Rules
1.
Companies
(Incorporation) Third Amendment Rules, 2016
Dt. July 27, 2016
The Central
Government has amended the Companies (Incorporation) Rules 2014 and the
Companies (Incorporation) Amendment Rules 2014.
Applicability:
To all companies
Crux of the Rules:
Through
these rules the Central Government has made the following amendments to the
Companies (Incorporation) Rules 2014.
a. Replacing/
substituting the following current rules
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Sr No
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Rule No.
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Existing
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Replaced/ substituted with
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1
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3 (2)
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No person shall be eligible to
incorporate more than a One Person Company or become nominee in more than one
such company.
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A natural person shall not be member of more than a One Person
Company at any point of time and the said person shall not be a nominee of
more than a one Person Company
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2
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8 (2)(ii)
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it includes the name of a
registered trade mark or a trade mark which is subject of an application for
registration, unless the consent of the owner or applicant for registration,
of the trade mark, as the case may be, has been obtained and produced by the promoters;
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it includes the name of a trade mark registered
or a trade mark which is subject of an application for registration under the Trade Marks Act, 1999 and the
rules framed there under unless the consent of the owner or applicant for
registration, of the trade mark, as the case may be, has been obtained and
produced by the promoters
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3
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8 (6)(n)
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Financial, Corporation and the like;
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Financial Corporation and the like;(Comma omitted)
[Rule 8 (6) clearly specifies the
list of words or expression, the use of which in the name of a company would
require prior approval of the Central Government]
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4
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29 (1)
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The change of name shall not be
allowed to a company which has defaulted in filing its annual returns or
financial statements or any document due for filing with the Registrar or
which has defaulted in repayment of matured deposits or debentures or
interest on deposits or debentures.
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The change of name shall not be allowed to a
company which has not filed annual
returns or financial statements due for filing with the Registrar or which
has failed to pay or repay matured
deposits or debentures or interest thereon:
Provided that the change of name shall be allowed
upon filing necessary documents or payment or repayment of matured deposits
or debentures or interest thereon as the case may be.
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Insertion of the following in the rules
1.
Explanation to Rule 16(1)(m):
Pursuant
to Rule 16 (1)(m),every subscriber at the time of incorporation has to
file their proof of identify with the Registrar. In this regard the Central
Government has provided the following explanation:
“Explanation
- In case the subscriber is
already holding a valid DIN, and the particulars provided therein have been
updated as on the date of application, and the declaration to this effect is
given in the application, the proof of identity and residence need not be
attached.”
2.
Rule 26:
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Rule 26 (1) under the Companies
(Incorporation) Rules 2014 is Rule 26 (2) under the Companies (Incorporation)
Amendment Rules 2016.
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As per this amended Rules, Rule 26 (1) clearly
states that every company which has a website for carrying an ONLINE business or otherwise has to
publish its complete contact details along with its identification details
(name, address of regd. off., ph no, CIN, fax no, email, etc…)
3.
Third proviso in Rule 28 (2)
Prior to shifting of registered office within
the same State, the
company has to publish and service the notices as per Rule 28 (2) (a & b)
not less than 1 month before filing any application with the RD.
In
this regard the following third proviso to Rules 28 (2) has been inserted
“Provided also that on completion
of such inquiry, inspection or investigation as a consequence of which no
prosecution is envisaged or no prosecution is pending, shifting of registered
office shall be allowed."
4.
Rule 30 (1)(j)
While
shifting of registered office from one State or Union territory to another
State, the applicant has to file Form INC. 23 with the Central Government along
with the said documents for their approval. In addition to the existing list
the government has added the following document through this amendment:
Rule
30(1)(j) “a copy of the No Objection Certificate from the Reserve Bank of India
where the applicant is a registered Non-Banking Financial Company”
5.
Explanation to Rule 30 (10)
The following explanation is inserted after the
proviso to Rule 30 (10)
"Explanation.-
On completion of such inquiry, inspection or investigation as a consequence of
which no prosecution is envisaged or no prosecution is pending, shifting of registered
office shall be allowed.".
6.
Rule 37
After the
Rule 36 on the Integrated Process for Incorporation, the following rule is
being inserted.
Rule
37 - A detailed procedure for conversion
of unlimited liability company into a limited liability company by shares or
guarantee.
7. Revision
of form INC 11
Omission of the following rules
1.
Rule 16 (1)(q) shall be omitted.
Pursuant
to this omission, every subscriber at the time of incorporation need not file the
Form No.INC.10
containing the specimen
signature and the latest photograph of the subscribed which is duly verified by
the banker or notary.
2. Rules 16
(2)(g)
The words “or partnership firm” is omitted.
