These FAQ’s are based on Latest amendments including Amendment by Companies (Amendment) Act, 2017 in relation to Filling of Financial Statement and Annual Return for financial Year ended on 31.03.2018.

Q.1. As per Companies Act, 2013 Statutory Auditor shall be appointing for 5 financial years subject to ratification by members in every AGM. However, Companies (Amendment) Act, 2017 (CAA, 2017)  removed the provision of ratification from the Act. In such case whether Notice of AGM required to mention point in relation to Statutory Auditor?

Before notification of section 139 of CAA, 2017 w.e.f. 07th May, 2018 every year in AGM notice companies have to mention about ratification of auditor.

However, this provision has been removed from Act w.e.f 07.05.2018 therefore every notice of AGM to be issued on or after 07.05.2018 no need to mention point in relation to auditor until unless there is appointment of auditor.

However, one can opine that even point in relation ratification of auditor no need to mention in Directors Report also.

Q.2. Where a Company can hold Annual General Meeting?

As per Companies Act, 2013 (CA, 2013) section 96, AGM of Companies shall be held either at the registered office of the company or at some other place within the city, town or village in which the registered office of the company is situated.

However, this provision has been amended by CAA, 2017 w.e.f. 13.06.2018 i.e. now annual general meeting of an unlisted company may be held at any place in India if consent is given in writing or by electronic mode by all the members in advance.

Q.3 Whether there is any difference in disclosure of Directors Report of OPC/ Small Company or Other Companies?

As per CA, 2013 section 134, Disclosures under Directors Report was same for all type of companies.

However, this provision has been amended by CAA, 2017 w.e.f. 31.7.2018 i.e. MCA has provided separate form of disclosures in Directors Report for OPC and Small Companies. It is less than half in comparison to other Companies? There are only 10 disclosures in Directors report of OPC and Small Company.

Q.4 Whether Rule 8 i.e. “Matters to be Included in Board’s Report” shall be applicable on OPC and Small Company?

A new sub Rule 6 added after sub Rule 5 in Rule 8; I.e. “This Rule shall not apply to OPC and Small Company”.

Therefore, Rule 8 shall not apply on the OPC and Small Company

Q.5 Whether Companies are required to prepare MGT-9?

As per CA, 2013 section 134, Companies was required to prepare MGT-9 extract of Annual Return and such MGT-9 was required to file with Directors Report.

However, this provision has been amended by CAA, 2017 w.e.f. 31.7.2018 i.e. as per notification dated 31st July, 2017 provision in relation to MGT-9 has been removed from Section 134 and a new provision is added i.e. “the web address, if any, where annual return referred to in sub-section (3) of section 92 has been placed”.

Therefore, one can opine that MGT-9 is not required to prepare by any Company if Directors Report approved in Board Meeting on or after 31st July, 2018.

Q.6. If a Company doesn’t having website, whether it is mandatory to Prepare MGT-9?

As per Section, 134 Companies have to give the link of Annual return in Directors Report only in the condition if Company having website.

If Company doesn’t have website then don’t have to give anything. Therefore, one can opine that irrespective of Fact Company having website or not requirement of MGT-9 has been done away with.

Q.7. Who will sign the Directors Report and all the Annexure like (AOC-1, AOC-2 etc)?

As per Act, Directors report should be sign by the any Two Directors or Chairman of the Company.

All the annexure should be sign in the same manner in which Directors report got signed.

Q.8. Who will sing the financial statement of the Company?

W.e.f. 07th May, 2017 following persons shall sing the financial statement of the Company

  • Any 2 directors one of them shall be MD, if any
  • Company Secretary of Company
  • CFO, if any
  • CEO, if any

Whether provisions of Section 203 KMP applicable on Company or not but if Company having CS, CEO, CFO or any of them they need to sign the Financial statement.

Q.9 What is minimum age for appointment of Director under Companies Act, 2013?

As Per Companies Act, 2013 Section 152(3) “ No person shall be appointed as a director of a company unless he has been allotted the Director Identification Number”.

Director Identification No. can be apply through e-form DIR-3. As per e-form DIR-3 ‘Person should be minimum 18 years of age while applying for this application”.

However, one can opine that minimum age for appointment of Director is 18 years.

MINIMUM AGE for MD & WTD?

No Person can be appoint as MD/ WTD or Manger if such person is below the age of twenty-one year.

Q.10 What is the maximum age for a Director to serve company as Director?

As per CA, 2013 section 197, Maximum age for a Managing Director is 70 years. If Company want to appoint a person as MD even after attainment of age of 70 can do by passing of Special Resolution.

There is no maximum age limit for director other then MD/ WTD/ Manager.

Q.11 Company falls under the limit of applicability of filing of financial statement into XBRL for some years. However, afterwards due to any reason, it doesn’t fall under the applicability requirement of XBRL. Whether such Company required preparing the financial statement into XBRL in future also?

As Per the applicability of filing of financial statement into XBRL amendment Rules, 2018, such Company required to file financial statement into XBRL in future years also irrespective whether falling in limit or not.

Q.12 Director of Company has resigned from the Company and filed DIR-11. However, Company fails to file his DIR-12 and fails to file financial statement for continue period of 3 financial years. Whether Resigned director shall consider as disqualified or not?

As per Companies Act, 2013 if a person has filed his DIR-11 as resignation from the Company. His resignation shall be update in the record of ministry. Even on MCA signatory details his “end date” shall be mentioned as per DIR-11.

Therefore, one can opine that in this case resigned director shall not be disqualified.

Q.13 Whether Companies are required to prepare MGT-9?

As per CA, 2013 section 134, Companies was required to prepare MGT-9 extract of Annual Return and such MGT-9 was required to file with Directors Report.

However, this provision has been amended by CAA, 2017 w.e.f. 31.7.2018 i.e. as per notification dated 31st July, 2017 provision in relation to MGT-9 has been removed from Section 134 and a new provision I added i.e. “the web address, if any, where annual return referred to in sub-section (3) of section 92 has been placed”.

Therefore, one can opine that MGT-9 is not required to prepare by any Company if Directors Report approved in Board Meeting on or after 31st July, 2018.

Q.14 If a Company doesn’t having website, whether it is mandatory to Prepare MGT-9?

As per Section, 134 Companies have to give the link of Annual return in Directors Report only in the condition if Company having website.

If Company doesn’t have website then don’t have to give anything. Therefore, one can opine that irrespective of Fact Company having website or not requirement of MGT-9 has been done away with.

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