Introduction:
The year 2024 brings significant amendments to corporate regulations in India, impacting various aspects of business operations. The Ministry of Corporate Affairs (MCA) has introduced changes to the Companies (Incorporation) Rules, 2014, extending relaxations for companies meeting specific conditions. Additionally, adjustments to Annual General Meeting (AGM) timelines and amendments to accounting standards promise a dynamic landscape. This article delves into these updates, offering insights into their implications.
1. COMPANIES [INCORPORATION) RULES, 2014 AMENDED
Companies (Incorporation) rules 2014, amendment provides certain relaxations to companies if certain conditions have been fulfilled.
> The Ministry of corporate Affairs (MCA) notification No. G.S.R. 790 (E) dated 20.10.2023 has amended the Companies (Incorporation) Rules, 2014.
> Amendment removes imposition of cost at the time of processing of application filed for shifting of registered office.
> Prior to amendment, the Regional Director had power to impose cost while disposing the application for shifting of registered office from one state to another.
> The amendment further provides that when management of the company is taken over by new management under a resolution plan approved under section 31 of the Insolvency Bankruptcy code, 2016 (31 of 2016) and no appeal against resolution plan pending in any court or Tribunal and no inquiry, inspection, investigation is pending or initiated after the approval of the said resolution plan, the shifting of the registered office may be allowed.
Ministry of Corporate Affairs @MCA21India gives more relaxation in the mode of holding the Annual General Meeting #AGM to the companies
2. EXTENSION OF TIME TO CONDUCT ANNUAL GENERAL MEETING (AGM) 5 EXTRAORDINARY GENERAL MEETING (EGM] THROUGH VIDEO CONFERENCE [VC]
Ministry of Corporate Affairs gives more relaxation in the mode of holding the Annual General Meeting (AGM) to the companies.
> The Ministry vide General Circular no. 09/2023, extended the timeline to conduct Annual General Meeting (AGM) and Extraordinary General Meeting (EGM) through Video Conference (VC) or other Audio Visual (OVAM) or transact items through postal ballot for the year 2023 or 2024 on or before 30th, September, 2024.
The Companies (Indian Accounting Standards) Amendment Rules, 2023, aim to enhance financial reporting, transparency, and alignment with international standards.
3. COMPANIES [INDIAN ACCOUNTING STANDARDS) AMENDMENT RULES, 2023
The Companies (Indian Accounting Standards) Amendment Rules, 2023, aim to enhance financial reporting, transparency, and alignment with international standards.
> The Ministry of Corporate Affairs has notified the Companies (Indian Accounting Standards) Amendment Rules, 2023 vide G.S.R. No.242(E), dated 31.03.2023 effective from 01.04.2023.
> Amendments to Ind AS 1, Ind AS 8 and Ind AS 12 relating to disclosures of material accounting policies, definition of accounting estimates and deferred tax related to assets and liabilities arising from a single transaction.
> Consequential amendment in IndAS 107, IndAS 34 and IndAS 101.
> Further, amendments carried out in IndAS 101, IndAS 102, IndAS 103, IndAS 109 and IndAS 115.
4. AMENDMENTS TO COMPETITION [AMENDMENT] BILL
Amendments to Competition Bill in 2023 facilitates greater clarity to businesses operating in India and reduce the compliance burden for companies.
> The Competition (Amendment) Bill passed by Lok Sabha on 29th March, 2023 and Rajya Sabha 3rd April, 2023 and received the Presidential Assent on 11th April, 2023.
AMENDMENT PROVIDES:
> Transaction value more than Rs 2,000 crore will require Competition Commission of India’s approval.
> Timeline for the CCI to pass a final order on combination transactions reduced to 150 days from 210 days, towards ease of doing business.
> A new framework for settlement and commitment for faster resolution of investigations of anti-competitive agreements (except cartels) and abuse of dominant position.
> For the purpose of regulation of combinations, the Amendment modifies the definition of control as the ability to exercise material influence over the management, affairs, or strategic commercial decisions.
5. AMENDMENT IN COMPANIES (COMPROMISES, ARRANGEMENTS AND AMALGAMATIONS) RULES, 2016
Amendment in Companies Rules 2016 ensures a faster process to complete the merger.
> The Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 amended in May, 2023.
> Pursuant to the above amendment, if a Regional Director (RD) does not file an application before NCLT for considering the scheme of merger under Section 232 or does not issue confirmation order for approval of merger u/s 233 within the time limit provided, it shall be deemed that RD has no objection and the confirmation order shall be issued accordingly.
6. COMPANIES & LIMITED LIABILITY PARTNERSHIPS [LLPS] INCORPORATION CY2023
In FY2023-24, 1,53,818 Limited Liability Partnerships (LLPs) are incorporated as on 21st November 2023.
> During CY2023, 1,96,028 companies and LLPs incorporated as on 30.11.2023 as against 1,88,364 companies and LLPs for the corresponding period during CY 2022.
7. CENTRAL PROCESSING FOR ACCELERATED CORPORATE EXIT (C-PACE)
Establishment of C-PACE will ensure a clean registry, while providing a hassle-free filing and timely, process-bound striking off of company names from the Register.
> Central Processing for Accelerated Corporate Exit (C-PACE) operationalised w.e.f. 01.05.23 pursuant to Union Budget announcement 2022.
> The C-PACE operates through the Registrar of Companies (RoC) for exercising functional jurisdiction of processing and disposal of applications.
> C-PACE reduces stress on the Registry, keeps it clean, besides provides more meaningful data to stakeholders.
> C-PACE provides a hassle-free filing, timely and process-bound striking off a company from the Register.
8. STRAIGHT THROUGH PROCESSING BM IN E-FORMS
With introduction of Straight-through Processing (STP), automation in end-to-end processing of transactions is yet another step towards facilitating Ease of Doing Business.
> The processing type of additional e-forms changed to Straight through Process from Non-STP.
> Electronic approval of e-forms without human intervention for faster data capturing, processing and report generation.
> Ensures timely disposal of e-forms.
> Enables ‘ease of compliance’ and `ease of doing business’.
Conclusion:
The dynamic changes in corporate regulations for 2024 signify a concerted effort to enhance transparency, ease compliance burdens, and foster a business-friendly environment in India. As companies adapt to these amendments, staying informed and proactive will be crucial for navigating the evolving corporate landscape.
Companies (Incorporation) rules 2014, amendment provides certain relaxations to companies if certain conditions have been fulfilled.
