Cochin_15032019.pptx

RECENT AMENDMENTS
COMPANIES ACT 2013.

Companies (Incorporation) Amendment
Rules, 2019(21st February, 2019)
25A. Active Company Tagging Identities and Verification (ACTIVE)
 Shall come into force with effect from 25th February, 2019
 shall file the particulars of the company and its registered office.
 Provided that any company which has not filed its due financial statements
under section 137 (Financial Statements)
 returns under section 92 (Annual Return) or both with the Registrar shall be
restricted from filing e-Form-ACTIVE
 shall be marked as
 “ACTIVE-non-compliant” on or after 26th April, 2019 and shall be liable for
action under sub-section (9) of section 12 of the Act:

 Provided also that no request for recording the following
events changes shall be accepted by the Registrar from
such companies marked as “ACTIVE-non-compliant”,
unless “ e-Form ACTIVE” is filed:
 (i) SH-07 (Change in Authorized Capital);
 (ii) PAS-03 (Change in Paid-up Capital);
 (iii) DIR-12 (Changes in Director except cessation);
 (iv) INC-22 (Change in Registered Office);
 (v) INC-28 (Amalgamation, de-merger)

 Applicable to:
Every company incorporated on or before the 31st December, 2017
 e-form ACTIVE (INC-22A) is to be used
 Photograph of Registered Office showing external building and inside
office also showing therein at least one director/KMP who has affixed
his/her Digital Signature to this form.
 Need to provide - Latitude Longitude of the building
 OTP verification of e mail Id
 26th April, 2019 is the last date
 Penalty – Rs.10000/- there after

Companies (Incorporation)Fourth
Amendment Rules, 2018.
 NOTIFICATION
 New Delhi, the 18th December, 2018
 The Companies (Amendment) Second Ordinance 2019 dated 21st February
2019
 Ordinance signed by President on 2nd November 2018, hence presumed
effective date is 2nd November 2018
 Inserted Sec. 10 A – Not commence business or exercise any borrowing power
unless
Declaration at the time of commencement of business.

Companies (Incorporation)Fourth
 Form No.INC-20A shall be filed as provided in the Companies (Registration
Offices and Fees) Rules, 2014 and
 The contents of the said form shall be verified by a Company Secretary or a
Chartered Accountant or a Cost Accountant, in practice:
 Board Resolution is to be passed pursuant to Section 11 of the Companies Act
2013, confirmation from the Board of Directors of the Company that the
Company has received the Subscribed money towards the Subscribed Capital
of Rs. ………….
 Declaration cum affidavit made by the First Directors that
 the company has received the subscribed capital of Rs…………. by its directors
in full by way of cash and in-kind as required for commencement of business.

Consequences of Not Filing Certificate of
Commencement of Business
 Form INC 20 A shall be filed within 180 days of incorporation.
 Any Default company shall be liable to pay penalty of Rs.50000/- and every
officer who is in default shall be liable to penalty of Rs.1000/- for each day
during which such default continues but not exceeding Rs.100000/-.
 Removal of name from register of companies: As per section 11(3) where no
declaration has been filed with the Registrar within a period of 180 days of
the date of incorporation of the company and the Registrar has reasonable
cause to believe that the company is not carrying on any business or
operations, he may, without prejudice to the provisions of section 11(2),
initiate action for the removal of the name of the company from the register
of companies under Chapter XVIII.

 Section 77- Charge Creation:
 (a) In case of charges created before the commencement of the Companies
(Amendment) Second Ordinance, 2019, within a period of three hundred days
of such creation
 Or
 In case of charges created on or after the commencement of the Companies
(Amendment) Second Ordinance, 2019, within a perid of 60 days of such
creation.

 Section 2 (41)a – Different Financial year
 Provided that where a company or body corporate which is holding company
or a subsidiary or associate company of a company incorporated outside India
and is required to follow a different financial year for consolidation of its
accounts outside India, the Central Government may, on an application made
by that company or body corporate in such form and manner as may be
prescribed, allow any period as its financial year whether or not that period is
a year

 Section 92 (5):
 If a company fails to file its annual return under sub-section(4), before the
expire of the period specified therein, such company and its every officer
who is in default shall be liable to penaly of Rs.50000/- and in case of
continuing failure, with a further penalty of Rs.100/- for each day during
which such failure continues, subject to a maximum of Rs. 5 Lakh
 Section 102 (5) – Statement to be annexed to Notice
 If any default is made in complying with the provisions of this section, every
promoter, director, manager or other KMP of the company who is in default
shall be liable to a penaly of Rs.50000/- or five times the amount of benefit
accuring to the promoter, director manager or other KMP or any of his
relatives, which is higher.

