E-FORM PAS-6 FOR THE HALF-YEAR ENDED ON 30TH SEPTEMBER, 2019 AND 31ST MARCH, 2020 CAN BE FILED TILL 31ST DECEMBER, 2020.
[Ref: “Companies Fresh Start Scheme, 2020 (CFSS-2020)” vide Circular No. 12/2020 dated 30th March, 2020 and General Circular No. 30/2020 dated 28th September, 2020]
The Ministry of Corporate Affairs (‘MCA’) has made available the Form PAS-6 for filling w.e.f. 15th July, 2020. Accordingly, the last date for filing the Form PAS-6 for the half-year ended on 30th September, 2019 and 31st March, 2020 will be 13th September, 2020.
The MCA came out with a detailed Scheme namely, “Companies Fresh Start Scheme, 2020 (CFSS-2020)” vide Circular No. 12/2020 dated 30th March, 2020. Therefore, defaulting company can take the benefit of “Companies Fresh Start Scheme, 2020 (CFSS-2020)” and no additional fee shall be charged for late filing under this Scheme.
It is pertinent to note that MCA has uploaded a list of 76 forms (including for companies and LLPs) for which the benefit of the Scheme CFSS-2020 can be availed. However, PAS-6 is not included in the list to avail the benefits under CFSS-2020 as Circular No. 12/2020 dated 30th March, 2020 and list of form have already come before deployed Form PAS-6 on site.
Currently, in view of large-scale disruption caused by COVID-19 Pandemic, MCA vide General Circular No. 30/2020 dated 28th September, 2020 has extended the CFSS-2020 till 31st December, 2020. Therefore, PAS-6 can be filed without any additional fee.
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Form PAS-6 [Reconciliation of Share Capital Audit Report (half-yearly)]
In the year September 2017, the MCA had struck off 2,00,000 Companies from the record of Registrar of Companies (‘ROC’) that were suspected to be ‘shell companies’ and also directed banks to restrict the operation of bank accounts of these companies by the directors or their authorized representatives. It is crucial to note that ‘shell companies’ not defined under the Indian Companies Act, but are those that adhere to basic company laws and are used to avoid taxes and convert black money into white.
It has been usually seen that these ‘shell companies’ are not filing the Income Tax Returns (ITR) or ROC Returns in a proper and timely manner. Mostly, these shell companies manipulate its accounting transactions before filing its Returns. It has been found that there are benami shareholding in these shell companies. It is very difficult to find the real ownership of the shares and the shareholders are untraceable and there is no transparency in the shareholdings of the Company.
In view of the above, MCA has decided to issue a Notification regarding amendment in Companies (Prospectus and Allotment of Securities) Rules, 2018;
- to enhance the transparency in the ownership of shares
- to curb the Benami Transactions
- to weed out the shell companies which is used for Money laundering and other illicit activities and
- a fight against black money
Accordingly, MCA has issued a Notification No. 853(E) dated 10.09.2018 as Companies (Prospectus and Allotment of Securities) Third Amendment Rules, 2018 (‘Third Amendment Rules, 2018’). The Notification is regarding the issue of securities in the dematerialized form by the Unlisted Public Companies (‘UPC’) only. This Notification has come into effect from 2nd October, 2018. By the Third Amendment Rules, 2018, a new Rule 9A was inserted first time after existing Rule 9 of Companies (Prospectus and Allotment of Securities) Rules, 2014.
As per new Rule 9A, UPC should issue the securities only in the demat form and also should take necessary steps to facilitate dematerialization of all its existing securities of the Company in accordance with the provisions of Depositories Act 1996 and regulations made thereunder.
Now, no UPC can issue securities in the physical form after 2nd October, 2018. W.e.f. 2nd October, 2018, every UPC which offers the issue of any securities or buyback of securities or issue of bonus shares or right issue or Private Placement shall issue the shares only in dematerialized Form.
It has also been provided in the new Rule 9A that every UPC’s Promoters, Directors and Key Managerial Personnel (KMP) should hold their entire lot of securities of the Company in demat mode in accordance with the provisions of the Depositories Act 1996 before issue of any securities or buyback of securities or issue of bonus shares or right issue or Private Placement by the Company.
Moreover, w.e.f. 2nd October, 2018, onwards an UPC shares can be transferred only through the Demat form. It means the holder of physical shares should first get their shares dematerialized and then they can only transfer their shares. No transfer of physical shares can be done on or after 2nd October 2018.
