Entries Tagged 'Company Law' ↓

Key Highlights of Companies Bill, 2013

  1. —  Uniform Financial Year for all the Companies i.e from April to March. (Exception where in approval from the National Company Law Tribunal have been granted).
  2. —   A Private Company can now have maximum of 200 members.
  3. —   Concept of One person Company have been introduced. (But the Company can only be incorporated as a Private Company).
  4. —   Object Clause of Memorandum of Association need not be divided into Main, Ancillary and Other Objects Clause.
  5. —   All types of securities are governed by Bill.
  6. —   The money raised by the Company through prospectus, cannot be used for any other purpose other than the purpose for which it was raised unless a special resolution have been passed and the said proposal is published by way of an advertisement. Otherwise an exit opportunity shall be provided to the existing shareholders of the Company.
  7. —  The prospectus has to be more detailed.
  8. —  If a Company, listed or unlisted, makes an offer to allot or invites subscription, or allots, or enters into an agreement to allot, securities to 50 or such higher number as may be prescribed, whether the payment for the securities has been received or not or whether the Company intends to list its securities or not on any recognized stock exchange in or outside India, the same shall be deemed to be an offer to the public and shall accordingly be governed by the provisions provided in this regard by the Securities And Exchange Board of India(SEBI). 
  9. —   There is no provision for issue of shares at a discount (other than issue of Sweat Equity Shares).
  10. —  The provisions of clause related to further issue of capital will now be applicable to all type of companies.
  11. —   Apart from existing shareholders, if the Company having share capital at any time proposes to increase its subscribed capital by issue of further shares, such shares may also be offered to employees by way of ESOP, subject to the approval of shareholders by way of Special Resolution. 
  12. —  Buyback provisions eased. Companies can buy back its shares even if it has defaulted in repayment of deposit or interest payable thereon, redemption of debentures or preference shares or payment of dividend to any shareholder or repayment of any term loan or interest payable thereon to any financial institution or bank, provided that such default has been remedied and three years have lapsed after such default ceased to subsist.  
  13. —  NBFCs not to be covered by the provisions relating to acceptance of deposits. They will be governed by the Reserve Bank of India rules on acceptance of deposits.
  14. —   Companies can accept deposits only from its members after seeking permission of its shareholders at a general meeting.  
  15. —  Certain public companies, as prescribed, can accept deposits from persons other than its members, subject to conditions such as credit rating.
  16. —   Bill provides for registering of all types of charges.
  17. —   Certification of Annual Return by practicing company secretary mandatory in case of companies with prescribed paid up capital and turnover.
  18. —   First annual general meeting of a company shall be held within nine months from the closure of its first financial year .
  19. —  Postal Ballot to be applicable on all Companies, whether listed or not.
  20. —  Every company has to follow the Secretarial Standards while preparing the minutes of board and general meeting.
  21. —   Listed companies required to file a return in a prescribed form with the Registrar regarding any change in the number of shares held by promoters and top 10 shareholders of such company, within 15 days of such change.
  22. —   Listed public companies to prepare a report, in the manner as may be prescribed, on each annual general meeting including the confirmation that meeting was convened, held and conducted as per the Act and the Rules made thereunder.
  23. —  Interim dividend declared by a Company in a current financial cannot exceed the average rate of dividend of the preceding three years if a company has incurred loss up to the end of the quarter immediately preceding the declaration of such dividend.
  24. —   Transferring of a fixed percentage of profits to reserve before declaration of dividend is not mandatory in the Bill.
  25. —   Financial Statements shall include Balance Sheet, Profit & Loss Account and Cash Flow Statement collectively.
  26. —   Provisions for re-opening or re-casting of the books of accounts of a company provided.
  27. —  The National Advisory Committee on Accounting Standards renamed as The National Financial Reporting Authority.