3. Rule 30
(6)( c )
Omission of the words "and to the Securities and
Exchange Board in the case of listed companies"
While shifting of registered office from one State
or Union territory the listed company need not serve a 14 day notice before the
date of hearing to the Securities Exchange Board of India.
4.
Omission of Form INC – 10
Source:
(2)
Companies (Accounts) Amendment Rules, 2016
Dt. July 27, 2016
The Central Government
has amended/ inserted certain provisos, rules and sub rules relating to:
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preparation of consolidated financials,
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matters to be included in the board’s report
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appointment of internal auditors.
Applicability:
To all companies
Crux of the Rules:
Through
these rules the Central Government has made the following amendments to the
Companies (Accounts) Rules, 2014.
a. Replacing/
substituting the following current rules
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Sr No
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Rule No.
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Existing
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Replaced/ substituted with
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1
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8 (1)
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The Board’s Report shall be
prepared based on the stand alone financial statements of the company and the report shall contain a separate
section wherein a report on the performance and financial position of each of
the subsidiaries, associates and joint venture companies included in the
consolidated financial statement is presented.
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The Board’s Report shall be
prepared based on the stand alone financial statements of the company
and shall report on the
highlights of performance of subsidiaries, associates and joint venture
companies and their contribution to the overall performance of the company
during the period under report.
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2.
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13 (1)
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Rule 13 – Companies Required to appoint internal auditors
(1) The following class of companies
shall be required to appoint an internal auditor or a firm of internal auditors, namely
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(1) The following class of companies
shall be required to appoint an internal auditor which
may be either an individual or a partnership firm or a body corporate, namely
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3. New updated,
form AOC 1 has been introduced.
Insertion of the following in the rules
1. Second
proviso to Rule 6
The
following companies have been exempted from the applicability of Rule 6 (Manner
of consolidation of accounts)
a. If it is a
wholly owned or partially owned subsidiary company of another company and all
its members have been intimated in writing and none of them have objected to
the company for not presenting the consolidated financials.
b. Such
unlisted company or the company that is not in the process of listing either in
India or outside India, &
c. Its
ultimate holding company or any intermediate holding company files the
consolidated financials with the registrar.
Source:
(3)
National Company Law Tribunal Rules, 2016 &
National
Company Law Appellate Tribunal Rules, 2016
Dt.
July 21, 2016
The Central
Government has notified the rules related to the functioning of the National
Company Law Tribunal and National Company Law Appellate Tribunal.
Applicability:
To all companies
Crux of the Rules:
The Central
Government has notified the rules related to the functioning of the National
Company Law Tribunal and National Company Law Appellate Tribunal. They broadly
provide the rules for the following:
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Time period fixed by the Tribunal for doing any act
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Forms to be used under various circumstances
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Detailed procedure and the applicable rules on the
functioning of the Tribunal
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Rights, powers and functions of President, Registrar
and Secretary
- Detailed procedure for institution of proceedings,
petitions, appeals, appearance of authorised representatives, etc…
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Procedure on recording and maintenance of proceedings
and registers
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Issuance of orders and disposal of cases
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Procedures in respect of matters earlier dealt by
other quasi judicial bodies, courts and tribunals
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Procedure related to discovery, production and return
of documents
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Examination of witnesses and issue of commissions
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Disposal of cases and pronouncement of orders
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NCLT and NCLAT Orders
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Fee schedule
Source
4.
Companies (Share Capital and Debentures) Third
Amendment Rules, 2016
Dt. July 19, 2016
The
Central Government has amended/ inserted certain provisos, rules and sub rules to
Companies (Share Capital and Debentures) Rules, 2014 and to Companies (Share
Capital and Debentures) Amendment Rules, 2014
Applicability:
To all companies
Crux of the Rules:
Through
these rules the Central Government has made the following amendments to the Companies
(Share Capital and Debentures) Rules, 2014 and to the Companies (Share Capital
and Debentures) Amendment Rules, 2015
Replacing/ substituting the following current rules
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Sr No
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Rule No.
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Existing
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Replaced/ substituted with
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1
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13 (2)(h)
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where convertible securities are
offered on a preferential basis with an option to apply for and get equity
shares allotted, the price of the resultant shares shall be determined before hand on the basis of a valuation
report of a registered valuer and also complied with the provisions of
section 62 of the Act
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where convertible securities are
offered on a preferential basis with an option to apply for and get equity
shares allotted, the price of the resultant shares pursuant to conversion
shall be determined-
(i) either upfront at the time when
the offer of convertible securities is made, on the basis of valuation report
of the registered valuer given at the stage of such offer, or
(ii) at
the time, which shall not be earlier than thirty days to the date when the
holder of convertible security becomes entitled to apply for shares, on the
basis of valuation report of the registered valuer given not earlier than
sixty days of the date when the holder of convertible security becomes
entitled to apply for shares:
Provided
that the company shall take a decision on sub-clauses (i) or (ii) at the time
of offer of convertible security itself and make such disclosure under
sub-clause (v) of clause (d) of sub-rule (2) of this rule.”
