Companies (Incorporation) Second Amendment Rules, 2019
The Central Government hereby amends the Companies (Prospectus Incorporation) Rules, 2014 and these rules may be called the Companies (Incorporation) Second Amendment Rules, 2019. By way of these amendments, a company with authorised capital up to Rs.15 lacs can be incorporated without any fees for E-form 32 (Spice). The existing threshold limit for authorized capital of Rs. 10 Lacs has been increased to Rs.15 Lacs. These rules shall be effective from 18th March, 2019.
[Source: Notification No. G.S.R. (E) dated 06th March, 2019]
Companies (Incorporation) Amendment Rules, 2019
The Central Government has amended the Companies (Incorporation) Rules 2014 by inserting a new Rule 25A after existing Rule 25. As per this new Rule 25A, all companies incorporated on or before 31st December 2017, shall file the particulars of the company and its registered office in e-Form ACTIVE i.e. E-Form 22A on or before 25th April, 2019.
[Source: Notification No. G.S.R. 144 (E) dated 21st February, 2019]
Extension for last date of filing initial return in MSME Form 1
Pending the deployment of MSME Form I on MCA 21 portal and in order to avoid inconvenience to stakeholders on account of various factors, the period of thirty (30) days for filing initial return in MSME Form 1 as specified in Specified Companies (Furnishing of information about payment to micro and small enterprise suppliers) Order, 2019 dated 22.01.2019 shall be reckoned from the date the said e-form is deployed on MCA 21 portal.
[Source: General Circular No. 01/2019 dated 21st February, 2019]
Companies (Adjudication of Penalties) Amendment Rules, 2019
In exercise of the powers conferred by section 454 read with section 469 of the Companies Act, 2013, the Central Government hereby amends the Companies (Adjudication of Penalties) Rules, 2014. These rules may be called the Companies (Adjudication of Penalties) Amendment Rules, 2019. They shall come into force on the date of their publication in the Official Gazette.
[Source: Notification No. G.S.R. 131 (E) dated 19th February, 2019]
Companies Prospectus and Allotment of Securities) Second Amendment Rules, 2019
The Central Government hereby amends the Companies (Prospectus and Allotment of Securities) Rules, 2014 and these rules may be called the Companies (Prospectus and Allotment of Securities) Second Amendment Rules, 2019. By way of this amendment the Government has omitted the words “not allotted securities with an application size of less than twenty thousand per person” in E-Form PAS-3.
[Source: Notification No. G.S.R. 130 (E) dated 19th February, 2019]
Companies (Significant Beneficial Ownership) Amendment Rules, 2019
In exercise of the powers conferred by sub-sections (1) and (2) of section 469 read with section 90 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Significant Beneficial Owners) Rules, 2018. These rules may be called the Companies (Significant Beneficial Owners) Amendment Rules, 2019. They shall come into force on the date of their publication in the Official Gazette.
[Source: Notification No. G.S.R. 100 (E) dated 08th February, 2019]
Notification under section 465 of CA 2013
In exercise of the powers conferred by sub-section (3) of section 1 of the Companies Act, 2013 (18 of 2013), the Central Government hereby appoints the 30th January, 2019 as the date on which the provisions of section 465 of the said Act in so far as they relate to the repeal of the Companies Act, 1956 (1 of 1956) [that in except in so far as they relate to the repeal of the Registration of Companies (Sikkim) Act, 1961 (Sikkim Act 8 of 1961) shall come into force.
[Source: Notification No. S.O. 560 (E) dated 30th January, 2019]
Companies (Prospectus and Allotment of Securities) Amendment Rules, 2019
The Central Government hereby amends the Companies (Prospectus and Allotment of Securities) Rules, 2014 and these rules may be called the Companies (Prospectus and Allotment of Securities) Amendment Rules, 2019. By way of these amendments issue of shares in dematerialized form by an unlisted public company which is a Nidhi Company, Government Company or Wholly Owned Subsidiary Company is not applicable.
