Ministry of Corporate Affairs (MCA) has vide its notifications dated 18th December 2020, issued amendment in following rules:
1. Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2020:
MCA has relaxed certain provisions under the law w.r.t. mandatory online proficiency self-assessment test that one has to undergo, post inclusion of his/her name in data bank, to make themselves eligible for appointment as an Independent Director.
Major amendments:
a) Individuals are now allowed to appear for an online proficiency self-assessment test within two years (as against one year), from the date of inclusion of his/her name in the data bank.
b) MCA has also revised the list of exemption criteria for an individual, to exempt them from appearing online test. Complete list can be accessed from the notification.
c) Tenure of directorship in certain classes of companies, for claiming exemption from online test, has been reduced from 10 years to 3 years.
d) An individual shall be deemed to be passed in an online test, by securing 50% in such test (Earlier it was 60%).
2. Companies (Compromises, Arrangements and Amalgamations) Second Amendment Rules, 2020:
MCA has notified amendment in CAA Rules, for introduction of definition “corporate action” and has laid down the complete procedural step in respect of purchase of minority shareholding held in Demat form, by inserting new rule 26 A.
Major amendments:
– Company shall complete verification of details of minority shareholders within two weeks from receipt of amount equal to price of shares that the acquirer intends to acquire from minority shareholders under Section 236 of CA 2013.
– After verification is completed, the Company shall send notice to minority shareholders, intimating them about cut-off dates.
– Upon receiving necessary information from the Company, the depository shall transfer shares of minority shareholders, who have not transferred on their own, into the designated account of Company, on cut-off date. Company Secretary shall be authorized for the purposes of effecting the transfer of shares.
– Upon transfer of shares, the Company shall immediately disburse the price of the shares so transferred.
In case of any difference in views, one may refer to the MCA notifications attached with this email.
3. Companies (Auditor’s Report) Second Amendment Order, 2020:
MCA has further deferred the applicability of CARO by one year, for the accounts to be audited by the auditors for the financial years commencing on or after 1st April 2021.
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