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2
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18(1)(b)
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Such an issue of debentures shall
be secured by the creation of a charge, on the properties or assets of the
company, having a value which is sufficient for the due repayment of the
amount of debentures and interest thereon
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Such an issue of debentures shall be secured by
the creation of a charge on the properties or assets of the company or
its subsidiaries or its holding company or its associates companies,
having a value which is sufficient for the due repayment of the amount of
debentures and interest thereon.
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3
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18(1)(d)(i)
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Any specific movable property of the company
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any specific movable property of the company
or its
holding company or subsidiaries or associate companies or otherwise
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4.
Rule
18(7)(b)(ii) & (iii)
The company shall create a Debenture Redemption
Reserve for the purpose of redemption of debentures, in accordance with the
conditions given in rule 18 (7).
In this regard the adequacy for DRR shall be 25% of
the value of outstanding debentures.
Insertion
of the following in the rules
1.
Second proviso to Rule 8 (4)
Provided further that a startup company, as defined
in notification number GSR 180(E) dated 17thFebruary, 2016 issued by
the Department of Industrial Policy and Promotion, Ministry of Commerce and
Industry, Government of India, may issue sweat equity shares not exceeding
fifty percent of its paid up capital upto five years from the date of its
incorporation or registration.”
2.
Proviso to be inserted after Rule 12(1)(c)(ii)
Provided that in case of a startup company, as
defined in notification number GSR 180(E) dated 17thFebruary, 2016
issued by the Department of Industrial Policy and Promotion, Ministry of
Commerce and Industry Government of India, Government of India, the conditions
mentioned in sub-clause (i) and (ii) shall not apply upto five years from the
date of its incorporation or registration.
3.
Rule 15
Notice to
the registrar has to be filed:
a.
When the
share capital of the company is altered
b.
When the
company redeems any preference shares or
c. a company
not having share capital increases number of its members (inserted newly)
4.
Proviso
to Rule 18(7)(b)(iii)
Provided that where a company intends to redeem its
debentures prematurely, it may provide for transfer of such amount in Debenture
Redemption Reserve as is necessary for redemption of such debentures even if it
exceeds the limits specified in this sub-rule.”
Omission
of the following in the rules
1.
Rule 13 (2)(c )
The securities allotted by way of preferential offer shall be made
fully paid up at the time of their allotment.
Source:
5.
Companies (cost records and audit) Amendment Rules,
2016
Dt. July
14, 2016
The
Central Government has amended/ inserted certain provisos, rules and sub rules
to Companies (cost records and
audit) Rules, 2014.
Applicability:
To all companies
Crux of the Rules:
Through
these rules the Central Government has made the following amendments to the Companies (cost records and audit) Rules, 2014
Replacing/ substituting the following current rules
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Sr No
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Rule
No.
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Existing
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Replaced/ substituted with
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1
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2 (d)
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“cost audit report” means the report duly
audited and signed by the cost auditor including attachment, annexure,
qualifications or observations etc. to cost audit report;
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“cost audit report” means the duly signed cost
auditor’s report on the cost records examined and cost statements which are
prepared as per these rules, including attachment, annexure, qualifications
or observations attached with or included in such report;
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2
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6(5)
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Every cost auditor shall forward his report
to the Board of Directors of the company within a period of one hundred
and eighty days from the closure of the
financial year to which the report relates and the Board of Directors shall consider
and examine such report particularly any reservation or qualification
contained therein.
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Every cost auditor shall forward his duly signed
report to the Board of Directors of the company within a period of one
hundred and eighty days from the closure of the financial year to which the
report relates and the Board of Directors shall consider and examine such
report, particularly any reservation or qualification contained therein.
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3
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6(6)
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Every company covered under these rules
shall, within a period of thirty days from the date of receipt of a copy of
the cost audit report, furnish the Central
Government with such report along with full information and explanation on
every reservation or qualification
contained therein, in form CRA-4 along
with fees specified in the Companies
(Registration Offices and Fees) Rules,
2014.
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Every company covered under these rules shall,
within a period of thirty days from the date of receipt of a copy of the cost
audit report, furnish the Central Government with such report along with full
information and explanation on every reservation or qualification contained
therein, in Form CRA-4in Extensible Business
Reporting
Language format in the manner as specified in the Companies (Filing of
Documents and Forms in Extensible Business Reporting language) Rules, 2015 along with fees specified in the Companies
(Registration Offices and Fees) Rules, 2014
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2.
Rule 3 Table A and Table B:
Amending and
substituting the existing table on regulated sectors (Table A) and non –
regulated sectors (Table B).
