“OVERVIEW ON RULES AND FORMS” UNDER THE COMPANIES ACT, 2013 25/09/2013 1
INDEX CHAPTER TOPICS CHAPTER I PRELIMINARY CHAPTER II INCORPORATION OF COMPANY AND MATTERS INCIDENTAL THERETO CHAPTER VI REGISTRATION OF CHARGES DECLARATION AND PAYMENT OF DIVIDEND CHAPTER VIII CHAPTER IX CSR RULES SECTION 135 CHAPTER-XI APPOINTMENT AND QUALIFICATIONS OF DIRECTORS CHAPTER XII MEETINGS OF BOARD AND ITS POWERS CHAPTER-XVI PREVENTION OF OPPRESSION AND MISMANAGEMENT 25/09/2013 2
INDEX CHAPTER TOPICS CHAPTER-XVIII REMOVAL OF NAMES OF COMPANIES FROM THE REGISTER OF COMPANIES CHAPTER XIX REVIVAL AND REHABILITATION OF SICK COMPANIES Chapter- XXII COMPANIES INCORPORATED OUTSIDE INDIA CHAPTER XXIV REGISTRATION OFFICES AND FEES CHAPTER –XXIX MISCELLANEOUS 25/09/2013 3
CHAPTER 1 - PRELIMINARY 25/09/2013 4
IMPORTANT DEFINITIONS INSERTED IN THE DRAFT RULES RELATES TO For the purposes of clause (42) of section 2 of the Act, the phrase ‘electronic mode’ means carrying out, business electronically including, but not limited to:- (i) business to business and business to consumer transactions, data interchange and other digital supply transactions; (ii) offering to accept deposits or subscriptions in India or from citizens of India; (iii) financial settlements, web based marketing, advisory and transactional services database services and products, supply chain management; (iv) online services such as telemarketing, telecommuting, telemedicine, education and information research; and (v) all related data communication services, whether conducted by e-mail, mobile devices, social media, cloud computing, document management, voice or data transmission or otherwise. 25/09/2013 5
IMPORTANT DEFINITIONS INSERTED IN THE DRAFT RULES RELATES TO “Total Share Capital”, for the purposes of sub- sections (6) and (87) of section 2, means aggregate of the • ( a) paid-up equity share capital- and • (b) paid - up preference share capital; Related party 1.3. For the purposes of clause (ix) of sub-section (76) of section 2, the following persons, with reference to a company, shall be deemed to be a related party- • (1) a director or key managerial personnel of the holding, subsidiary or associate company of such company or his relative; • (2) any person appointed in senior management in the company or its holding, subsidiary or associate company i.e. personnel of the company or its holding, subsidiary or associate company who are members of core management team excluding Board of directors comprising all members of management one level below the executive directors, including the functional heads. 25/09/2013 6
IMPORTANT DEFINITIONS INSERTED IN THE DRAFT RULES RELATES TO In order to grant flexibility in management and operations of the Corporates, a very important provision has been added in the Rules which says; Notwithstanding amendment of these rules from time to time, these rules shall be reviewed once in three years. 25/09/2013 7
CHAPTER II – INCORPORATION OF COMPANY AND MATTERS INCIDENTAL THERETO 25/09/2013 8
ONE PERSON COMPANY Eligibility criteria: • Natural person, • Indian citizen and • Resident in India (means who has stayed in India for 182 or more days during the last financial year) One person can open only 5 OPC , While incorporation of OPC, person shall be only member and he has to appoint one nominee who will become the member of OPC in the event of first person’s death or his incapacity to work, Such nominee shall give his written consent and nominee can be changes or nominee can himself withdraw his consent to act as such, OPC shall act as Private Limited Company subject to some privileges and exemptions. 25/09/2013 9
CONVERSION - OPC Compulsory conversion of OPC into a Public & Private Company • Paid up share capital of Rs 50 Lacs or OPC shall be ceased to be entitled as such if it • Last three years average annual turnover of exceeds: Rs. 2 crore or. Voluntary conversion of OPC into Private or Public Company is also permitted 25/09/2013 10
NAME GUIDELINES:- Abbreviations are not allowed, In case, any company changes its business activity and the present name is not in line with the new activity then such company shall, within six months from the date of change of activity, change its name. At time of applying the name, the applicant shall declare whether the name applied are being used or have been using for last five years or not, in any form of business constitution like LLP, Firm, etc. in case of yes, then NOC from its partners, associates for using the name. For incorporation of Section 8 Company (Non Profit Organisation), the name shall include the words like foundation, association, council, forum, etc. Upon change of name of the Company, the old name gets freed but such name shall not allowed to be taken by any other Company for three years from date of change of name, 25/09/2013 11