  28. —  The authority to advise on Auditing Standards and Accounting Standards.
  29. —  Every company is required at its first annual general meeting (AGM) to appoint an individual or a firm as an auditor. The auditor shall hold office from the conclusion of that meeting till the conclusion of its sixth AGM and thereafter till the conclusion of every sixth meeting. The appointment of the auditor is to be ratified at every AGM.
  30. —  Individual auditors are to be compulsorily rotated every 5 years and audit firm every 10 years in listed companies & certain other classes of companies, as may be prescribed.
  31. —   Prescribed class or classes of companies to have atleast one woman director.
  32. —   At least one director should be a person who has stayed in India for a total period of not less than 182 days in the previous calendar year.
  33. —  At least one-third of the total number of directors of a listed public company should be independent directors. Existing companies to get a transition period of one year to comply.
  34. —   Companies can have maximum of 15 directors.
  35. —  A person can hold directorship of up to 20 companies, of which not more than 10 can be public companies. The number 20 to include Private Companies aswell.
  36. —   A director can participate in a board meeting through video conferencing or other audio visual mode as may be prescribed.
  37. —  A notice of not less than 7 days in writing is required to call a board meeting. The notice of meeting to be given to all directors, whether he is in India or outside India by hand delivery post or electronic means.
  38. —   Every company with more than 1,000 shareholders, debenture-holders, deposit-holders and any other security holders at any time during a financial year shall constitute a Stakeholders Relationship Committee consisting of a chairperson who is a non-executive director and such other members as may be decided by the board.
  39. —  In a private company, an interested director cannot vote or take part in the discussion relating to any matter in which he is interested.
  40. —  The provisions related to inter-corporate loans and investments (section 372A of Companies Act, 1956) has been extended to include loans and investments to any person. 
  41. —  Loans can be given to a Director without seeking permission of the Central Government.
  42. —   No central government approval required for entering into any related party transactions.
  43. —   No approval of the central government required for appointment of any director or any other person to any office or place of profit in the company or its subsidiary.
  44. —  The Bill prohibits insider trading in the company. 
  45. —  The Bill provides provisions related to Corporate Social Responsibility (CSR).
  46. —  Provisions relating to the appointment of managing director/whole time director/manger to apply to a private company.
  47. —   The Bill provides for provision related to secretarial audit in certain prescribed class or classes of companies.
  48. —  The Bill prescribes the functions of a company secretary.
  49. —   The conditions under which the Registrar can remove the name of a company from his record have been changed.
  50. —  The Registrar of Companies has been empowered to file an application with the Tribunal for restoration of the name of a company where the company was struck off inadvertently or on the basis of the incorrect information.
  51. —  The manner of declaring a company sick and process of its revival and rehabilitation has been completely rationalized.
  52. —   Any document or returns required to be filed under this Bill, if not filed within prescribed time, have to be filed within a period of 270 days on payment of such additional fees as may be prescribed.
  53. —   New definition of Nidhi Company prescribed.
  54. —   The person to be appointed as President of the Tribunal shall be the judge of the High Court for atleast 5 years, as opposed to the Companies Act 1956, where no term has been prescribed for High Court Judge to be appointed as President; the only condition was that the person should be qualified for being a judge of high court.
  55. —  The National Company Law Appellate Tribunal shall now consist of a combination of technical and judicial members not exceeding 11, instead of 2 as provided in the Companies Act 1956.
  56. —  The Bill makes provision for cross border amalgamations between Indian companies and companies incorporated in the jurisdictions of such countries as may be notified from time to time by the central government.

