JMJA and Associates LLP

The recent action of MCA disqualifying Directors has created chaos among the Companies. While the process has started few months back when MCA issued notices and subsequently struck off nearly 2 lakh of Companies. While the initial actions against Shell Companies were in isolation, it has not affected many companies. Considering the fact that MCA started striking off all the Companies which were non active or the Companies which has not done its filing for years. However, after striking of Companies, now MCA has now issued list of nearly 1 lakh of individuals who are disqualified to be Directors under Section 164 (2) (a) of the Companies Act, 2013. The list contains all the Directors of previously struck off companies. While the move was somewhat expected, its after effects are creating more wobble in the compliance of various Companies. As per Clause (a) of section 167( 1 ), the office of a director shall become vacant in case, if he incurs any of the disqualifications spec...

Ministry of Corporate Affairs (MCA) recently via press release  announce that it has identifies more than one lakh directors of shell companies for disqualification . The process started with Government taking action against  Black Money  first they cancelled license of nearly 2 lakhs Companies, later they announced freezing of Bank Accounts of all the Shell Companies whose registrations are cancelled. To put in numbers, the step MCA, in consultation with Finance Ministry and Government of India has taken is as under: MCA cancelled the registration of above 2 lakh Shell Companies. Subsequently, Ministry of Finance via Press Release announced that the bank accounts of all such companies are frozen and Banks and announced that Directors and Officer of the Company will not able to operate Bank Account of such companies unless  such companies are legally restored by NCLT.  Now, MCA has identified over  1 lakh Directors for disqualification...

The Ministry of Corporate Affairs (MCA), on Monday invited public comments for further simplification of starting a business (name reservation and incorporation) procedure in India.  This is in terms with the Governments initiative to improve the ease of doing business, by simplifying the procedures and reduce the fees for incorporation of company in India. This is implemented through e-governance initiatives such as the MCA21 portal and SPICe (Simplified Proforma for Incorporating Company Electronically) forms. According to the Ministry, these reforms that have been undertaken have helped in reducing the procedures for starting a business in India and provide Ease of Doing Business.  Recently, the fee for incorporation (of the integrated e-Form SPICe /INC-32) has been reduced from INR 2,000 to INR 500. The cost incurred by a company for a company seal is also eliminated as the requirement for a company seal has  removed vide amendment to the Companies Act,...

The Companies (Acceptance of Deposits) Rules, 2014 is amended vide notification dated September 19, 2017. Highlights of the amended rule is as under: (1) Specified IFSC pubic company (in line with exemption notification) can accept upto 100 % paid-up and free reserves and premium account (without following other public company rules). (2) Private companies accepting the deposits from its members need to file form DTP-3 (3) DPT-3 is revised to cover all types of reporting. (4) the maximum limit in respect of deposits to be accepted from members shall not apply to following classes of private companies: (i) Start-up private companies (5 years) (ii) Other private company: which satisfies:      (a) Not a associate or subsidiary to other company (holding not covering: holding can take deposits beyond limits);      (b) not having borrowing twice of it capital or Rs.50 Cr from Banks/Financial institution/ Other body corporate; and   ...

Quick Reference to "Scrutinizer" Legal Provision:- Section 109 (5) of the Companies Act, 2013. "(5) Where a poll is to be taken, the Chairman of the meeting shall appoint such number of persons, as he deems necessary, to scrutinise the poll process and votes given on the poll and to report thereon to him in the manner  as may be prescribed ." Rule 21 of Companies ( Management and Administration) Rules, 2014. "21 Manner in Which the Chairman of Meeting Shall Get the Poll Process Scrutinised and Report Thereon.-   (1) The Chairman of a meeting shall ensure that- (a) The Scrutinizers are provided with the Register of Members, specimen signatures of the members, Attendance Register and Register of Proxies. (b) The Scrutinizers are provided with all the documents received by the Company pursuant to  sections 105 ,  112  and  section 113 . (c) The Scrutinizers shall arrange for Polling papers and distribute them to the members and pr...

Ministry of Corporate Affairs (MCA) vide its notification dated September 20, 2017 notified the proviso Section 2(87) of the Companies Act, 2013 wef September 20, 2017.  Section 2 (87) reads as under: (87) “subsidiary company" or “subsidiary", in relation to any other company (that is to say the holding company), means a company in which the holding company— (i) controls the composition of the Board of Directors; or (ii) exercises or controls more than one-half of the total share capital   either at its own or together with one or more of its subsidiary companies: Provided that such class or classes of holding companies as may be prescribed shall not have layers of subsidiaries beyond such numbers as may be prescribed. Though, the sub-section was notified much earlier, the proviso was not notified till date. Now, on September 20, 2017. "the Central Government hereby appoints the 20th September, 2017 as the date on which proviso to clause (87) of sectio...

