MCA has notified amendment to various rules under Companies Act, 2013

MCA has notified amendment to various rules under the Companies Act, 2013. w.ef. 07 May, 2018

MCA has notified amendment to various rules under the Companies Act, 2013. The amendments are effective from May 07, 2018. The amended provisions have been discussed as under:

• MCA has amended the Companies (Meetings of the Board and its Powers) Rules, 2014. A new provision has been inserted to Rule 4 of the said rules providing that any other director may participate through video conferencing or other audiovisual means if there is quorum in a meeting through the physical presence of directors.
• MCA has amended the Companies (Audit and Auditors) Rules,2014. Amendment has been made to rule 3 whereby proviso to sub-rule 7 of Rule 3 and explanation thereunder have been omitted. This means that the requirement of ratification of the appointment of Auditor in every annual general meeting (AGM) till the conclusion of the sixth AGM has been removed. Further Rule 9 of the said rules has been omitted. Rule 10A and Rule 14 have also been amended.
• MCA has amended the Companies (Registration Office and Fees) Rules, 2014. A new provision has been inserted under Rule 10(3) providing that - Registrar shall allow fifteen days' time for re-submission in case of reservation of name through web service -RUN for rectification of defects if any. Earlier re-submission was not allowed in case of re-submission of application through RUN.
• MCA made An amendment in Annexure I of the Companies (Registration Office and Fees) Rules, 2014 prescribing an additional fee of Rs. 100 per day effective from July 1, 2018, for the delay in filing of annual returns and financial statements. The additional fee shall also be applicable to the revised financial statement or board report as well as the Secretarial audit report.
• MCA has amended the Companies (Appointment and Qualification of Directors) Rules, 2014 whereby amendment has been made to Rule. The revised norm provides that in case of appointment of Independent Director, none of the relatives of such independent director should be indebted to the company, its holding subsidiary or associate Company or their promoters, or directors; or has given a guarantee or provided any security in connection with the indebtedness of any third person to its holding, subsidiary or associate company or their promoter or directors for an amount of Rs. 50 Lakhs at any time during the two immediately preceding financial years or during the current financial year.
• MCA has amended the Companies (Prospectus and Allotment of Securities) Rules, 2014. The amendment prescribes omission of rule 4 - Reports to be set out in the Prospectus, rule 5- Other matters and reports to be stated in the prospectus, and rule 6- Period for which information to be provided in certain cases.

• MCA issues Explanation on the holding of AGM through VC other OAVM-AGM may be carried out by VC or OAVM only by a company which has in its records, the email addresses of at least half of its total number of members, for more details Download the Link

Public and Private unlisted companies-RTA Services 

This is with reference to the Notification dated 10th September 2018 Government of India, Ministry of Corporate Affairs has notified Amendment to The Companies (Prospectus and Allotment of Securities) Rules, 2014 making it mandatory for every Unlisted Publicly held Company to facilitate dematerialization of all its existing securities. Every unlisted public company making any offer for issue of any securities or buyback of securities or issue of bonus shares or rights offer shall ensure that before making such offer, entire holding of securities of its promoters, directors and key managerial persons has been dematerialized. Transfer of securities on or after 2nd October 2018 shall be effected only if such securities are dematerialized before the transfer.   

Further, as per MCA Notification Dated 23 May 2019 Companies have to submit Form PAS-6 Half Yearly audit report on reconciliation of share capital.  

Advantages of Dematerialisation    

· Ease in Transfer, Pledge, etc.   

· Elimination of risks associated with physical certificate   

· Preventing malpractices   

· Ease in Mergers and Consolidation of Companies  

· Improving the corporate governance system  

· Exemption from payment of stamp duty on transfer   

· Loan against securities which are held in a DEMAT by offering it as a collateral to the lender  

MCA : STK forms will be processed with C-PACE - Mansar Gururam

Regards 

Rajput Jain & Associates

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