http://www.mukeshraj.com

 

PHONE NUMBERS OF DIN CELL AND HELP DESK

Stakeholders are hereby informed that operator for MCA21 project is changing w.e.f. 17.01.2013 from M/s. TCS Ltd to M/s. Infosys Ltd. Due to this the new contact numbers for DIN Cell and Help desk will be:

DIN Cell    : 0124-4583766 – 69

Help Desk    : 0124-4832500

RBI liberalises Forex Facilities for Individuals

The Reserve Bank of India has further liberalised foreign exchange facilities for individuals under the Foreign Exchange Management Act, (FEMA) 1999. The facilities are:
1. NRIs can be Joint Holders in Resident’s SB/EEFC/RFC Accounts
Individual residents in India are now permitted to include non-resident close relative(s) as joint holder(s) in their resident bank accounts, namely, savings(SB), Exporter Earners’ Foreign Currency (EEFC) and Residents’ Foreign Currency (RFC) accounts, on ‘former or survivor’ basis.
2. Residents can be Joint Holders in NRE/FCNR Accounts
Non-Resident Indians (NRIs)/ Person of Indian Origin (PIO) , are now permitted to open Non-Resident (External) (NRE) Rupee Account Scheme/Foreign Currency (Non-Resident) (FCNR) Account (Banks) Scheme with their resident close relative(s) as joint holder(s) on ‘former or survivor’ basis.
3. Residents can gift Shares/Debentures upto USD 50,000 Value
A person resident in India can now give to a person resident outside India, by way of gift, any security/shares/debentures of value upto USD 50,000 in value per financial year subject to certain conditions. Earlier, a person resident in India could give to a person resident outside India, by way of gift, any security/shares/debentures of value upto USD 25,000 per calendar year.
4. Sale Proceeds of FDIs can be credited to NRE/FCNR (B) Account
Sale proceeds of Foreign Direct Investment (FDI) can be credited to Non-Resident (External) Rupee (NRE) Account Scheme/Foreign Currency (Non-Resident) Account FCNR (Banks) Scheme provided the original acquisition was by way of inward remittance or funds held in their NRE/FCNR (B) accounts.
5. Gifts to NRIs can be credited to NRO Accounts in Rupees
Resident individuals are now permitted to make rupee gifts within the overall limit of USD 200,000 per financial year as permitted under the Liberalised Remittance Scheme (LRS) to an NRI/PIO who is a close relative by way of crossed cheque/electronic transfer to the Non-Resident (Ordinary) Rupee Account (NRO) of the NRI/PIO. 2
6. Loans to NRI Close Relatives can be given in Rupees
Similarly, Resident individuals are now permitted to lend in Rupees within the overall limit under the Liberalised Remittance Scheme of USD 200,000 per financial year to a Non Resident Indian (NRI)/ Person of Indian Origin (PIO) close relative by way of crossed cheque/electronic transfer, subject to certain conditions.
7. Residents can repay the loans given to NRI Close Relatives
Resident individuals are now granted general permission to repay loans availed of in Rupees from banks in India by their NRI close relatives. Earlier, repayment of loans by close relative in respect of Rupee loan availed by NRIs was restricted only to housing loans.
8. Residents can bear Medical Expenses of NRIs
Residents will now be allowed to bear the medical expenses of visiting NRIs/PIOs close relatives. Earlier, residents were allowed to make payment in rupees towards meeting expenses on account of boarding, lodging and services related to it or travel to and from and within India of a person resident outside India and who is on a visit to India.

Press Release : 2011-2012/455

Company Law Settlement Scheme 2011

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Extension of Time limit for XBRL filing

Ministry of Corporate Affiars has increase the time limit for filing of Blance sheet and Profit & Loss account in XBRL format for all companies in Phase-I to 30-11-2011 or 60 days from their due date which ever is later.

Simplified procedure for rectification of register of charges under section 141 of the Companies Act

General Circ ular No. 51 / 2011

F.No. 1/ 1/ 2003 CL.V

Government of India

Ministry of Corporate Affairs

5th Floor, A Wing, Shastri Bhavan,

Dr. R.P. Road, New Delhi

Dated 25th July, 2011

All Regional Direc tors,

All Registrar of Companies,

All Stakeholders.

 

Sub: Simplified procedure for rectification of register of charges under section 141 of the Companies Act, 1956.

