Under a process of #EaseOfDoingBusiness concept of the government and further to the necessities of the #CorporateIndia, the current government found to be thoughtful and often come with various new policies and also amendments in existing policies and laws. Ministry of Corporate Affairs (MCA) has issued several amendments in certain rules made under Companies Act, 2013 on May 07 2018. Article made an attempt to analyses important changes in a brief. Relevant Notifications can be checked on below links:-
| Title | Notification No. | Date |
|---|---|---|
| Companies (Appointment and Qualification of Directors) Second Amendment Rules, 2018 | G.S.R. ….. (E) | 07/05/2018 |
| Companies (Registration Offices and Fees) Second Amendment Rules, 2018 | G.S.R. ……. (E) | 07/05/2018 |
| Companies (Meetings of Board and its Powers) Amendment Rules, 2018 | G.S.R. 429 (E) | 07/05/2018 |
| Companies (Prospectus and Allotment of Securities) Amendment Rules, 2018 | G.S.R. 430 (E) | 07/05/2018 |
| Companies (Audit and Auditors) Amendment Rules, 2018 amending Rule 3,9,10A & 14 | G.S.R. 432(E) | 07/05/2018 |
| Companies (Specification of Definition Details) Amendment Rules 2018 | G.S.R. ___(E) | 07/05/2018 |
| MCA Notifies applicability of few more provisions of Companies (Amendment) Act, 2017 wef 07th May, 2018 | S.O. 1833(E) | 07/05/2018 |
In addition to above MCA has also issued Companies (Share Capital and Debentures) 2nd Amendment Rules, 2018 but due to some clerical errors they posted earlier notification dated 10th April 2018 on its website instead of new notification dated 07.05.2018, which is expected to be released today.
We have tried to make a little pool of the whole cluster. The brief understanding of them is as follows:
Companies (Prospectus and Allotment of Securities) Amendment Rules, 2018
| Existing Provision | Provision Description | Amendment |
| Rule 3 | Information to be stated in the Prospectus | Omitted |
| Rule 4 | Reports to be set out in the Prospectus | |
| Rule 5 | Other matter and reports to be set out in the Prospectus | |
| Rule 6 | Period for which information to be provided in certain cases |
Companies (Appointment and Qualification of Directors) Second Amendment Rules, 2018
| Existing Provision | Provision Description | Amendment |
| Rule 5 | Qualification of Independent Directors | to be read as Rule 5 (1) |
| – | – | Insertion of Rule 5 (2) as follows:
None of the relatives of an independent director, for the purpose of sub clause (ii) and (iii) of clause (d) of sub section (6) of Section 149- (i) is indebted to the company, its holding, subsidiary of associate company or their promoters, or directors; or (ii) has given a guarantee or provided any security in connection with the indebtedness of any third person to the company, its holding, subsidiary or associate company or their promoters, or directors of such holding company for an amount of fifty lakhs rupees, at any time during two immediately preceding financial years or during the current financial year. |
| Rule 16 | Copy of resignation of director to be forwarded by him | Where a director resigns from his office, he shall may within a period of thirty days from the date of resignation, forward to the Registrar a copy of his resignation along with reasons for the resignation in Form DIR 11 along with the fees as provided in the Companies (Registration Offices and Fees) Rules, 2014. |
Companies (Meetings of Board and its Powers) Amendment Rules, 2018
| Existing Provision | Provision Description | Amendment |
| Rule 4 | Matters to be dealt with in a meeting through video conferencing or other audio visual means | Following proviso shall be inserted:
Provided that where there is quorum presence in a meeting through physical of directors, any other director may participate conferencing through video or other audio visual means. |
| Rule 6 | Committees of the Board | The Board of Directors of every listed Public (inserted through this amendment) and following classes of Companies shall constitute an Audit Committee and a Nomination and Remuneration Committee of the Board-
Remarks: Companies, not being public company i.e. Private Limited Company, Banks, PSUs, Government Body etc., whose debt instruments are listed on the stock exchange need not to form such committees. |
| Rule 13 | Special Resolution | Substitution of the rule as follows:
A resolution passed at a general meeting in terms of (3) of section 186 to give any loan or guarantee or investment or providing any security or the acquisition under sub section (2) of Section 186 shall specify the total amount up to which the Board of Directors are authorized to give such loans or guarantee or investment or providing any security or make such acquisition: provided that the company shall disclose to the members in financial statement the full particulars in accordance with the provisions of sub section (4) of Section 186. |
Companies (Registration Offices and Fees) Second Amendment Rules, 2018
| Existing Provision | Provision Description | Amendment | ||||||||||||||||||||||||||||||||||||||
| Rule 10 (3) | Procedure on receipt of any application or form or document electronically | Following proviso shall be substituted:
“Provided that Registrar shall allow fifteen days’ time for resubmission of a name through web service – RUN for rectification of defects, if any.” |
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| Annexure | Table of Fees | Substitution
– For sub item (B) Following table of fees shall be applicable for delay in filing of the forms other than for increase in Nominal Share Capital or forms under Section 92 / 137 of the Act
In case of belated filing of forms or documents which were due to filing under Companies Act, 1956 or Companies Act, 2013, the fee payable at the time of actual filing shall be applicable. – After ( c ) the following shall be inserted: (d) Forms under section 92 (Annual Return) or 137 (Copy of financial statements to be filed with Registrar) : (i) In case the period within which a document required to be submitted under Section 92 or Section 137 of the Act expires after 30/06/2018 the additional fee mentioned in the table shall be payable:-
(ii) In all other cases where the belated returns or the balance sheet/ financial statement which were due to filing under Companies Act, 1956 or Companies Act, 2013, the fee payable at the time of actual filing shall be applicable:
Note: – Revised financial statements or board’s report are also covered under the said provision. – In case of belated filing of forms or documents which were due to filing under Companies Act, 1956 or Companies Act, 2013, the fee payable at the time of actual filing shall be applicable |
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Companies (Specification of Definition Details) Amendment Rules 2018
| Existing Provision | Provision Description | Amendment |
| Rule (2) (1) (r) | Total Share Capital | Omitted |
Companies (Audit and Auditors) Amendment Rules, 2018 amending
| Existing Provision | Description of Provision | Amendment |
| Rule 3 | Manner and procedure of selection of Auditors | a) Explanation shall be omitted
b) Proviso to sub rule 7 shall be omitted (no ratification at every AGM is required for Auditor appointed for five years) |
| Rule 9 | Liability to devolve on concerned partners only | Omitted |
| Rule 10A | Internal Financial Control Systems | Substitution as follows:
“adequate internal financial control system” as “internal financial controls with reference to financial statements” |
| Rule 14 | Remuneration of Cost Auditor | Substitution as follows:
a) in clause (a) of sub clause (i) the words “who is a cost accountant in practice” as “who is cost accountant” b) in clause (b) the words “who is a cost accountant in practice” as “who is cost accountant” |
Author Bio
very nice. Amendments relating to appointment of Independent directors u/s-149(2) and extension of loan or guarantee u/s-186 could have been elaborated. Very nice article, concisely delineated.