form. The copy may also be furnished in electronic form.

MAINTENANCE AND INSPECTION OF DOCUMENT IN ELECTRONIC FORM:

Every listed company or a company having not less than one thousand shareholders, debenture holders and other security holders, shall maintain its records, as required to be maintained under the Act or rules made there under, in electronic form. In case of existing companies, data shall be converted from physical mode to electronic mode within six months from the date of notification of provisions of section 120 of the Act. [Rule 27(1)]

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MINUTES


Earlier I wrote a long post on Resolution and Minutes under the Companies Act 2013. The Companies (Management and Administration) Rules 2014 supplement these provisions of the Act.

Rule 25 deals with minutes of proceedings of general meeting, meeting of Board of Directors and other meetings and resolutions passed by postal ballot.

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RESOLUTIONS AND AGREEMENTS TO BE FILED


There are certain resolution and agreement which are important to have a public notice. Section 117 of the Companies Act lay downs provisions.

A copy of every resolution and agreement in respect of certain matters together with the explanatory statement annexed to the notice calling the meeting shall be filed with the Registrar with thirty days of passing or making.

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SPECIAL NOTICE


Section 115 of the Companies Act 2013 requires certain business to be transacted in general meeting only after a special notice of the resolution.

There are certain businesses under the Act and may be some additional businesses in the articles of the company, which requires special notice for resolution. The notice of the intention to move such resolution shall be given to the company by prescribed number of members holding not less than one percent voting power or holding shares of paid – up value of five lakh rupees. On receipt of such notice from these members, the company shall give notice in prescribed manner to its members.

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POSTAL BALLOT


Section 110 of the Companies Act, 2013 creates legal backing for postal ballot.

A company shall transact businesses notified by Central Government through postal ballot only not in general meeting.

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Scrutiny of Poll Process


Section 109 of the Companies Act 2013 deals with provisions related to demand for Poll in a general meeting.

Where a poll is to be taken, the chairman of the meeting shall appoint necessary number of person to scrutinise the poll process and vote given on the poll and to report thereon. [Section 109(5)]

Rule 21 of the Companies (Management and Administration) Rules 2014 deals with “manner in which the Chairman of meeting shall get the poll process scrutinised and report thereon”.

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VOTING THROUGH ELECTRONIC MEANS


The Central Government got freehand under Section 108 of the Companies Act, 2013 which simply reads, “The Central Government may prescribe the class or classes of companies and manner in which a member may exercise his right to vote by the electronic means.”

The Rule 20 of the Companies (Management and Administration) Rules 2014 has all power to administer voting through electronic means.

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PROXIES


Section 105 of the Companies Act 2013 frames law regarding proxies. We have Rule 19 of the Companies (Management and Administration) Rules 2014 to supplement provisions relating to proxies.

Any member of a company entitled to attend and vote at a meeting of the company shall be entitled to appoint another person as a proxy to attend and vote at the meeting on his behalf. [Section 105(1)]

A member of a company registered under section 8 shall not be entitled to appoint any other person as his proxy unless such other person is also a member of such company. [Rule 19(1)]

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NOTICE OF THE MEETING


According to Section 101 of the Companies Act, 2013 a General meeting of a company may be called by giving not less than clear twenty – one days’ notice either in writing (i.e. in paper form) or through electronic mode.

If consent is given in writing or by electronic mode by not less than ninety – five percent of members entitled to vote at such meeting, a general meeting may be called after giving a notice of a shorter period, which is called shorter notice (not short in contents but time period). [Section 101(1)]

Rule 18 of the Companies (Management and Administration) Rules 2014 explains provisions related to notice through electronic mode.

A company may give notice through electronic mode. The expression ‘‘electronic mode’’ shall mean any communication sent by a company through its authorized and secured computer programme which is capable of producing confirmation and keeping record of such communication addressed to the person entitled to receive such communication at the last electronic mail address provided by the member. [Rule 18(1)]

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EXTRAORDINARY GENERAL MEETING BY REQUISTIONISTS


Section 100 of the Companies Act, 2013 lay down law related to Extra – ordinary general meeting called on requisition of members. Rule 17 of the Companies (Management and Administration) Rules 2014 supplements provisions of Section 100 of the Act.

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PRESERVATION, INSPECTION AND COPY OF REGISTERS AND RETURNS


 Section 94 of the Companies Act, 2013 prescribes the registers and their indices and the copies of all the returns shall be open for inspection by any member, debenture-holder, other security holder or beneficial owner, during business hours without payment of any fees and by any other person on payment of fees.

Rule 14 of the Companies (Management and Administration) Rules 2014 deals in detail. The registers and indices maintained pursuant to section 88 and copies of returns prepared pursuant to section 92, shall be open for inspection during business hours, at reasonable time on every working day as the board may decide, by any member, debenture holder, other security holder or beneficial owner without payment of fee. The reasonable time is a period of not less than two hours on every working day shall be considered by the company.

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RETURN OF CHANGES IN SHAREHOLDINGS


{Update: After passing the Companies Amendment Act, 2017, with effect from 14th June 2018 Section 93 of the Companies Act, 2013 and corresponding Rule 13 of the Companies (Management and Administration) Rules 2014, along with its Form MGT – 10 was omitted. These omitted provisions were in force from 1st April 2014 to 13th June 2018.}

According to Section 93 of the Companies Act, 2013, every listed company shall file a return with the Registrar with respect to change in the number of shares held by promoters and top ten shareholders of such company, within fifteen days of the change.

According to Rule 13 of the Companies (Management and Administration) Rules 2014, Every listed company shall file with the Registrar, a return in Form MGT – 10 along with the fee with respect to changes relating to either increase or decrease of two percent or more in the shareholding position of promoters and top ten shareholders of the company in each case, either value or volume of the shares, within fifteen days of such change.

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