Sir,

In order to simplify the procedures and cut timelines, the Ministry has decided to notify section 20 of the Companies (Second Amendment) Ac t, 2002

(1) of 2003 thereby the work relating to rectification of register of charges under section 141 of the Companies Ac t, 1956 shall be shifted from the jurisdiction of Company Law Board to the Central Government.

2. It has further been decided to delegate this work to the respective Registrar of Companies under whose jurisdiction the registered office of the company is situated. The petitions filed with the Company Law Board and pending as on the effective date of notification shall be transferred to respective Registrar of Companies.

3. The revised e-forms and business re-engineering process under MCA-21 system is being developed and the simplified procedures to be followed by the companies and Registrar of Companies shall be given in the modified eforms and instruction kit thereto shortly.

4. It is expected that on discharging of these functions by the respective Registrar of Companies on implementation of simplified procedures, the cost and the time to get condonation under section 141 of the Companies Ac t, 1956 shall be reduced.

5. The above simplified process is likely to be implemented with effect from 24th

September, 2011.

Yours faithfully,

-sd-

(Kamna Sharma)

Assistant Director

Simplified procedure for obtaining online approval of Central Government under section 297 of the Companies Act

General Circular No. 52/2011

F.No. 17/170/2011 CL.V

Government of India

Ministry of Corporate Affairs

CL V Section

5th Floor, A Wing, Shastri Bhavan,

Dr. R.P. Road, New Delhi

Dated 25th July, 2011

All Regional Directors,

All Registrar of Companies,

All Stakeholders.

 

Sub : Simplified procedure for obtaining online approval of Central Government under section 297 of the Companies Act, 1956.

Sir,

The Ministry of Corporate Affairs has been receiving representations form various stakeholders to simplify the approval processes under section 297 of the Companies Act, 1956. In order to cut timelines in giving approval, the Ministry has decided to simplify the procedures and to give approval online, if the proposed contract has been approved by the shareholders by way of special resolutions in a general meeting.

2. According to new procedure, application will be made in a new e-form with the prescribed fee. The relevant information like terms of contract and details of Board resolutions and special resolutions shall be captured in the e-form. The e-form shall also be certified by the practicing professional who shall specifically certify the correctness of the information and declarations given by the company in the e-form.

3. The company while seeking approval of the directors and shareholders in their meetings shall specifically take approval to the effect that: —

(i) Proposed contract is competitive, at an arm’s length, without conflict of interest and is not less advantageous to it as compared to similar contracts with other parties.

(ii) The company has not made any default in repayment of any of its debts (including public deposits) or debentures or interest payable thereon and has filed its upto date Balance Sheets and Annual Returns with the Registrar of Companies;

(iii) The proposed contract is falling within the provisions of section 297 of the Act and provisions of sections 198, 269, 309, 314 and 295 are not applicable in the proposed contract.

(iv) The company and its Directors have complied with the provisions of sections 173, 287, 299, 300, 301 and other applicable provisions of the Companies Act, 1956 with regard to the proposed contract.

4. The application will be processed online and approval of Central Government shall also be made available to the applicant company online on the basis of declarations made by the company and certifications by the professionals given in the e-form.

5. If any of the information or declaration given by the company or certificate given by the professional in the e-form is found to be wrong, then the applicant company, its Directors and professional shall be liable for penal action under section 297 and 628 of the Companies Act, 1956 in addition to penal action prescribed in regulations of the respective professional institutes.

6. The process of online approval of Central Government under section 297 of the Companies Act, 1956 is likely to be implemented with effect from 24th September, 2011.

Yours faithfully,

-sd-

(Kamna Sharma)

Copy to: Assistant Director

1. All concerned

2. PS to CAM and PS to MOS

3. PPS to Secretary, Additional Secretary, Joint Secretaries

Process of incorporation of Companies and establishment of principal place of business in India by Foreign Companies – Procedure simplified

The Ministry has got the issue examined by Business Process Re-engineering Group under MCA-21 and in order to speed up and simplify the process of incorporation of Companies and establishment of principal place of business in India by Foreign Companies for reduction in time taken by Registrar of Companies, the below mentioned procedure have been recommended :

1.Only Form-1 shall be approved by the RoC Office. Form 18 and 32 shall be processed by the system online.