 Section 117(2)
 If a company fails to file the resolution or the agreement under sub section
(1) before the expiry of the period specified therein, such company shall be
liable to a penalty of one lakh rupees and in case of continuing failure., with
a further penalty of five hundred rupees for each day after the first during
which such failure continues, subject to a maximum of Rs. 25 Lakh and every
officer of the company who is in default including liquidator of the company,
if any shall be liable to penalty of fifty thousand rupees and in case of
continuing failure, with a further penalty of five hundred rupees for each day
after the first during which such failure continues, subject to a maximum of
five lakh rupees.

Companies (Acceptance of Deposits)
Amendment Rules, 2019
 22th January, 2019
 Every company other than Government company shall file a onetime return of
outstanding receipt of money or loan by a company but not considered as
deposits, in terms of clause (c) of sub-rule 1 of rule 2 from the 01st April,
2014 to the date of publication of this notification in the Official Gazette, as
specified in Form DPT-3 within ninety days from the date of said publication
of this notification along with fee as provided in the Companies (Registration
Offices and Fees) Rules, 2014.”.
 Last date : 21st April 2019.
 Form DPT-3 shall be used for filing return of deposit or particulars of
transaction not considered as deposit or both by every company other than
Government company

Companies (Acceptance of Deposits)
Amendment Rules, 2019
 In terms of clause (c) of sub-rule 1of rule 2 from the 01 April, 2014 to the
date of publication of this notification in the Official Gazette, as specified in
Form DPT-3 within ninety days from the date of said publication of this
notification along with fee as provided in the companies (Registration offices
and Fees) Rules, 2014.
 Filing Annual Return of deposit (to furnish information on deposits as on 31st
March of every financial year, which needs to be submitted on or before 30th
June of every year
 In both the case form DPT-3 is to be filed.

e-Form DIR-3 KYC under rule 12A
 Every Director to whom DIN has been allotted for
updating directors’ database with MCA
 On or before 30th April 2019.
 Rs.5000/- penalty thereafter.

Companies (Significant Beneficial Owners)
 Notification dated 08.02.2019
 "Control" means control as defined in clause (27) of section 2 of the
Act.’
 Re-iterating section 2(27) of the Act for convenience:-
 "Control" shall include the right to appoint majority of the directors
or to control the management or policy decisions exercisable by a
person or persons acting individually or in concert, directly or
indirectly, including by virtue of their shareholding or management
rights or shareholders agreements or voting agreements or in any
other manner

 Majority stake:- The definition of majority stake has been inserted in the SBO
Rules in rule 2 clause (d), which define it as:-
 i. “holding more than one-half of the equity share capital in the body
corporate; or
 ii. holding more than one-half of the voting rights in the body corporate; or
 iii. having the right to receive or participate in more than one-half of the
distributable dividend or any other distribution by the body corporate”.

 Reporting Company:
 ‘"Reporting company" means a company as defined in
clause (20) of section 2 of the Act, required to comply
with the requirements of section 90 of the Act.’

Significant Beneficial Owner (SBO):-
 ”significant beneficial owner”, in relation to a reporting company means an
individual referred to in sub-section (1) of section 90, who acting alone or
together, or through one or more persons or trust, possesses one or more of
the following rights or entitlements in such reporting company, namely:-
 (i) holds indirectly, or together with any direct holdings, not less than ten
per cent. of the shares;
 (ii) holds indirectly, or together with any direct holdings, not less than ten
per cent. of the voting rights in the shares;
 (iii) has right to receive or participate in not less than ten per cent. of the
total distributable dividend, or any other distribution, in a financial year
through indirect holdings alone, or together with any direct holdings;
 (iv) has right to exercise, or actually exercises, significant influence or
control, in any manner other than through direct holdings alone:

 Significant influence:- Significant influence has been
defined in rule 2 clause (i) to mean:-
 ‘The power to participate, directly or indirectly, in the
financial and operating policy decisions of the reporting
company but is not control or joint control of those
policies'.

2A. Duty of the reporting company
 (1) Every reporting company shall take necessary steps to find out if there is
any individual who is a significant beneficial owner, as defined in clause (h) of
rule 2, in relation to that reporting company, and if so, identify him and cause
such individual to make a declaration in Form No. BEN-1.
 (2) Without prejudice to the generality of the steps stated in sub-rule (1),
every reporting company shall in all cases where its member (other than an
individual), holds not less than ten per cent. of its:-
 a) shares, or
 b) voting rights, or
 c) right to receive or participate in the dividend or any other distribution
payable in a financial year, give notice to such member, seeking information
in accordance with sub-section (5) of section 90, in Form No. BEN-4.