As per the sub-rule 8 of this Third Amendment Rules, 2018 and under provision of Regulation 55A of the SEBI (Depositories and Participants) Regulations, 1996, UPC which has availed the dematerialization facility are required to submit Reconciliation of Share Capital Audit Report on a Half-yearly basis to ROC whose Jurisdiction the Registered office of the company is situated which audited by a practising Company Secretary, for the purpose of reconciliation of share capital held in depositories and in physical form with the issued/listed capital.
The sub-rule 8 may be read as under-
“(8)-The audit report provided under regulation 55A of the Securities and Exchange Board of India (Depositories and participants) Regulations, 1996 shall be submitted by the unlisted public company on a half-yearly basis to the Registrar under whose jurisdiction the registered office of the company is situated.”
It is pertinent to note that this sub rule 8 created lot of ambiguities because it didn’t provide for the form in which and time within which such report to be filed with ROC and the SEBI (DP) Regulations, 1996 has been replaced by SEBI (DP) Regulations, 2018 w.e.f. 3rd October, 2018. Therefore, various representations were filed before MCA regarding practical difficulties faced by the professionals and company while filing such report to ROC.
Therefore, MCA vide notification dated 22nd May, 2019, amended existing Sub-Rule 8 mentioned above and inserted new Sub-Rule 8A in the main Rule 9A, which is effective from 30th September, 2019.
MCA vide its Notification No. 376(E) Dated 22nd May, 2019 has amended the Companies (Prospectus and Allotment of Securities) Rules, 2014 as the Companies (Prospectus and Allotment of Securities) Third Amendment Rules, 2019 (‘Third Amendment Rules, 2019’). This Notification has come into effect from 30th September 2019. By this Amendment MCA amended existing Sub-Rule 8 and inserted new Sub-Rule 8A in the main Rule 9A of Companies (Prospectus and Allotment of Securities) Rules, 2014 as under-
“(8) Every unlisted public company governed by this rule shall submit Form PAS-6 to the Registrar with such fee as provided in Companies (Registration Offices and Fees) Rules, 2014 within sixty days from the conclusion of each half year duly certified by a company secretary in practice or chartered accountant in practice.
(8A) The company shall immediately bring to the notice of the depositories any difference observed in its issued capital and the capital held in dematerialised form.”.
By the Third Amendment Rules, 2019, MCA introduced a new form i.e. Form PAS-6 [Reconciliation of Share Capital Audit Report (half-yearly)] which is basically used for the reconciliation of the share capital audit report on the half-year basis. Form PAS-6 is introduced w.e.f 30.09.2019 in pursuance to the sub-rule (8) of rule 9A of the Companies (Prospectus and Allotment of Securities) Rules, 2014.
So, Form PAS-6 has to be filed within sixty days from the conclusion of each half year (i.e. on 30th September and 31st March). All information shall be furnished for the half year ended 30th September and 31st March in every financial year for each ISIN separately.
However, later on, MCA has received representations regarding extension of the last date of filing of Form PAS 6 under Rule 9A(8) of the Companies (Prospectus and Allotment of Securities) Rules, 2014.
The matter was examined by MCA and it was stated by MCA vide its General Circular No. 16/2019 dated 28.11.2019, that the time limit for filing Form PAS-6 without additional fees for the half year ended on 30.09.2019 will be sixty days from the date of deployment of this form on the website of the Ministry.
Now, MCA has made available the Form PAS-6 for filling w.e.f. 15th July, 2020. Accordingly, the last date for filing the Form PAS-6 for the half-year ended on 30th September, 2019 and 31st March, 2020 will be 13th September, 2020.
*Non-Applicability.
The Rule 9A of Companies (Prospectus and Allotment of Securities) Rules, 2014 not applicable to UPC which is: –
(a) a Nidhi;
(b) a Government Company;
(c) a Wholly owned subsidiary.
* Non-Applicability of Rule 9A of Companies (Prospectus and Allotment of Securities) Rules, 2014 was inserted by the Companies (Prospectus and Allotment of Securities0 Amendment Rules, 2019, w.e.f. 22.01.2019.
Caution:
1. As mentioned above, all information shall be furnished for the hall year ended 30th September and 31st March in every financial year for each ISIN (International Securities Identification Number) separately. Therefore, every UPC has to obtain ISIN for each types of existing security.
2. If a UPC has different types of securities e. Equity, Preference, Debenture etc. in this case company has to obtain different ISIN and has to file different PAS-6 for each category of securities.
3. As per section 2(81) of the Companies Act, 2013, “securities” means the securities as defined in clause (h) of Section 2 of the Securities Contracts (Regulations) Act, 1956. As per section 2(h) of the Securities Contracts (Regulations) Act, 1956 “securities” include shares, scrips, stocks, bonds, debentures, debenture stock or other marketable securities of a like nature in or of any incorporated company or other body corporate.