2.There shall be one more category, i.e., Incorporation Forms ( Form 1A, Form 37, 39, 44 and 68) which will have the highest priority for approval.

3.Average time taken for incorporation of company should be reduced to one (1) day only.

4.A Notification to notify minor changes in e-forms 18 and 32 to enable them to be taken on record through STP mode for aforesaid procedure is being issued separately.

 

 

ROC EASY EXIT SCHEME, 2011

The Ministry of Corporate Affairs, Government of India, has re-launched “Easy Exit Scheme-2011 (herein after called EES)” giving an opportunity to “Defunct Companies” to get their name strike off from the register of Companies. The said scheme has been notified vide circular No.6/2010. Further, the said scheme will be effective from 1st January, 2011 to 31st January, 2011.

Pursuant to EES, Companies which are inoperative since incorporation or commenced business after incorporation but later on became inoperative are eligible for said scheme. Such Companies will be termed as “Defunct Companies”. As per definition of EES, Defunct Companies are Companies, which has an active status at MCA portal and:-

1. Which are not carrying on any business or not in operation on or after 1st April, 2008; or

2. Which did not raise their minimum paid up Capital i.e. Rs. 1,00,000/- or Rs. 5,00,000/-.

Non-applicability of said Scheme: – The Scheme does not cover the following companies:-

  • Listed companies;
  • Companies that have been de-listed,
  • Companies registered under section 25 of the Companies Act,1956;
  • Vanishing companies;
  • Companies where inspection or investigation is ordered and being carried out or yet to be taken up or where completed prosecutions arising out of such inspection or investigation are pending in the court;
  • Companies where order under section 234 of the Companies Act, 1956 has been issued by the Registrar and reply thereto is pending or where prosecution if any, is pending in the court;
  • Companies against which prosecution for a non-compoundable offence is pending in court;
  • Companies accepted public deposits which are either outstanding or the company is in default in repayment of the same;
  • Company having secured loan ;
  • Company having management dispute;
  • Company in respect of which filing of documents have been stayed by court or Company Law Board (CLB) or Central Government or any other competent authority;
  • Company having dues towards income tax or sales tax or central excise or banks and financial institutions or any other Central Government or State Government Departments or authorities or any local authorities.

Documents required for submission of an application: – To submit an application with Registrar of Companies, Ministry of Corporate Affairs, Government of India, following documents are required:

  • A certified true copy of Board Resolution
  • A declaration from Directors about pending litigation, involving Company
  • An affidavit, each form existing Directors, duly notarized
  • An indemnity bond, each from existing Directors
  • A Statement of Accounts as on date, duly certified by Chartered Accountants in Practice;
  • A Form EES, 2011, duly signed, manually, by Director (If there is no Digital Signature of Director)

Note: – The aforesaid documents are compulsory and other documents may be required on case to case basis.

Fee payable to Ministry of Corporate Affairs:-

A fee of Rs. 3,000/- (Rupees Three Thousand) is to be paid to Registrar of Companies, Ministry of Corporate Affairs, Government of India. The same could be paid though Cash/ Credit Card/Net Banking/ Cheque/ Bank Draft.

Announcement of New USA Branch of MRC

We are delighted to inform you that Mukesh Raj & Co. (MRC) has inagurated its first foreign branch office at New Jersey, United States Of America. The new foreign office address is:

MRC (Chartered Accountants) 85, Forest Drive, Apartment C Springfield,

New Jersey – 07081, United States of America (USA)

We would concentrate to provide services in relation to US taxation and Accounting. We would be happy to assist you and your team members to provide our professional and IRS services from our USA office.

Warm Regards MRC Team