Regulatory updates for the Month of June 2022

Company Law:

1. Companies (Removal of Names of Companies from Registers of Companies) Amendments Rules, 2022

• Only two resubmissions are allowed in STK 2 by MCA within 15 days of raising the query
• Ministry has also revised MCA e-Forms : Form STK 1, STK-5 / 5A

2. Companies (Appointment and Qualification of Directors) Second Amendment, Rules, 2022

• Restoration fees of Rs 1000/- added and time allowed of 1 year to complete the online proficiency for Independent Directors

3. National Financial Reporting Authority Amendment, Rules, 2022

• Fine rationalized to Rs 5000 and where the contravention is continuing one, a further fine not exceeding Rupees 500 for every day.

 SECURITIES LAW

1. Regulation 31 of SEBI (LODR) Regulations, 2015 in relation to disclosure of shareholding pattern & manner of maintaining shareholding in dematerialized format.

• Format for disclosure of foreign ownership limits added.
• The formats of Table III & Table IV i.e.(Statement showing shareholding pattern of the Public shareholder & Non Promoter – Non Public shareholder Respectively) have been modified.

INSOLVENCY LAW

1. Insolvency and Bankruptcy Board of India (Information Utilities) (Amendment) Regulations, 2022.

• Before filing an application to initiate corporate insolvency resolution process the creditor (Financial or Operational) shall file the information of default, with the information utility (IU) recorded with MCA 21 & registry as repositories or any other statutory repository as approved by the Board.
• IU shall record status of default as authenticated or disputed, in case of operational creditor additional category deemed to be authenticated
• Record of default as per prescribed format to be issued by IU

2. Insolvency Professionals to act as Interim Resolution Professionals, Liquidators, Resolution Professionals and Bankruptcy Trustees (Recommendation) Guidelines, 2022.

• Revised guidelines for appointment of IRP, IP & others.
• Effective from July 1, 2022.

3. Insolvency and Bankruptcy Board of India (Inspection and Investigation) (Amendment) Regulations, 2022

• New Chapter III A and III B added covering Investigation during disposal of Complaint or Grievance and Interim Order on material available on record Stakeholders definition has been inserted.

4. Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2022

• Operational creditor to provide Form GSTR-1 and Form GSTR-3B filed and copy of e-way bill as documentary evidence of debt and default.
• While filing application u/s 7 or 9, the financial creditor or operational creditor are required to furnish their PAN and Email-ID details.
• Third registered valuer may be appointed from the committee of creditors if the two estimates of a value in an asset class are 25% different.
• To ensure fast flow of information mandated Creditors to provide the extract from the audits of the corporate debtor and latest financial statements and other relevant financial information to the resolution professional. Similar duty on Promoter, Corporate Debtor to provide information within timelines.
• Mandatory contents of a resolution plan to include manner in which proceedings in respect of avoidance transactions shall be done

5. Insolvency and Bankruptcy Board of India (Grievance and Complaint Handling Procedure) (Amendment) Regulations, 2022

• • Grievance or complaint can be filed on portal http://www.ibbi.gov.in/.

• The aggrieved and the service provider are required to submit the information and records within 7 days. (Earlier 15 days)
• Grievance is required to be closed within 30 days of its receipt by
• the board. (Earlier 45 days)
• Service provider is required to redress the grievance within 30 days. (Earlier 45 days)
• Insolvency professional agency may be approached for disposal of grievance against an insolvency professional of which he/she is a member and the grievance shall be disposed off by the bye laws of insolvency professional agency and intimation within 30 days shall be given to the Board.
• The Complainant and the service provider are required to submit the information and record within 7 days (Earlier 15 days). Additional time not exceeding 7 days may be granted on request.
• Complainant can request to review the decision given by the Board within 30 days, if not satisfied with the decision given by the Board.
• The Board may issue a show cause notice or order an investigation if a prima facie cases is there as per the opinion of the Board.

6. Application under Rule 4, 6 or 7 of Insolvency and Bankruptcy (Application to Adjudication Authority) Rules, 2016

• Application by financial creditor/ operational creditor/ corporate applicant will be forwarded by the Board to the Information Utility (IU).
• Other creditors of the Corporate Debtor are to be informed by the IU by sharing application.
• Notice shall be issued by IU requiring the applicant to file ’information of default’ in Form C.
• IU shall process the ‘information of default’ for issuance of ‘Record of default’.

DUE DATES

Due Dates under various laws

Disclaimer : This newsletter is a compilation of updates prepared and circulated from the academic point of view only and are not intended to constitute professional advice on any matter. The views and opinions expressed in this newsletter are those of the author of this document and are based on the internal research done by the Author.