MCA Circulars
rationale and
implications
CS Suresh Thakur Desai
M.A.,LL.B. D.B.M.FCS
12/05/2011
The Companies which have not filed their statutory Annual Reports
(ie. Balance Sheet, Profit & Loss Account Accounts and Annual
Returns) with the Registrar of Companies, they would not to be
allowed to file their other forms except the following forms till the
companies has filed its updated Statutory Annual Accounts/ Annual
Return in MCA – 21 system:
Form 32,Form 20BForm 21A,Form DIN 3,Form 21
Form 1AA,Form 62,Form 23AC & ACA
Further implication of default in filing Annual documents:
Directors of theses companies will not be allowed to sign any
document for filing with MCA 21 system
Company Secretaries and Auditors of these companies will also
not be allowed to sign and certify the filing with MCA – 21
system; and it is not clear whether this applies only in respect
of such companies or in respect of their other clients also.
To take action against the defaulting companies in co-
ordination with RBI and SEBI
20/04/201 The Simplified procedure as
Effective from April
1
mentioned in the General
20,2011
Circular 16/2011 issued by
Ministry of Corporate Affairs
simpler procedures shall be
adopted for the amalgamation of
Government
Companies under section 396 of
the Companies Act, 1956 as
mentioned in the Circular
Cost
Audit
MCA has issued Notifications containing First Time Industry
Specific Cost Audit Order (instead of Company specific) for
companies covered under 14 industries. Copies of the same
are attached.
The main features of the Orders are as under:
Category -1:
In case of following industries:
o
Bulk Drugs
o
Formulations
o
Fertilizers
o
Sugar
o
Industrial Alcohol
o
Electricity Industry
o
Petroleum Industry
o
Telecommunications
(i)
Companies having Net Worth exceeding Rupees Five Crores
(ii)
Companies having Turnover exceeding Rupees Twenty Crores
(iii)
Companies whose equity or debt securities are listed or in the
process of listing on any stock exchange in or outside India .
Category -2
In case of following industries:
o
Cement
o
Tyres & Tubes
o
Steel Plants
o
Steel Tubes and Pipes
o
Paper
o
Insecticides
Cost Audit is applicable to the following companies:
(i)
Companies having Turnover exceeding Rupees One Hundred
Crores
(ii)
Companies whose equity or debt securities are listed or in the
process of listing on any stock exchange in or outside India .
Revised procedure for appointment of Cost Auditors
07/04/2011
PAN of the existing Indian Applicant is mandatory field in
DIN eform – 1. All the existing DIN holders which have not
furnished their PAN earlier at the time of obtaining DIN, are
required to furnish their PAN by filing DIN- 4 eform by 31st
May, 2011
6/04/2011
In the Directors’ Relatives (Office or Place of Profit) Rules,
2003, (‘the said rules’), in Rule 3, for the figures “50,000” the
figures “2,50,000” are substituted .
In the said Rules, sub-rule (7) of rule 4, the following rule has
been substituted:
'The selection and appointment of a relative of a director
holding office or place of profit in the company shall be
approved by adopting the same procedure applicable to nonrelatives :
Provided that, in the case of listed public Companies, the
selection of director for holding place of office or profit in the
company shall have to be also approved by a Selection
Committee.
Came into
effect on
April 7,
2011
EXPLANATIONFor the purpose of this sub-rule, the expression
"Selection Committee" means a committee, the majority
of which shall consist of independent directors and an
expert in the respective field from outside the company
Provided that in case of unlisted companies,
independent directors are not
necessary but outside experts should be thee in the
Selection Committee:
Provided further that in the case of private companies,
independent directors
and outside experts are not necessary
31/03/201
1
In the Companies (Particulars of Employees)
Rules, 1975 (hereinafter referred as the said
rules), in rule 1A,
in clause (a), for the words "rupees twenty- four
lakhs”, the words " sixty lakh rupees " shall be
substituted;
in clause (b), for the words " rupees two lakhs",
the words "five lakh rupees" shall be substituted.
In the first proviso to rule 2 of the said rules,for the words “particular of employees of
companies” the words “particulars of
Government Companies and Companies”
shall be substituted
b) for the words “rupees twenty- four Lakhs per
financial year or rupees two lakhs per month”, the
words “sixty lakh rupees per financial year or five
lakh rupees per month” shall be substituted
New rule
applicable
in respect
of all the
Board
reports
signed
after
April. 1,
2011
irrespectiv
e of the
accountin
g year to
which
they
relate
31/03/2011
Filing of Balance Sheet and profit and Loss
Account in eXtensible Business Reporting
Applicable to all companies listed in India and
their subsidiaries, having a paid up capital of
Rs. 5 Crores and above or a Turnover of
Rs. 100 crores or above, excluding banking
companies, insurance companies, power
companies, Non Banking Financial Companies
(NBFCs) and overseas subsidiaries of these
companies
Ministry of Corporate Affairs (MCA) has come
out with an Exposure Draft on XBRL
taxonomy for Commercial and Industrial (C&I)
entities for filing their Balance Sheet and
Profit and Loss Account visit the site for
details
Applicable for
the Financial
year ending on
31st March, 2012
other than listed
company.