Declaration of significant beneficial
ownership under section 90:- [Rule 3]
 Filing of declaration in BEN-1 (On commencement of Amendment Rules) :-
On the date of commencement of the Companies (Significant Beneficial
Owners) Amendment Rules, 2019, every individual who is a significant
beneficial owner in a reporting company, shall file a declaration in Form No.
BEN-1 to the reporting company within ninety days from such commencement
 Filing of declaration in BEN-1 (Subsequent to commencement of
Amendment Rules):- Every individual, who subsequently becomes a
significant beneficial owner/ or where his significant beneficial ownership
undergoes any change shall file a declaration in Form No. BEN-1 to the
reporting company, within thirty days of acquiring such significant beneficial
ownership or any change therein.

Return of significant beneficial owners in
shares (BEN-2):- [Rule 4]
 Upon receipt of declaration under rule 3, the reporting company shall
file a return in Form No. BEN-2 with the Registrar in respect of such
declaration, within a period of thirty days from the date of receipt of
such declaration by it, along with the fees as prescribed in Companies
(Registration offices and fees) Rules, 2014.
 Reporting Company shall maintain the register of SBO in form BEN 3

Application to the Tribunal:- [Rule 7]
 “The reporting company shall apply to the Tribunal:
 (i) where any person fails to give the information required by the notice in Form
No. BEN-4, within the time specified therein; or
 (ii) where the information given is not satisfactory,
 in accordance with sub-section (7) of section 90, for order directing that the
shares in question be subject to restrictions, including –
 (a) restrictions on the transfer of interest attached to the shares in question;
 (b) suspension of the right to receive dividend or any other distribution in
relation to the shares in question;
 (c) suspension of voting rights in relation to the shares in question;
 (d) any other restriction on all or any of the rights attached with the shares in
question.”

National Financial Reporting Authority
Rules, 2018.
 13th November, 2018
 “Authority” means the National Financial Reporting Authority
constituted under sub-section (1) of section 132 of the Act;

Classes of companies and bodies
corporate governed by the Authority
 The Authority shall have power to monitor and enforce compliance with
accounting standards and auditing standards, oversee the quality of service
under sub-section (2) of section 132 or undertake investigation under sub-
section (4) of such section of the auditors of the following class of companies
and bodies corporate, namely:-
 (a) companies whose securities are listed on any stock exchange in India or
outside India;
 (b) unlisted public companies having paid-up capital of not less than rupees
five hundred crores or having annual turnover of not less than rupees one
thousand crores or having, in aggregate, outstanding loans, debentures and
deposits of not less than rupees five hundred crores as on the 31st March of
immediately preceding financial year;

 (c) insurance companies, banking companies, companies engaged in the
generation or supply of electricity, companies governed by any special Act for the
time being in force or bodies corporate incorporated by an Act in accordance with
clauses (b), (c), (d), (e) and (f) of sub-section (4) of section 1 of the Act;
 (d) any body corporate or company or person, or any class of bodies corporate or
companies or persons, on a reference made to the Authority by the Central
Government in public interest; and
 (e) a body corporate incorporated or registered outside India, which is a subsidiary
or associate company of any company or body corporate incorporated or
registered in India as referred to in clauses (a) to (d), if the income or networth of
such subsidiary or associate company exceeds twenty per cent. of the consolidated
income or consolidated networth of such company or the body corporate, as the
case may be, referred to in clauses (a) to (d).

 (2) Every existing body corporate other than a company governed by these
rules, shall inform the Authority within thirty days of the commencement of
these rules, in Form NFRA-1, the particulars of the auditor as on the date of
commencement of these rules.
 (3) Every body corporate, other than a company as defined in clause (20) of
section 2, formed in India and governed under this rule shall, within fifteen
days of appointment of an auditor under sub-section (1) of section 139,
inform the Authority in Form NFRA-1, the particulars of the auditor appointed
by such body corporate:
 (4) A company or a body corporate other than a company governed under this
rule shall continue to be governed by the Authority for a period of three years
after it ceases to be listed or its paid-up capital or turnover or aggregate of
loans, debentures and deposits falls below the limit stated therein.