4. If any UPC has not dematerialized its existing securities and not obtain ISIN for each types of securities, form PAS-6 cannot be filed as on date. Dematerialisation is the process by which physical certificates of an investor are converted to an equivalent number of securities in electronic form. Dematerialisation is for enhancing transparency, investor protection and governance in the corporate sector.
5. It is also pertinent to note that there is no penalty prescribed under Rule 9A Companies (Prospectus and Allotment of Securities) Rules, 2014 for non-compliance, therefore section 450 of the Companies Act, 2013 (punishment where no specific penalty or punishment is provided) will be applicable.
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E-FORM PAS-6 AND “COMPANIES FRESH START SCHEME, 2020 (CFSS-2020)”.
Due to the emerging financial distress faced by most companies on account of the large-scale economic distress caused by COVID 19, there is delay in filing of various forms which are provided under the Act. In view of this, Ministry of Corporate Affairs (MCA) has taken special measures under Companies Act, 2013 and Limited Liability Partnership Act, 2008 in view of the COVID -19 outbreak vide General Circular No. 11/ 2020 dated 24th March, 2020.
In order to support and enable Companies and Limited Liability Partnerships (LLPs) in India to focus on taking necessary measures to address the COVID-19 threat, including the economic disruptions caused by it, some measures have been implemented by the MCA to reduce their compliance burden and other risks. In Para I of the said Circular-
“No additional fees shall be charged for late filing during a moratorium period from 01st April to 30th September 2020, in respect of any document, return, statement etc., required to be filed in the MCA-21 Registry, irrespective of its due date, which will not only reduce the compliance burden, including financial burden of companies/ LLPs at large, but also enable long-standing non-compliant companies/ LLPs to make a ‘fresh start’. The Circulars specifying detailed requirements in this regard are being issued separately.”
In view of the special measure provided by MCA vide General Circular No. 11/ 2020 dated 24th March, 2020, a moratorium period from 1st April, 2020 to 30th September, 2020, has been provided by MCA, by which no additional fees shall be charged for late filing during the said moratorium period.
The due date of Form PAS-6, i.e. 13th September, 2020, is falling under moratorium period from 1st April, 2020 to 30th September, 2020, provided by MCA. Therefore, Companies can file Form PAS-6 till 30 September, 2020 without any additional fees for half year ended on 30.09.2019 and 31.03.2020.
Further, it is mentioned in the said circular that the Circulars specifying detailed requirements in this regard are being issued separately. In furtherance of the Ministry’s General Circular No. 11/ 2020 dated 24th March, 2020 and in order to facilitate the companies registered in India to make a fresh start on a clean slate, MCA has decided to take certain alternatives measures for the benefits of all companies.
So, MCA came out with a detailed Scheme namely, “Companies Fresh Start Scheme, 2020 (CFSS-2020)” vide Circular No. 12/2020 dated 30th March, 2020. The said CFSS-2020 automatically override moratorium period provided by General Circular No. 11/ 2020 dated 24th March, 2020
The MCA has uploaded a list of 76 forms (including for companies and LLPs) for which the benefit of the Scheme CFSS-2020 can be availed. However, PAS-6 is not included in the list to avail the benefits under CFSS-2020 as Circular No. 12/2020 dated 30th March, 2020 and list of form have already come before deployed Form PAS-6 on site.
The said CFSS-2020 is applicable between the 1st of April, 2020 and the 30th of September, 2020. Therefore, company will be able to file remaining forms, compliances till 30th September, 2020. The said Scheme CFSS-2020 is a golden opportunity for the defaulting companies to clear their slate and to make good any filling related defaults, irrespective of the duration of defaults, without any additional fees/ penalty / prosecution and make a fresh start as a fully compliant entity.
However, under said Scheme CFSS-2020, there is one additional compliance which a company have to abide by i.e. company has to file a FORM CFSS-2020 after closure of scheme and after the document(s) are taken on file, or on record or approved by the designated authority as the case may be but not after the expiry of six months from the date of closure of the scheme. There shall not be any fee payable on this Form.
Now, in view of large-scale disruption caused by COVID-19 Pandemic, MCA vide General Circular No. 30/ 2020 dated 28th September, 2020 has extended the CFSS-2020 till 31st December, 2020.
In view of the above, it is stated that company can file Form PAS-6 till 31st December, 2020 without any additional fee, however, it has to be filed a FORM CFSS-2020 after closure of scheme.
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Disclaimer: Nothing contained in this document is to be construed as a legal opinion or view of either of the authors whatsoever and the content is to be used strictly for educative purposes only.
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Dear Sir,
What is the due date of filing PAS 6 for period ending September 30, 2020.
Thanks