[Source: Notification No. G.S.R. 43 (E) dated 22nd January, 2019]
Companies (Acceptance of Deposits), Amendment Rules, 2019
The Central Government hereby amends the Companies (Acceptance of Deposits) Rules, 2014 and these rules may be called the Companies (Acceptance of Deposits) Amendment Rules, 2019. By way of these amendments it has been mandated that every Company other than Government Company shall file a onetime return of outstanding receipt of money/loan by a company which was not considered as deposit in terms of Clause (c) of sub-rule 1 of Rule 2 of Acceptance of Public Deposits Rules from 01st April, 2014 to the date of publication of the notification in official gazette i.e. 22nd January, 2019. Such return should be filed in form DPT-3 within 90 days from the date of publication of the official gazette, i.e. 22nd January, 2019.
[Source: Notification No. G.S.R. 42 (E) dated 22nd January, 2019]
Companies (Furnishing of information about payment to micro and small enterprise suppliers) Order, 2019
Every specified company shall file in MSME Form I details of all outstanding dues to Micro or small enterprises suppliers existing on the date of notification of the order within thirty days from the date of publication of the notification. Afterwards, MSME Form I should be filed by 31st October for the period from April to September and by 30th April for the period from October to March. All companies, who get supplies of goods or services from micro and small enterprises and whose payments to micro and small enterprise suppliers exceed forty five days from the date of acceptance or the date of deemed acceptance of the goods or services as per the provisions of section 9 of the Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006) are referred as “Specified Companies”.
[Source: Notification No. S.O. 368 (E) dated 22nd January, 2019]
NCLT Amendment Rules, 2019
The Central Government hereby amends the National Company Law Tribunal Rules, 2016 and these rules may be called the National Company Law Tribunal (Amendment) Rules, 2019. By way of this amendment the power of Central Government has been delegated to Regional Director for approval under section 61 (1) (b) i.e. for division/consolidation of share capital which results in changes in the voting percentage of shareholders.
[Source: Notification No. G.S.R. 29 (E) dated 15th January, 2019]
RBI UPDATES
Establishment of Branch Office (BO) / Liaison Office (LO) / Project Office (PO) or any other place of business in India by foreign entities
In terms of extant Regulations, applications received from a Non-Government Organisation, Non-Profit Organization, Body/Agency/Department of a foreign Government for opening of a branch office or a liaison office or a project office or any other place of business in India are to be forwarded to the Reserve Bank for prior approval and be considered in consultation with the Government of India. This has since been reviewed and as notified through Notification No FEMA 22(R)(1), it is advised that if such an entity is engaged, partly or wholly, in any of the activities covered under Foreign Contribution (Regulation) Act, 2010 (FCRA), it shall obtain a certificate of registration under the said Act and shall not seek permission under FEMA 22(R).
Accordingly, the Form FNC has also been suitably modified and the following phrase added under the heading ‘Declaration’ in Part II clause (ii), at the end of the existing sentence.
“We will not undertake either partly or fully, any activity that is covered under Foreign Contribution Regulation Act, 2010 (FCRA) and we understand that any misrepresentation made or false information furnished by us in this behalf would render the approval granted under the Foreign Exchange Management (Establishment in India of a branch office or liaison office or a project office or any other place of business) Regulations, 2016, automatically as void ab initio and such approval by the Reserve Bank shall stand withdrawn without any further notice”.
[Source: RBI/2018-19/132 A.P. (DIR Series) Circular No. 20 dated 27th February, 2019]
Foreign Exchange Management (Export and import of Currency) (Amendment) Regulations, 2019
In exercise of the powers conferred by clause (g) of sub-section (3) of Section 6 and Section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999), the Reserve Bank of India hereby amends the Foreign Exchange Management (Export and import of Currency) Regulations, 2015 and these regulations may be called the Foreign Exchange Management (Export and import of Currency) (Amendment) Regulations, 2019. The following amendment has been made in the aforesaid regulations:
“take or send out of India to Nepal or Bhutan, currency notes of Government of India and Reserve Bank of India notes (other than notes of denominations of above Rs.100 in either case), provided that an individual travelling from India to Nepal or Bhutan can carry Reserve Bank of India notes of Mahatma Gandhi (new) Series of denominations Rs. 200/- and/or Rs. 500/- up to a total limit of Rs. 25,000”
[Source: Notification No. FEMA 6(R)/(1)/2019-RB dated 26th February, 2019]
Investment by Foreign Portfolio Investors (FPI) in Debt
In terms of paragraph 4(f) (ii) of the AP (DIR Series) Circular No. 31 dated June 15, 2018 no FPI shall have an exposure of more than 20% of its corporate bond portfolio to a single corporate (including exposure to entities related to the corporate). As announced in paragraph 10 of the Statement on Developmental and Regulatory Policies of the Sixth Bi-monthly Monetary Policy Statement for 2018-19 dated February 07, 2019, in order to encourage a wider spectrum of investors to access the Indian corporate debt market, it has been decided to withdraw this provision with immediate effect.
