JMJA and Associates LLP

The President of India has given his assent today to  the Ordinance to amend the Insolvency and Bankruptcy Code, 2016 (the Code).  The Ordinance aims at putting in place safeguards to prevent unscrupulous, undesirable persons from misusing or vitiating the provisions of the Code. The amendments aim to keep out such persons who have wilfully defaulted, are associated with non-performing assets, or are habitually non-compliant and, therefore, are likely to be a risk to successful resolution of insolvency of a company. In addition to putting in place restrictions for such persons to participate in the resolution or liquidation process, the amendment also provides such check by specifying that the Committee of Creditors ensure the viability and feasibility of the resolution plan before approving it. The Insolvency and Bankruptcy Board of India (IBBI) has also been given additional powers The  Ordinance amends sections 2, 5, 25, 30, 35 and 240 of the Code, and inse...

While there are confusion prevailing over What next after disqualification of Directors? MCA is yet to come out with any official clarification on it. There are many companies which are affected due to the steps taken by MCA. While, the action by MCA was very clear that all the Directors who are disqualified will not be able to work as a Director and their respective DIN will be disabled for a period of 5 years. Many senior professionals have opined that such disqualification will not amount to automatic vacation of office of directorship from other companies.  While we await further clarification from MCA on its stand on disqualification of Directors under Section 164 and disability of DIN. The notice at ROC office makes one thing clear, an Active Company (the one that is not struck off by ROC), can appoint new Director on their Board from Back end. While generally appointing a Director in active company is simple and can be given effect by filing eForm DIR-12 i...

Around 2.24 lakh companies have been struck-off till date for remaining inactive for a period of two (2) years or more;. Around 3.09 lakh Directors disqualified who were on the Board of Companies that have failed to file Financial Statements and/or Annual Returns for a continuous period of three (3) financial years during 2013-14 to 2015-16. Over 3,000 disqualified Directors are Directors in more than 20 companies each, which is beyond the limit prescribed under the Law; To address the criminality angle, the Director, Additional Director or Assistant Director of SFIO have been recently authorized to arrest any person believed to be guilty of any fraud punishable under the Act; Steps are underway for setting-up National Financial Reporting Authority (NFRA), an independent body, to test check Financial Statements, prescribe Accounting Standards and take disciplinary action against errant professionals;. A separate initiative is underway to develop a State-of-the-Art software applicat...

Atyati Technologies Private Limited (The Company) was incorporated under Companies Act, 1956 as a Private Limited Company with Registered Office in Bangalore. The Paid-up capital of the Company was Rs. 8.81 Crores. As per Rule 8A, it is mandatory for every company to appoint a Company Secretary in all the Companies having Paid up capital of Rs. 5 Crores or more. The Company filed a suo-motto filed a petition under Section 203 of the Companies Act, 2013 (The Act) read with Rule 8A of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 with a prayer for compounding violation committed under Section 441 of the Act. The Company pleaded that though since the commencement of new Companies Act, 2013, i.e. April 01, 2014 the Company could not appoint any Professional as a CS as no CS was willing to work with the Company as Company being a Private Limited Company there was very limited scope of work. As per Section 203 (5), if a company contravenes the provision...

With respect to transfer of shares to IEPF Authority ,  the  Ministry of Corporate Affairs has issued General Circular No. 12/2017 dated 16 th October, 2017. In terms of Rule 6 of the  Investor Protection and Education Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016,  as amended from time to time, where the seven year period provided under section 124(5) of the Companies Act, 2013 is completed during 7th September, 2016 to  31st October, 2017 , the due date for transfer of such shares by companies shall be 31 st  October, 2017. The following clarifications have been made in the abovementioned circular: Demat accounts have been opened by IEPF Authority with NSDL and CDSL through their depository participant; The said demat accounts will have features and functionality to support IEPF operations through paperless and digital processes; Companies required to transfer shares in such account shall do so whether such shares are held ...

Disqualification of Directors - Current status: While there are confusion prevailing over What next after disqualification  of Directors? MCA is yet to come out with any official clarification on it. There are many companies which are affected due to the steps taken by MCA. While, the action by MCA was very clear that all the Directors who are disqualified will not be able to work as a Director and their respective DIN will be disabled for a period of 5 years. Many senior professionals have opined that such disqualification will not amount to automatic vacation of office of directorship from other companies. However, looking at the action taken by MCA, as of now it is clear that, disqualification will amount to vacation of office and Director will not able to act as a Director in any other Company. Though, MCA has not expressly clarified on the point, they have put up a notice, expressly prohibiting disqualified Directors from signing any forms to be submitted with MCA. Ca...

The “Secretarial Standard on Meetings of the Board of Directors” (SS-1), formulated by the Secretarial Standards Board of the Institute of Company Secretaries of India (ICSI) and issued by the Council of the ICSI, has been approved by the Central Government. Adherence to SS-1 is mandatory in terms of sub–section (10) of Section 118 of the Companies Act, 2013 (Act). The first version of SS-1 was applicable to Meetings of the Board of Directors and its Committees, in respect of which Notices were issued between 1st July, 2015 to 30th September, 2017. The revised version of SS-1 applies to Meetings of the Board of Directors and its Committees, in respect of which Notices are issued on or after 1st October, 2017. SS-1 prescribes a set of principles for convening and conducting Meetings of the Board of Directors and matters related thereto. Guidance Note sets out the explanations, procedures and practical aspects in respect of the provisions contained in revised SS-1 (effective from 1s...