In this editorial, author shall discuss the latest amendment made by Ministry of Corporate Affairs (MCA) in respect to person/ company belong to country sharing land border with India:
- [1]MCA has amended Companies (Appointment and Qualification of Directors) Rules, 2014 w.e.f. June 01, 2022.
- [2]MCA has notified Companies (Incorporation) Second Amendment Rules, 2022 w.e.f. May 20, 2022.
- [3]MCA has notified Companies (Prospectus and Allotment of Securities) Amendment Rules, 2022 w.e.f. May 05, 2022.
- [4]MCA has amended Companies (Share Capital and Debentures) Rules, 2014 w.e.f. May 04, 2022.
These amendments have been made by :
i. Amendment has been made in Rule 8 and 10 Companies (Appointment and Qualification of Directors) Rules, 2014.
ii. Amendment has been made in DIR-2 and DIR-3.
iii. Form 9 in Companies (Incorporation) Second Amendment Rules, 2022 has been substituted with new formats
iv. ………………………….
A. Amendment I:
I. Application for DIN:
W.e.f. June 01, 2022 if any person want to get Director identification No. (DIN) in India and belong to any country like China, Pakistan, Bhutan, Myanmar, Nepal and Bangladesh then before to obtain DIN such person required to take approval from Ministry of Home Affairs and such clearance/ approval required to attach in DIR-3.
B. Amendment II:
II. Appointment of Director:
W.e.f. June 01, 2022 if any person wants to appoint as Director in any Company Incorporated in India belong to China, Pakistan, Bhutan, Myanmar, Afghanistan, Nepal and Bangladesh these countries then before before appointment such person required to take approval from Ministry of Home Affairs and such clearance/ approval required to attach with DIR-2.
Note:
*New Disclosures has been added in DIR-2 and DIR-3 w.e.f. 01st June 2022.
C. Amendment III: INCORPORATION
III. Declaration by First Subscriber:
W.e.f. June 01, 2022 if you are incorporating any Company in India you are required to use the “New INC-9” form. In the new form following clauses has been added:
√ I am required to obtain the Government Approval under the Foreign Exchange Management (Non-Debt Instrument) Rules, 2019 prior to subscription of shares and the same has been obtained, and is enclosed herewith. Or
√ I am not required to obtain the Government Approval under the Foreign Exchange Management (Non-Debt Instrument) Rules, 2019 prior to subscription of shares
IV. Declaration by First Director:
W.e.f. June 01, 2022 if you are incorporating any Company in India you are required to use the “New DIR-2” form. In the new form following clauses has been added:
a) When applying for DIN also:
√ I am not required to obtain the security clearance from the Ministry of Home Affairs, Government of India under sub-rule (1) of rule 10 before applying for director identification number; or
√ I am required to obtain the security clearance from the Ministry of Home Affairs, Government of India under sub-rule (1) of rule 10 before applying for director identification number and the same has been obtained and is attached.
b) New Disclosure in DIR-2 also:
I further declare that,
√ I am not required to obtain the security clearance from the Ministry of Home Affairs, Government of India before seeking appointment as director; or
√ I am required to obtain the security clearance from the Ministry of Home Affairs, Government of India before seeking appointment as director and the same has been obtained and is attached.
D. Amendment III: PRIVATE PLACEMENT OF SHARES
V. Declaration by First Subscriber:
W.e.f. May 05, 2022 no offer or invitation of any securities under private placement shall be made to a body corporate incorporated in, or a national of, a country which shares a land border with India, unless such body corporate or the national, as the case may be, have obtained Government approval under the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 and attached the same with the private placement offer cum application letter.”
a) New Disclosure in PAS-4 also:
(viii) Tick whichever is applicable: –
√ The applicant is not required to obtain Government approval under the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 prior to subscription of shares. – ;
√ The applicant is required to obtain Government approval under the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 prior to subscription of shares and the same has been obtained and is enclosed herewith. –
E. Amendment III: TRANSFER OF SHARES
VI. Declaration at time of Transfer:
W.e.f. May 04, 2022,
New Disclosure added in SH-4 also:
(viii) Tick whichever is applicable: –
√ Transferee is not required to obtain approval under the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 prior to transfer of shares.
√ Transferee is required to obtain approval under the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 prior to transfer of shares and the same has been obtained, and is enclosed herewith.
[1] Companies (Appointment and Qualification of Directors) Amendment Rules, 2022
[2]Companies (Incorporation) Second Amendment Rules, 2022 – Form No. INC-9
[3]Companies (Prospectus and Allotment of Securities) Amendment Rules, 2022
[4] Companies (Share Capital and Debentures) Amendment Rules, 2022
Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at [email protected]).
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