[Source: RBI/2018-19/123 A.P. (DIR Series) Circular No. 19 dated 15th February, 2019]
External Commercial Borrowings (ECB) Policy – ECB facility for Resolution Applicants under Corporate Insolvency Resolution Process
In terms of paragraph 2.1.(viii) of the Annex to the A.P. (DIR Series) Circular No. 17, dated January 16, 2019 on “External Commercial Borrowings (ECB) Policy – New ECB Framework”, ECB proceeds cannot be utilised for repayment of domestic Rupee loans, except when the ECB is availed from a Foreign Equity Holder as defined in the aforesaid framework.
On a review it has been decided, in consultation with the Government of India, to relax the end-use restrictions for resolution applicants under the Corporate Insolvency Resolution Process (CIRP) and allow them to raise ECBs from the recognised lenders, except the branches/ overseas subsidiaries of Indian banks, for repayment of Rupee term loans of the target company under the approval route. Accordingly the resolution applicants, who are otherwise eligible borrowers, can forward such proposals to raise ECBs, through their AD bank, to Foreign Exchange Department, Central Office, Mumbai of the Reserve Bank for approval.
[Source: RBI/2018-19/121 A.P. (DIR Series) Circular No. 18 dated 07th February, 2019]
External Commercial Borrowings (ECB) Policy – New ECB Framework
It has been decided, in consultation with the Government of India, to rationalise the extant framework for ECB and Rupee Denominated Bonds in light of the experience gained to improve the ease of doing business. The new framework is instrument neutral and would further strengthen the Anti Money Laundering (AML)/Combating Financing of Terrorism (CFT) framework.
[Source: RBI/2018-19/109 A.P. (DIR Series) Circular No. 17 dated 16th January, 2019]
SEBI UPDATES
Relaxation from requirement to furnish a copy of PAN for transfer of equity shares of listed entities executed by non-residents
Relaxation has been granted to non-residents (such as NRIs, PIOs, OCIs and foreign nationals) from the requirement to furnish PAN and permit them to transfer equity shares held by them in listed entities to their immediate relatives subject to the following conditions:
- The relaxation shall only be available for transfers executed after January 01, 2016.
- The relaxation shall only be available to non-commercial transactions, i.e. transfer by way of gift among immediate relatives.
- The non-resident shall provide copy of an alternate valid document to ascertain identity as well as the non-resident status.
For the purpose of Para 3(b) above, the term “immediate relative” shall have the same meaning as defined in Regulation 2(1)(l) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.
[Source: Circular No. SEBI/HO/MIRSD/DOS3/CIR/P/2019/30 dated 11th February, 2019]
Format for annual secretarial audit report and annual secretarial compliance report for listed entities and their material subsidiaries
The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 have been amended to include the Regulation 24A relating to Secretarial Audit. The following shall be complied with by a listed entity and its material unlisted subsidiaries, as applicable:
Annual secretarial audit report:
- Currently, Section 204 of the Companies Act, 2013 read with rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 requires Secretarial Audit by Practicing Company Secretaries (PCS) for listed companies and certain unlisted companies above a certain threshold in From No. MR-3.
- In order to avoid duplication, the listed entity and its unlisted material subsidiaries shall continue to use the same Form No. MR-3 as required under Companies Act, 2013 and the rules made there-under for the purpose of compliance with Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as well.
Annual secretarial compliance report:
- While the annual secretarial audit shall cover a broad check on compliance with all laws applicable to the entity, listed entities shall additionally, on an annual basis, require a check by the PCS on compliance of all applicable SEBI Regulations and circulars/ guidelines issued there-under, consequent to which, the PCS shall submit a report to the listed entity in the manner specified in this circular.
