On the 27th of October, 2023, the Ministry of Corporate Affairs issued a notable notification, G.S.R. 801(E), exercising its powers under the Companies Act, 2013. This notification introduces significant amendments to the Companies (Management and Administration) Rules, 2014. In this article, we will delve into the details of these changes and their implications.
1. Short Title and Commencement: The notification specifies that the amended rules will be known as the “Companies (Management and Administration) Second Amendment Rules, 2023.” Furthermore, these rules will come into effect on the date of their publication in the Official Gazette, ensuring prompt implementation.
2. Designation of Responsible Persons: Rule 9 of the Companies (Management and Administration) Rules, 2014, is expanded to include sub-rules (4) to (8). Sub-rule (4) mandates that every company must designate a person responsible for providing information to the Registrar or any authorized officer regarding beneficial interests in the company’s shares.
3. Options for Designation: Sub-rule (5) outlines the choices for designating a responsible person, which may include a company secretary, key managerial personnel (other than the company secretary), or every director. This flexibility ensures that companies can comply with the rule based on their specific organizational structure.
4. Deemed Designation: Until a person is officially designated as per sub-rule (4), certain individuals are deemed to have been designated, as specified in sub-rule (6). This includes the company secretary, Managing Director, or Manager, depending on the company’s specific circumstances.
5. Annual Disclosure: Sub-rule (7) mandates that every company must inform the details of the designated person in its Annual Report, ensuring transparency and compliance.
6. Change in Designated Person: If a company decides to change its designated person at any time, it must inform the Registrar by submitting e-form GNL-2 as per the Companies (Registration Offices and Fees) Rules, 2014.
7. Conclusion: The Ministry of Corporate Affairs’ recent notification, G.S.R. 801(E), introduces vital changes through the Companies (Management and Administration) Second Amendment Rules, 2023. These amendments require every company to designate a responsible person for reporting beneficial interests in company shares. The rule offers flexibility in choosing the designated person, ensuring compliance with various organizational structures. Annual disclosure and a mechanism for changing the designated person add further transparency to corporate affairs. Companies must promptly adhere to these rules to maintain compliance and good governance in their operations. Stay informed about these changes and adapt your corporate structure accordingly.
MINISTRY OF CORPORATE AFFAIRS
NOTIFICATION
New Delhi, the 27th October, 2023
G.S.R. 801(E).—In exercise of the powers conferred by sub-sections (1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Management and Administration) Rules, 2014, namely:-
1. Short title and commencement.-
(1) These rules may be called the Companies (Management and Administration) Second Amendment Rules, 2023.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. In the Companies (Management and Administration) Rules, 2014, in rule 9, after sub-rule (3), the following sub- rules shall be inserted, namely:-
“(4) Every company shall designate a person who shall be responsible for furnishing, and extending co-operation for providing, information to the Registrar or any other authorised officer with respect to beneficial interest in shares of the company.
(5) Forthe purpose of sub-rule(4), the company may designate-
(i) acompany secretary, if there is a requirement of appointment of such company secretary under the Act and the rules made thereunder; or
(ii) a key managerial personnel, other than the company secretary; or
(iii) every director, if there is no company secretary or key managerial personnel.
(6) Until a person is designated as referred under sub-rule (4), the following persons shall be deemed to have been designated person;
(i) company secretary, if there is a requirement of appointment of such company secretary under the Act and the rules made thereunder; or
(ii) every Managing Director or Manager, in case a company secretary has not been appointed; or
(iii) every director, if there is no company secretary or a Managing Director or
(7) Every company shall inform the details of the designated person in Annual
(8) If the company changes the designated person at any time, it shall intimate the same to the Registrar in e-form GNL-2 specified under the Companies (Registration Offices and Fees) Rules, 2014.
[F. No. 01/34/2013 CL-V (Pt-III)]
INDER DEEP SINGH DHARIWAL, Jt. Secy.
Note: The principal notification was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 260(E) dated 31st March, 2014 and last amended, vide number G.S.R. 44(E) dated 21st January, 2023.