 Monitoring and enforcing compliance with accounting standards.
 (1) For the purpose of monitoring and enforcing compliance with accounting
standards under the Act by a company or a body corporate governed under
rule 3, the Authority may review the financial statements of such company or
body corporate, as the case may be, and if so required, direct such company
or body corporate or its auditor by a written notice, to provide further
information or explanation or any relevant documents relating to such
company or body corporate, within such reasonable time as may be specified
in the notice

Functions and duties of the Authority.
 (1) The Authority shall protect the public interest and the interests of
investors, creditors and others associated with the companies or
bodies corporate governed under rule 3 by establishing high quality
standards of accounting and auditing and exercising effective
oversight of accounting functions performed by the companies and
bodies corporate and auditing functions performed by auditors.

Functions and duties of the Authority.
 (2) In particular, and without prejudice to the generality of the foregoing, the Authority shall:
 (a) maintain details of particulars of auditors appointed in the companies and bodies
corporate specified in rule 3;
 (b) recommend accounting standards and auditing standards for approval by the Central
Government;
 (c) monitor and enforce compliance with accounting standards and auditing standards;
 (d) oversee the quality of service of the professions associated with ensuring compliance with
such standards and suggest measures for improvement in the quality of service;
 (e) promote awareness in relation to the compliance of accounting standards and auditing
standards;
 (f) co-operate with national and international organisations of independent audit regulators
in establishing and overseeing adherence to accounting standards and auditing standards; and
 (g) perform such other functions and duties as may be necessary or incidental to the
aforesaid functions and duties.

Punishment in case of
non-compliance.-
If a company or any officer of a company or an auditor or
any other person contravenes any of the provisions of these
rules, the company and every officer of the company who is
in default or the auditor or such other person shall be
punishable as per the provisions of section 450 of the Act.

Specified Companies (Furnishing of
information about payment to micro and
small enterprise suppliers) Order, 2019.
 the Central Government vide notification number S.O. 5622(E), dated the 2nd
November, 2018 has directed that 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) (hereafter referred to as “Specified
Companies”), shall submit a half yearly return to the Ministry of Corporate
Affairs stating the following:
 (a) the amount of payment due; and
 (b) the reasons of the delay;

Specified Companies (Furnishing of
information about payment to micro and
small enterprise suppliers) Order, 2019.
 It shall come into force from the date of its publication in the Official
Gazette. Ie. 22nd January, 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 this order within thirty days from the date of publication of
this notification.
 Every specified company shall file a return as per MSME Form I annexed to
this Order, by 31st October for the period from April to September and by
30th April for the period from October to March.
 Form to be used :MSME FORM I

Companies (Adjudication of
Penalties) Amendment Rules, 2019.
 shall come into force on the date of their publication in the Official
Gazette:19th February, 2019
 Adjudication of Penalties.
 (1) The Central Government may appoint any of its officers, not below the
rank of Registrar, as adjudicating officers for adjudging penalty under the
provisions of the Act
 (2) Before adjudging penalty, the adjudicating officer shall issue a written
notice(not being less than fifteen days and more than thirty days from the
date of service thereon),
 (3) Every notice issued under sub-rule (2), shall clearly indicate the nature of
non-compliance or default under the Act alleged to have been committed

 (4) The reply to such notice shall be filed in electronic mode only within the
period as specified in the notice :
 (5) If, after considering the reply submitted by such company, its officer, or
any other person, as the case may be, the adjudicating officer is of the
opinion that physical appearance is required, he shall issue a notice, within a
period of ten working days from the date of receipt of reply fixing a date for
the appearance of such company, through its authorised representative, or
officer of such company, or any other person, whether personally or through
his authorised representative :

 (7) The adjudicating officer shall pass an order,-
 (a) within thirty days of the expiry of the period referred in sub-rule (2) or of
such extended period as referred therein, where physical appearance was not
required under sub-rule (5);
 (b) within ninety days of the date of issue of notice under sub-rule (2), where
any person appeared before the adjudicating officer under sub-rule (5):

 (12) While adjudging quantum of penalty, the adjudicating officer shall have due regard to the
 following factors, namely:-
 (a) size of the company;
 (b) nature of business carried on by the company;
 (c) injury to public interest;
 (d) nature of the default;
 (e) repetition of the default;
 (f) the amount of disproportionate gain or unfair advantage, wherever quantifiable, made as a
 result of the default; and
 (g) the amount of loss caused to an investor or group of investors or creditors as a result of the
 default:

Companies (cost records and audit)
 come into force on the date of their publication in the official Gazette : 3rd
December 2018:
 Unit of Measurement (UOM).
 The Unit of Measurement (UOM) for each Customs Tariff Act Heading,
wherever applicable, shall be the same as provided for in the Customs Tariff
Act, 1975 (51 of 1975) corresponding to that particular Customs Tariff Act
Heading.”

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