MISCELLENEOUS PROVISIONS Affidavit from the subscriber that he/ she has not been convicted of any offence under any Companies Act during the last 5 years and all the documents/ information are true. In addition to personal details subscriber shall also give PAN and one address proof and in case of foreign national, Passport is compulsory as ID proof. Every subscriber and First Directors, shall furnish specimen signature duly verified by their respective Bankers. First director shall give the particulars of his interest in other body corporate or other firms. 25/09/2013 12
ALTERATION OF MEMORANDUM OF ASSOCIATION : Shifting of registered office shall not be allowed if any inquiry, inspection or investigation has been initiated or any prosecution is pending against the Company, Name change shall not allowed if the company has defaulted in filing annual accounts or annual return or any other document due for filing or has defaulted in payment of matured deposits or debentures or any interest thereon. 25/09/2013 13
CHAPTER VI- REGISTRATION OF CHARGES 25/09/2013 14
REGISTRATION OF CHARGES The charges requiring registration are now specified in the rules. Registration of the charge with particulars of charge and instrument evidencing charge required to be filed with Registrar within the period of thirty days of its creation. Charge created by way of hypothecation of a motor vehicle shall not require registration unless the financier ,so requires. Requisite disclosure required to be made in the Balance Sheet. Verification process of Instrument evidencing charge specifically provided for, for e.g. different process defined for property situated in India or outside India. 25/09/2013 15
REGISTRATION OF CHARGES The application for condonation can be submitted to registrar within three hundred days of creation of charges. A declaration from the company by its secretary or director that such belated delay shall not adversely affect rights of any other creditors of the company to be provided for. Intimation regarding satisfaction of charge also to be given within 30 days of satisfaction. The application for condonation of delay can also be submitted to registrar within three hundred days of satisfaction of charges. Any delay beyond 300 days in creation, modification and satisfaction of charge to be condoned by Central Government. 25/09/2013 16
REGISTER OF CHARGES REGISTER OF CHARGES - The particulars of charges maintained on the MCA portal shall be deemed to be the register of charges. The register shall be open to inspection by any person on payment of fee . Company is also required to maintain Register of Charges with prescribed particulars therein; to be authenticated by secretary or other officer authorized by the Board. 25/09/2013 17
CHAPTER VIII: DECLARATION AND PAYMENT OF DIVIDEND 18 25/09/2013
STATEMENT OF PERSONS WHOSE DIVIDEND IS UNPAID AND UNCLAIMED Within 90 days of transferring any amount to unpaid dividend account , the company is required to prepare a statement in Form No. 8.1 The statement is required to be place on the company’s website and on any other website approved by the Central Government in .pdf format. The rules prescribed the manner in which the statement is to be placed on the website. 19 25/09/2013
TRANSFERRED TO THE INVESTOR EDUCATION AND PROTECTION FUND Any money transferred to the Unpaid Dividend Account by a company which remains unpaid or unclaimed for a period of seven years shall be transferred to the Investor Education and Protection Fund. A copy of duly stamped Challan evidencing deposit of the amount into the Fund shall be filed by the company. The rules prescribed the manner in which the unpaid amount is to be transferred to the fund. The company shall keep a record consisting of details of the persons in respect of whom unpaid or unclaimed amount has remained unpaid or unclaimed for a period of seven years. 20 25/09/2013
TRANSFERRED TO THE INVESTOR EDUCATION AND PROTECTION FUND For a period of eight years from the date of such transfer to the said Fund and the Authority shall have the powers to inspect such records. All shares in respect of which dividend is unpaid or unclaimed shall be transferred in the name of the Fund; voting rights thereon to remain frozen and benefits credited to IEPF suspense account. The rule prescribes the manner of transfer of shares. The authority may suo motu call upon any company to pay the amount due to the fund. 21 25/09/2013
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