MCA on 1 Feb. 2021 has made some amendments with 3 different notifications. 

Let us know about those amendments through this article. 

Summary of amendments made 

(a) Amendment in definition of Small company

(b) Extending Scope for Mergers and Amalgamations for startup companies

(c) Reducing the no. of days to check residence criteria of directors 

(d) Omitting limit of Turnover and paid up share capital for conversion of OPC into Private or Public company or Private company into OPC 

(e) Amended E- form No.6 for Conversion of OPC into Private or Public company 

Notification 1: Companies (Specification of Definitions Details) Amendment Rules, 2021 

Amendments in Rule 

Following Rules of Companies (Specification of Definitions Details) Rules, 2014 has been amended- 

Rule 2- Sub rule 1 

Amended Rule

In Rule 2(1), after clause (s), following clause is inserted- 

(t) For the purposes of sub-clause (i) and sub-clause (ii) of  clause (85) of section 2 of the act, paid up capital and turnover of the small company shall not exceed rupees two crores and rupees twenty crores respectively. 

Effective date 

1 April, 2021

Impact of Amendment

Due to amendment in the rule, Definition of Small company under Section 2(85) will be amended as- 

Existing definition

Small company means a company, other than a public company- 

(i) paid-up share capital of which does not exceed fifty lakh rupees or such higher amount as may be prescribed which shall not be more than ten crore rupees and

(ii) turnover of which as per profit and loss account for the immediately preceding financial year does not exceed two crore rupees or such higher amount as may be prescribed which shall not be more than one hundred crore rupees

Provided that nothing in this clause shall apply to—

(A) a holding company or a subsidiary company;

(B) a company registered under section 8; or

(C) a company or body corporate governed by any special Act;

Amended definition

Small company means a company, other than a public company- 

(i) paid-up share capital of which does not exceed rupees two crores or such higher amount as may be prescribed which shall not be more than ten crore rupees and

(ii) turnover of which as per profit and loss account for the immediately preceding financial year does not exceed rupees twenty crores or such higher amount as may be prescribed which shall not be more than one hundred crore rupees 

Provided that nothing in this clause shall apply to—

(A) a holding company or a subsidiary company;

(B) a company registered under section 8; or

(C) a company or body corporate governed by any special Act;

Notification 2: Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2021 

Amendments in Rule 

Following Rules of Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 has been amended- 

Rule 25- Sub rule 1 

Amended Rule

After Sub rule 1, following Sub rule 1(A) shall be inserted, 

(1A) A scheme of merger or amalgamation under section 233 of the Act may be entered into between any of the following class of companies, namely:-

(i) two or more start-up companies; or

(ii) one or more start-up company with one or more small company

Explanation.- For the purposes of this sub-rule, “Start-up company” means-

A private company incorporated under the Companies Act, 2013 or Companies Act, 1956 and recognised as such in accordance with notification number G.S.R. 127 (E), dated the 19th February, 2019 issued by the Department for Promotion of Industry and Internal Trade.”

Effective date

On the date of their publication in the Official Gazette 

Notification 3: Companies (Incorporation) Second Amendment Rules, 2021 

Amendments in Rule 

Following Rules of Companies(Incorporation) Rules,2014 has been amended- 

Rule 3, 6, 7 and Annexure

Rule 3: One Person Company

Amendment 1:

For words, “and resident in India”, following substituted- 

“whether resident in India or otherwise” 

Amendment 2: 

In Explanation I, 

For words, one hundred and eighty two days, words, 

One hundred and twenty days is substituted. 

Amended rule

(1) Only a natural person who is an Indian citizen whether resident in India or otherwise – 

(a) shall be eligible to incorporate a One Person Company;

(b) shall be a nominee for the sole member of a One Person Company.

Explanation I – 

“Resident in India” means-

Person who has stayed in India for a period of not less than one hundred and twenty days during the immediately preceding financial year

Explanation II.- 

For the purposes of this rule, while counting the number of days of stay of a director in India for the financial year 2018-2019, any period of stay between 01.01.2018 till the date of notification of this rule shall also be counted 

Amendment 3:

Sub rule 7 shall  be omitted

Rule 6- One Person Company to Convert Itself into a Public Company or a Private Company in Certain Cases

Complete rule has been substituted with the following : 

(1) Alteration of MOA and AOA

MOA and AOA can be altered by passing a resolution as per 122(3) for conversion of OPC 

(2) Requirements to be fulfilled

OPC may convert into a Private or Public Company, other than Section 8 company by fulfilling below requirements-

  • Increasing the minimum number of members and directors to two (For Pvt. Company)  and seven members and three directors (For Public Company), 
  • Maintaining the minimum paid-up capital as per the requirements of the Act for such class of company and
  • By making due compliance of section 18 of the Act for conversion

(3) Form, Fees and Documents required for filing Conversion-

Form- e-Form No. INC-6 

Fees- As per Companies (Registration offices and fees) Rules, 2014 

Documents required-

(a) Altered MOA and AOA;

(b) Copy of resolution;

(c) List of proposed members and its directors along with consent;

(d) List of creditors; and

(e) Latest audited balance sheet and profit and loss account.

(4) Granting of New Certificate of Incorporation after Conversion 

After completion of all requirements, ROC shall approve form and Issue New Certificate of Incorporation 

Rule 7- Conversion of private company into One Person Company.-

Amendment 1: 

In Sub rule 1-

For words, “having paid up share capital of fifty lakhs rupees or less and average annual turnover during the relevant period is two crore rupees or less” shall be omitted

Amended sub rule 1-

(1) A private company other than a company registered under section 8 of the Act may convert itself into one person company by passing a special resolution in the general meeting.

Amendment 2: 

In sub-rule (4)(i), the words “, the paid up share capital company is fifty lakhs rupees or less or average annual turnover is less than two crores rupees, as the case may be” shall be omitted 

Amended sub rule 4- 

(4) Form, Fees and Documents required for filing Conversion-

Form- e-Form No. INC-6 

Fees- As per Companies (Registration offices and fees) Rules, 2014 

Documents required for Conversion-

(i) The directors of the company shall give a declaration by way of affidavit duly sworn in confirming that all members and creditors of the company have given their consent for conversion,, as the case may be;

(ii) List of members and creditors

(iii) Latest audited balance sheet and profit and loss account 

(iv) Copy of No Objection letter of secured creditors 

 Amendment in Annexure 

(a) E-Form No.INC-5 shall be omitted 

(b) For the e-Form No.INC-6, a new e form No. INC-6 shall be substituted

Effective date

1 April, 2021

Author Bio

Qualification: CS
Company: Priyanka and Associates
Location: EAST DELHI, New Delhi, IN
Member Since: 15 Apr 2020 | Total Posts: 11
I am Qualified Company Secretary June 2019 Batch and currently running my Own Firm -Priyanka and Associates .Writing legal blogs and articles for websites. Practising in Incorporation of Companies, Winding up of Company, All kinds of ROC Compliance, Annual Filing,Income Tax Return Filing ,Search Rep View Full Profile

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