18/03/2011
With effect from 1st May, 2011, the
powers are delegated to Registrar of
Companies for incorporating companies
u/s 25
Power of
granting
approval
under
section 25
of the Act
is now
delegated
to ROC
from May
1, 2011
Words
1
2.
3.
4.
Corporation, corp, corpn, corp
international, Globe, Global,
World, Overseas, Universe,
Universal, Continent,
Continental, Inter Continental,
AsiaticAsia, Asian being the first
word of the name
Requirement of
Required authorized
Minimum Authorised capital (in Rs.) after
Capital as on the date
the proposed
notification from
MCA
Rs. 25 crore
Rs.5 Crore
Rs 5 crore
Rs 1 crore
Rs2 crore
If any of the words at (2) above is
used within the name (with or
without brackets
Hindustan, India, Indo, Indian,
Bharat, Bharatvarsh, Bhartiya or
any other country’s name being
first word of the name
Rs 50 lakhs
Rs. 2 crore
Rs 50 Lakhs
Sl
no
words
Requirement of
Minimum
Authorised
Capital as on the
date
Required
authorized capital
(in Rs.) after the
notification from
MCA
5
If any of the words at (4) above is
used within the name (with or
without brackets)
Rs 5 lakhs
Rs 25 lakhs
6
Industries/ Udyog
Rs 1 crore
Rs 5 crore
7
Enterprises, Products, Business,
Manufacturing, Venture.
Rs 10 Lakhs
Rs 50 Lakhs
04/03/ No physical submission of DIN documents
2011
The application can also be submitted online
by the applicant himself using his DSC.
Where the DIN 1 is verified by the Practising
professional(CS/CA/ CWA) the DIN will be
approved by the system immediately online
In other cases the DIN cell will examine the
application and same shall be disposed of
within one or two days.
Effective
from
from 27th
March,
2011
08/02/
2011
The Central Government
hereby directs that provisions
of Section 212 shall not apply
in relation to subsidiaries of
those companies which fulfill
the prescribed conditions
mentioned in the said circular
dated 8th February, 2011
issued by Ministry of
Corporate Affairs
Shall be applicable
in respect of
balance sheet and
profit and loss
accounts prepared
regarding the
financial year
ending on or after
the 31st March,
2011
General
Circular No.
27 /2011
dated May
20, 2011
The Circular relies on the provisions of the Information
Technology Act 2000 [the IT Act] which is enacted inter
alia toThe Circular defines “electronic mode” to mean
video conferencing facility i.e. audio-visual electronic
communication facility (VCF) employed which enables
all persons participating in that meeting to
communicate concurrently with each other without
intermediary and to participate effectively in the
meeting provide for legal recognition of electronic
records
2 The Circular clarifies that shareholders of a company
may participate in a General Meeting under the
provisions of the Act through electronic mode.
Participation by members through VCF will not be
counted towards quorum
For holding General Meeting through electronic mode, a
company shall comply with the following in addition to
compliance required under the Act:
1. Notice of the General Meetings should inform shareholders
regarding availability of participation through VCF and details
for accessing VCF.
2. Chairman of the General Meeting and Secretary shall
assume the following responsibilities i.e.:
a. Safeguarding the integrity of the meeting via video
conferencing;
b. Ensuring proper video conference equipment / facilities;
c. Preparing minutes of the meeting;
d. Ensuring that only concerned shareholder or proxy to a
shareholder is attending the meeting through VCF;
e. If a statement of a participant in the meeting via VCF is
interrupted or garbled, the Chairman or Secretary shall
request for a repeat or reiteration, and if need be, the
Chairman or Secretary shall repeat what he heard the
participant was saying for confirmation or correction.
3. In order to provide larger participation and for cost reduction, listed
companies may provide VCF for such meetings in at least 5 places in
India. Such places should be top 5 states / union territories based on
maximum number of members or at least 1,000 members, whichever
is more, residing as per the address registered with the depositories.
4. In order to have secured electronic platform for capturing accurate
electronic voting process, the agencies duly approved by MCA viz.
