CORPORATE AND PROFESSIONAL UPDATE DECEMBER 19, 2015

CORPORATE AND PROFESSIONAL UPDATE DECEMBER 19, 2015

FAQ ON COMPANY LAW:

Query: One of our client company appointed us as Auditors of the company at the Annual General Meeting held on 30th September, 2015.

But brother of one of partner of Auditor firm has invested in the equity shares for face value of Rs. 1 lakh on 15th October, 2015. Clarify whether we are disqualified as Auditor of that Company or not.

Answer: According to section 141(3)(d)(i) of the Companies Act, 2013, a person who, or his relative or partner holds any security of the company or its subsidiary or of its holding or associate company a subsidiary of such holding company, which carries voting rights, such person cannot be appointed as auditor of the company.

Provided that the relative of such person may hold security or interest in the company of face value not exceeding 1 lakh rupees.

In your case you,being Auditors, did not hold any such security. But your brother held equity shares of company of face value Rs. 1 lakh, which is within the specified limit.

Further Section 141(4) provides that if an auditor becomes subject, after his appointment, to any of the disqualifications specified in sub-section 3 of section 141, he shall be deemed to have vacated his office of auditor.

Hence, your Auditor firm can continue to function as auditors of the Company even after 15th October 2015.

MCA has notified the Companies (Meetings of Board and its Powers) Second Amendment Rules, 2015 which shall come into force on the date of their publication in the Official Gazette.

 MCA has notified and appointed 14^th day of December, 2015 as the date on which the provisions of Section 13 and 14 of the Companies (Amendment) Act, 2015 shall come into force.

FAQ on ESIC

Q 1. Can a factory or establishment once covered go out of coverage if the number of persons employed therein goes down to the minimum limit prescribed?

Ans. Once a factory or an Establishment is covered under the Act, it continues to be covered notwithstanding the fact that the number of persons/ coverable employees employed therein at any time falls below the required limit or there is a change in the manufacturing activity.

Q 2. Is there any provision for ‘exemption of a factory or establishment’ from ESI coverage?

Ans. Of course exemption is permissible from operation of provisions of the Act subject to the condition that the employees in a factory or establishment covered are other-wise in receipt of benefits substantially similar or superior to those provided under the ESI Act. The appropriate Government may grant exemption to such factory or establishment for a period of one year at a time prospectively in consultation with ESI Corporation. Application for renewal is to be made three months before the date of expiry of the period exemption.

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Q 1. What is the procedure for Registration of an employer?

Ans. The Factory or Establishment to which the Act applies is to be registered by logging into ESIC Portal i.e. www.esic.in The employer is supposed to sign up, providing company name, principle employer’s name, State and region as well as e mail address. The employer trying to register would get a password into his mail id. The employer can log in to www.esic.in and his mail ID can be used as user ID and the password received has to be accessed from the mail box to be used to register his unit by providing information in the Portal. Automatically a 17 digit code number is generated after successful registration.

Q. What is a Code number?

Ans. It is a 17 digit unique identification number allotted to each of the factory/establishment registered under the provisions of the Act. Such a number is generated through ESIC portal on submission of the pertinent information by the employer or generated on receipt of Survey report from the Social Security Officer.

Q. What is a Sub-code number?

Ans. This is also a unique identification number allotted to a sub-unit, branch office, sales office or Registered Office of a covered factory or establishment located in the same State or different State. The employer can register any Branch or Sales Office through ESIC Portal using his credentials.

Q. What is registration of Factory/Establishment?

Ans. Registration is the process, by which every factory/ establishment, to which the Act applies, is identified for the purpose of the ESI Scheme, and their individual records are set up for them.

Q. Is it mandatory for the Employer to register under the scheme?

Ans. Yes, it is the statutory responsibility of the employer under Section 2 –A of the Act read with Regulation 10-B, to register their Factory/ Establishment under the ESI Act within 15 days from the date of its applicability to them.

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