Insertion of the following in the rules
1.
Rule
4(3)(iii)
(iii) which is engaged in generation of electricity
for captive consumption through Captive Generating Plant. For this purpose, the
term “Captive Generating Plant” shall have the same meaning as assigned in rule
3 of the Electricity Rules, 2005;
2. Proviso
to Rule 6(1)
Provided that before such
appointment is made, the written consent of the cost auditor to such
appointment, and a certificate from him or it, as provided in sub-rule (1A),
shall be obtained
3.
Rule 6 (1)(1A)
Crux of the insertion:
The cost auditor
appointed under sub rule 1 has to submit a certificate that
a.
He/ firm is eligible for being appointed as a cost
auditor
b.
He/ firm satisfies the criteria provided in section
141
c.
The proposed appointment is within the limits laid
down by or under the authority of the act and
d. List
of proceedings including those pending against the cost auditor.
4. Proviso
to Rule 6 (3)
Provided that the cost auditor
appointed under these rules may be removed from his office before the expiry of
his term, through a board resolution after giving a reasonable opportunity of
being and recording the reasons for such removal in writing;
Provided further that the Form
CRA-2 to be filed with the Central Government for intimating appointment of
another cost auditor shall enclose the relevant Board Resolution to the effect;
Provided also that nothing
contained in this sub-rule shall prejudice the right of the cost auditor to
resign from such office of the company.”
5.
Rule 6 (3B)
The cost statements, including
other statements to be annexed to the cost audit report, shall be approved by
the Board of Directors before they are signed on behalf of the Board by any of
the directors authorised by the Board, for submission to the cost auditor to
report thereon
Source:
MCA
Notification
(6.)
Designation of Special Court -Additional Sessions Judge-03,
South-West District, Dwarka
MCA Notification: dated July 27, 2016
Designates
the Court of Additional
Sessions Judge-03, South-West District, Dwarka as Special court.
Applicability:
To all the companies
Crux of the Notification:
For the purposes of providing speedy
trial of offences punishable under the Companies Act, 2013 with imprisonment of
two years or more under the Companies Act, 2013, the Ministry has designated
the Court of Additional Sessions Judge-03, South-West District, Dwarka as
Special court in respect of jurisdiction at the National Capital Territory of Delhi.
Source
(7.)
Applicability of Section 381 (1) (a) of the Companies Act 2013 to a Foreign
Airlines Company
MCA Notification: dated July 19, 2016
Applicability of Section 381 (1) (a) of the Companies Act 2013 to a
Foreign Airlines Company subject to certain exemptions and modifications.
Applicability:
Foreign Airlines Company having share capital
Crux of the
Notification:
i.
As per this notification, Section 381 (1) (a) of the
Companies Act 2013 is applicable to Foreign Airlines Company subject to certain
exemptions and modifications.
In this regard the company shall be deemed to have
complied with the provisions of Section 381 (1)(a) of the act if it submits the
following documents for the period ended March 31, 2016 to the ROC
a. Copies of latest consolidated financial
statements of the parent foreign company, as submitted by it to the prescribed
authority in the country of its incorporation under the provisions of the law
for the time being in force in that country:
Provided that where
such documents are not in English language, there shall be annexed to it a
certified translation thereof in the English language.
b. in respect of its Indian Business
operations, a statement of receipts and payments for the financial year, duly
authenticated by a practicing Chartered Accountant in India or a firm or a
Limited Liability Partnership of practicing Chartered Accountants in India.
c. the documents required to be filed with
Registrar of Companies under sub-rule (2)of rule 4 of the Companies
(Registration of Foreign Companies) Rules, 2014.
ii.
On
receiving a notice in writing from the Central Government, the above said
company is required to furnish such other documents and information relating to
its accounts as requested.
Source
MCA Circular
(8.)
Relaxation of additional fees and extension of last date of filing AOC 4, AOC 4
(XBRL) AOC 4 (CFS) and MGT 7
under
Companies Act 2013
MCA Circular: Circular No. 08/2016 dated July 29, 2016
Relaxation
of additional fees and extension of last date of filing of forms related to
financial statements and annual returns.
Applicability:
To all the companies whose due date for
holding the AGM is on or after April 1, 2016
Crux of the Circular:
The Ministry
for the following reasons has relaxed the addition fees and extended the due
date, upto October 29, 2016, for filing of the forms related to financial
statements and annual return by those companies whose due date for holding the
AGM was on or before April 1, 2016.
Reasons for
extension of due date
- Revised forms AOC 4, AOC 4 (XBRL) AOC 4 (CFS) and MGT
7 would be deployed by the Ministry by the end of August 2016
-
To provide a Time period for the companies to get
familiarised with filing of the new forms.
Source:
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