National Securities Depository Limited, Central Depository Services
(India) Limited should be appointed, subject to such agencies
completing necessary certification.
Clarification dated May 23
Sections 108 A to 108 I of the Companies Act will not have any legal force
Circular no 29 of 2011
“ In order to cut timeliness and another step towards “Green Initiative “ all the
certificates and letters issued by the Registrar of Companies shall be issued in electronic
form under the Digital signature after June 30, 2011
Sending Annual Reports by Email
i) Allowing service of Documents including Balance Sheets and
Auditors report etc through e-mail addresses :
In order to reduce cost of posting and speedy delivery of
documents, service of documents through electronic mode
has been permitted under section 53 of the Companies Act,
1956 in place of service of document under certificate of
posting.
For this companies have
after fulfilling certain basic conditions being:Grant of advance opportunity to members to register and change
their e-mail id with the company from time to time.
Complete display of documents on company website and the
advertisement to such to be issued in Advertisement
In case any member has not registered his mail id, procedure
specified u/s 53 to be followed for sending documents
Physical copies to be made available to members insisting for the
same.
Voting in General Meeting of Companies through electronic mode
: In order to have
secured electronic platform for capturing accurate electronic
processes, Central Depository Services (India) Ltd (CDSL) and
National Securities Depositories Limited (NSDL) are being given
approval by the Ministry of Corporate Affairs to provide their
electronic platform for capturing accurate electronic voting in
General meetings of the company
Improvements in process in MCA21 to help stakeholders / corporates
1.Introduction of Refund ProcessEarlier there was no process in MCA21
for refund of fees wrongly paid by the stakeholder while availing various
services at MCA 21. Now the Ministry has introduced process of refund of
statutory fees paid for certain services.
The refund of MCA21 fees is available in the following cases:
a)Multiple Payments; b) Incorrect Payments & c) Excess Payment
Refund process is not applicable for certain services/ eForms like Public
Inspection of documents, Request for Certified Copies, Payment for
transfer deeds, Stamp duty fee (D series SRN), IEPF Payment, STP Forms,
DIN eForm, etc.
The refund form is to be filed within the stipulated time period. Also,
there shall be deduction in the amount to be refunded based on time
period within which refund eForm is filed. The following is the time slab
for filing refund form and the corresponding deduction in refund amount:
Time within which refund application is made is 0-90 days, the default value
for deduction is 2.5%; for 91-180 days it is 5%; 181- 270 days it is 7.5%; for
271-365 days its 10% ans for more than 365 days its 25% respectively. Filing
of refund form shall not be allowed after expiry of 1095 days of filing of the
original request. For all earlier cases, (i.e. cases filed before introduction of
refund process), the time limit shall be considered from the date on which
the refund process is introduced i.e. from 01/05/2011.
2.Removal of Prioritizing by MCA officers
Earlier while processing a eforms by the MCA , there was a facility available
to officers to mark a work item as urgent to bypass the First in First Out
(FIFO) processing. However, in order to bring in more transparency, this
functionality has been stopped. The work items will be processed in the
order of their filings only.
3.Automatic approval for Form 2, Form 3 regarding return of allotment
of shares, Form 18 for change of registered office and for 32 for change
in directors details to be processed under STP mode (Straight through
processing)
(a)Form 2 and Form 3 have been made as STP (Straight Through
Process) form and are not required to be processed by RoC.
(b)Form 18 filed for existing company for change in registered office
where there is no change in State or RoC has been made as STP form
and is not required to be processed by RoC user.
(c)Similarly Form 32 filed by an existing company for change in directors
has also been made as a STP form.
Now the form is process and taken on record without intervention of
ROC it will save time for approving the form and immediately available
for public inspection.
LLP can be appointed as an Auditor
MCA in exercise of its powers under 2(7)(c) of the Companies Act
1956.
vide its notification dated 23rd may,2011 has notified that LLP, which
is a Body Corporate as per the LLP Act 2008, shall not be treated as
Body Corporate, for the purpose of section 226(3)(a) of the
Companies Act 1956,
As section 2(7)(c) empowers, the Central Government to notify,
notify that a Body Corporate, will not be recognized as Body
Corporate for the purpose of the Companies Act 1956.
Section 226 (3) of the Companies Act 1956 provides for the
disqualification for appointment of auditor of a company and as per
clause (a) of this sub section, a body corporate cannot be appointed
as Auditor. The MCA by its aforesaid notification has taken LLP out
of the purview of the Body Corporate under this sub section and
therefore, LLP can be appointed as the Auditor of the company.
Thanks
My contact
Res 6528 0976
Mobile No 98209 25640
sureshthakurdesai@yahoo.co.in