- The format for the annual secretarial compliance report is placed at Annex-A in the Notification.
The annual secretarial compliance report in the aforesaid format shall be submitted by the listed entity to the stock exchanges within 60 days of the end of the financial year.
[Source: Circular No. CIR/CFD/CMD1/27/2019 dated 08th February, 2019]
Clarifications in SEBI (Depositories and Participants) Regulations, 2018
SEBI, vide notification dated October 03, 2018, issued Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018 [SEBI (D&P) Regulations, 2018]. Stock Exchanges, Depositories, Public Financial Institutions and Public Sector Banks had sought certain clarifications from SEBI with regard to the applicability of Regulation 24 (9) and Regulation 24 (10) of SEBI (D&P) Regulations, 2018. In this regard, it is clarified that:
- For the purpose of Regulation 24 (9) and Regulation 24 (10) of SEBI (D&P) Regulations 2018, a recognized clearing corporation shall not be considered as a Depository Participant.
- For the purpose of 24(10) of SEBI (D&P) Regulations 2018, in addition to the directors, employee/s of entities mentioned in Regulation 24 (10) shall not be considered as Depository Participant or their associate.
[Source: Circular No. SEBI/HO/MRD/DOP-2DSA2/CIR/P/2019/22 dated 23rd January, 2019]
Companies (CSR) Amendment Rules, 2018:
In exercise of the powers conferred by section 135 and subsections (1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the amendments to the Companies (Corporate Social Responsibility Policy) Rules, 2014. These rules may be called the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2018 and they shall come into force on the date of their publication in the Official Gazette.
[Source: Notification No. G.S.R. (E) dated 19th September, 2018]
Commencement Notification:
The Ministry of Corporate Affairs (MCA) has notified Section 37 [Section 135 (Corporate Social Responsibility) of Companies Act, 2013] of the Companies (Amendment) Act, 2017 which is effective from 19th day of September, 2018.
[Source: Notification No. S.O. (E) dated 19th September, 2018]
LLP Amendment Rules 2018:
In exercise of the powers conferred by sub-sections (1) and (2) of section 79 of the Limited Liability Partnership Act, 2008 (6 of 2009), the Central Government hereby makes the amendments in the Limited Liability Partnership Rules, 2009. These rules may be called the Limited Liability Partnership (Second Amendment) Rules, 2018 and they shall come into force with effect from the 2nd October, 2018.
[Source: Notification No. GS.R. (E) dated 18th September, 2018]
Commencement Notification:
The Ministry of Corporate Affairs (MCA) has notified Section 66 [Section 196 (Appointment of Managing Director, Whole-time Director or Manager) of Companies Act, 2013], Section 67 [Section 197 (Overall Maximum Managerial Remuneration and Managerial Remuneration in case of absence or Inadequacy of Profits) of Companies Act, 2013], Section 68 [Section 198 (Calculation of Profits) of Companies Act, 2013], Section 69 [Section 200 (Central Government or Company to fix limit with regard to Remuneration) of Companies Act, 2013] & Section 70 [Section 201 (Forms of and Procedure in relation to certain Applications) of Companies Act, 2013] of the Companies (Amendment) Act, 2017 which is effective from 12th day of September, 2018.
[Source: Notification No. S.O. (E) dated 12th September, 2018]
Companies (appointment and remuneration of managerial personnel) Amendment Rules 2018:
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 amendment to the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. These rules may be called the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2018 and they shall come into force on the date of their publication in the Official Gazette.
[Source: Notification No. G.S. R. dated 12th September, 2018]
Companies (Prospectus and allotment of securities) 3rd Amendment Rules 2018:
In exercise of the powers conferred by clause (b) of sub-section (1) of section 29 read with sub-sections (1) and (2) of section 469 of the Companies Act 2013 (18 of 2013), the Central Government hereby makes the amendments to the Companies (Prospectus and Allotment of Securities) Rules, 2014 by inserting a new rule i.e. Rule 9A (Issue of securities in dematerialized form by unlisted public company).
These rules may be called the Companies (Prospectus and Allotment of Securities) Third Amendment Rules, 2018 and they shall come into force on the 2nd day of October, 2018.
[Source: Notification No. G.S. R. (E) dated 10th September, 2018]