The Ministry of Corporate Affairs (MCA) has issued   General Circular No 10/2017   Dated 13.09.2017  and made Clarification in Rule 4 of  Companies (Indian Accounting Standards) Amendment Rules 2016. MCA has clarified that If any Holding Company is Covered by Corporate Sector Roadmap for implementing  IND AS,  then that Company shall follow the Corporate Sector Roadmap , and Such Holding Company having a Small Finance Company or Payment Bank as its  Subsidiary , Then Such Subsidiary Shall follow the Corporate Sector Roadmap and Provide Finance Statement to its holding company  For Consolidation of Financial Statement. 

SEBI in its press release dated September 18, 2017 informed that SEBI Board, has approved certain changes in the captioned regulations in order to facilitate growth of Infrastructure Investment Trusts (InvITs) and Real Estate investment Trust (REITs). Some of the major changes which, inter alia, include the following: i. Allowing REITs and InvITs to raise debt capital by issuing debt securities ii. Introducing the concept of Strategic Investor for REITs on similar lines of InvITs iii. Allowing single asset REIT on similar lines of InvIT iv. Allowing REITs to lend to underlying Holdco/SPV v. Amending the definition of valuer for both REITs and InvITs Copy of SEBI Press Release can be accessed from here .

As per section 2(68) of the companies act 2013, a private company has three restrictions in its articles of association (Articles of association or AOA are the basic documents which govern the rules and regulations of the company): The number of members shall be limited to 200. The right to   transfer the shares shall be restricted. This means that the shares can not be easily transferred. This is to ensure that the limit of maximum members do not cross 200. The company can not raise money from public by inviting them through prospectus. So, basically starting a Private company is a better option for those businesses where the capital required is not more and is contributed by selected people (not exceeding 200). The term  private  here indicates that raising money here is more of a private affair and general public is not involved. The basic difference between Private Company vis a vis Public Company is number of compliance or approval a Company required. Priv...

(Applicable for a period between 1 st  July 2017 to 31 st  December 2017) Is this examination mandated under any law and for what purpose? Yes. This examination is mandated under the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016 made under the Insolvency and Bankruptcy Code, 2016. It is one of the mandatory conditions for registration as an insolvency professional with the Insolvency and Bankruptcy Board of India (IBBI).  What are the eligibility criteria to sit for the examination? There are no eligibility criteria for appearing in the examination. However, please be informed that registration as Insolvency Professional will be governed by the regulations in force at the time of consideration of application for registration as Insolvency Professional. Case laws up to which date are covered in the syllabus? Cases up to 30 th  June, 2017 are covered in the syllabus. Which of the regulations so far...

The Ministry of Corporate Affairs has approved a request of the Malaysian Association of Company Secretaries (MACS) for adoption of the Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) as the benchmark in the development of Secretarial Standards of MACS.  The Secretarial Standards on Meetings of the Board of Directors and Secretarial Standard on General Meetings were approved by the Ministry of Corporate Affairs, Government of India under sub-section 10 of Section 118 of the Companies Act, 2013 and are in place with effect from 1st July, 2015.  It is a matter of prestige that Indian Standards are to be adopted/benchmarked by a foreign sister institution in the course of formulation of their own similar standards. 

Taking forward the initiative launched by the Government of India to curb the menace of shell companies, money laundering and black money in the country and prevent misuse of corporate structure by shell companies for various illegal purposes, the Ministry of Corporate Affairs and Central Board of Direct Taxes (CBDT) have now concluded a formal Memorandum of Understanding (MoU) for data exchange, on 6th September, 2017. The MoU will facilitate the sharing of data and information between CBDT and MCA on an automatic and regular basis. It will enable sharing of specific information such as Permanent Account Number (PAN) data in respect of corporates, Income Tax returns (ITRs) of corporates, financial statements filed with the Registrar by corporates, returns of allotment of shares, audit reports and statements of financial transactions (SFT) received from banks relating to corporates. The MoU will ensure that both MCA and CBDT have seamless PAN-CIN (Corporate Identity Number) and P...