CRL – 1 –Form for Information to the Registrar by company regarding the number of layers of subsidiaries
Part I – Law(s) Governing the eForm
Every company other than certain exempted class of companies, which has number of layers of subsidiaries in excess of the layers specified in the Companies Act 2013 shall file a return in Form CRL-1 with the Registrar within a period of 150 days from the date of publication of these rules in the Official Gazette.
Section 2(87)
“Subsidiary Company” or “Subsidiary”, in relation to any other company (that is to say the holding company), means a company in which the holding company –
1. Controls the composition of the Board of Directors; or
2. Exercises or controls more than one-half of the total share capital either at its own or together with one or more of its subsidiary companies:
Provided that such class or classes of holding companies as may be prescribed shall not have layers of subsidiaries beyond such numbers as may be prescribed.
Explanation – For the purposes of this clause,
1. A company shall be deemed to be a subsidiary company of the holding company even if the control referred to in sub-clause (i) or sub-clause (ii) is of another subsidiary company of the holding company;
2. The composition of a company’s Board of Directors shall be deemed to be controlled by another company if that other company by exercise of some power exercisable by it at its discretion can appoint or remove all or a majority of the directors;
3. The expression “company” includes anybody corporate;
4. “Layer” in relation to a holding company means its subsidiary or subsidiaries;
Rule 4
1. On and from the date of commencement of these rules, no company, other than a company belonging to a class specified in sub-rule (2), shall have more than two layers of subsidiaries:
a. Provided that the provision of this sub-rule shall not affect a company from acquiring a company incorporated outside India with subsidiaries beyond two layers as per law of such country:
b. Provided further that for computing the number of layers under this rule, one layer which consists of one or more wholly owned subsidiary or subsidiaries shall not be taken into account.
2. The provision of this rule shall not apply to following classes of companies, namely: –
a. A banking company as defined in clause (c) of section 5 of Banking Regulation Act, 1949 (10 of 1949);
b. A non-banking financial company as defined in clause(f) of Section 45-I of the Reserve Bank of India Act, 1934 (2 of 1934) which is registered with the Reserve Bank of India and considered as systematically important non-banking financial company by the Reserve Bank of India;
c. An insurance company being a company which carries on the business insurance in accordance with the provision of the Insurance Act, 1938 (4 of 1938) and Insurance Development Authority Act, 1999 (41 of 1999);
d. A Government company referred to in clause (45) of section 2 of the Act.
3. The provisions of this rule shall not be in derogation of the proviso to sub-section (1) of section 186 of the Act.
4. Every company, other than a company referred to in sub-rule (2), existing on or before the commencement of these rules, which has number of layers of subsidiaries in excess of the layers specified in sub-rule (1)
a. shall file, with the registrar a return in Form CRL-1 disclosing the details specified therein, within a period of one hundred and fifty days from the date of publication of these rules in the Official Gazette;
b. shall not, after the date of commencement of these rules, have any additional layer of subsidiaries over and above the layers existing on such date; and
c. shall not, in case one or more layers are reduced by its subsequent to the commencement of these rules, have the number of layers beyond the number of layers it has after such reduction or maximum layers allowed in sub rule (1), whichever is more.
5. If any company contravenes any provision of these rules the company and every officer of company who is in default shall be punishable with fine which may extend to ten thousand rupees and where any contravention is a continuing one, with a further fine which may extend to one thousand rupees for every day after the first during which such contravention continues.
Part II – Instructions to fill the eForm
Specific Instructions to fill the eForm CRL-1 at Field Level
Instructions to fill the eForm are tabulated below at field level. Only important fields that require detailed instructions to be filled in eForm are explained. Self-explanatory fields are not discussed.
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