Tag Archives: ROC

“APPOINTED DATE” IN CASE OF MERGER AND AMALGAMATION

The Ministry of Corporate Affairs (the MCA) vide its notification dated 21 August 2019, has provided a clarification with respect to interpretation of section 232(6) of the Companies Act (Act). Section 232(6) of the Act states that the scheme under section 232 of the Act shall clearly indicate an appointed date from which it shall be effective and the scheme shall be deemed to be effective from such date and not at a date subsequent to the appointed date. The circular has been brought in furtherance of several queries which have been received by MCA. The two important clarification sought are:

  1. Whether it is mandatory to indicate a specific calendar date as ‘appointed date’ in the scheme? and
  2. Whether the ‘acquisition date’ for the purpose of Ind-AS 103 (Business combinations) would be the ‘appointed date’ referred to in section 232(6)?

Prior to issuance of the aforementioned clarification for the first query, the MCA has referred to decision of Supreme Court in the case of  Marshall Sons & Co. India Ltd. v. lTO [223 lTR 809] where the court held that the date on which the amalgamation shall take place can be a date prior the filing of the sanctioning of the scheme by the Court, the date of filing of certified copies of the orders of the Court before the Registrar of Companies (the ROC) (i.e. Appointed Date). However, the scheme would be effective from the Appointed Date only after the order of the Court is filed with the RoC. The MCA also referred to the judgement held in Equitas Housing Finance Limited and Equitas Micro Finance Limited in C.P.Nos.l 19 to 121 of 2016 where the court was the of opinion that appointed date need not necessarily be a calendar date but can be a date tied to the occurrence of a relevant event.

Section 232(6) provides the companies a choice to decide and state a date from which the scheme shall be enforceable. The two options available while deciding the date are:

(i) a specific calendar date, or

(ii) date tied to the occurrence of an event such as of license by a competent authority or fulfilment of any preconditions agreed upon by the parties or meeting any other requirement as agreed upon between the parties, etc., which are relevant to the scheme.

In case the parties to the scheme of merger/amalgamation choose the ‘appointed date’ to be a calendar date, such date can be a date preceding the date of filing the scheme with National Company Law Tribunal. If the ‘appointed date’ is significantly dated beyond a year from the date of filing the scheme, a reason for the same has to be specifically captured in the scheme and such reason shall not be against public interest. Where the ‘appointed date’ is date tied to the occurrence of a relevant event to the scheme, such an event shall be specifically indicated in the scheme on the occurrence of which the scheme would be effective. However, in a situation where ‘appointed date’ is a date subsequent to the date of filing the order with the ROC under section 232(5) of the Act, the company has an obligation to file an intimation of the same with ROC within 30 days of such scheme coming into force and being effective.

With regard to the second query, the MCA states that the ‘acquisition date’ shall be same as ‘appointed date’ mentioned under the scheme and shall also be deemed to be the date of transfer of control for the purpose of conforming to accounting standards (including Ind-AS 103 Business Combinations).

Source: http://www.mca.gov.in/Ministry/pdf/GeneralCircular_21082019.pdf

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Clarification on Form ADT-1 (Form for Appointment of Auditor) filed through GNL-2 during the period 1 April 2014 to 20 October 2014

The Ministry of Corporate Affairs (the MCA) had received representation from various stakeholders seeking for relaxation from payment of additional fee specifically with respect to filing e-form ADT-1 which was filed through Form GNL-2 during the period from 1 April 2014 to 20 October 2014 for appointment of Auditors for the period 2014 to 2019 as the e-form ADT-1 was not available for filing during the said period and consequent to this, companies were facing difficulties in filling the details of Auditor in e-form INC-22A Active (One time return to be filed by companies on details of registered office of the Company).

MCA has considered the matter and issued a General Circular on 13 May 2019 clarifying  that the companies which had filed Form ADT-1 through form GNL-2 during non-availability of e-form ADT-1 i.e, from 1 April 2014 to 20 October 2014 may file e-form ADT-1 for appointment of Auditor for the period upto 31 March 2019 without any fee till 15 June 2019.

Further, the Companies which had filed form ADT-1 through e-form GNL-2 even after the deployment of e-form ADT-1 will have to file the e-form ADT-1 now with additional fee.

Source: http://www.mca.gov.in/Ministry/pdf/GeneralCircular13052019.pdf

Changes in the process of Strike-off of the Companies

The Ministry of Corporate Affairs (“MCA”) on 8 May, 2019 has notified the Companies (Removal of Names of Companies from the Register of Companies) Amendment Rules, 2019 (“Amendment Rules”) which shall come into effect from 10 May, 2019. The Amendment rules provides for the following changes:

(a) Explicit requirement of filing the Annual Forms

(i) The MCA vide this amendment has clarified that Companies have to file their overdue returns in AOC-4, AOC-4 XBRL and MGT-7 before filing an application in Form No. STK-2 with the Registrar of Companies (the RoC).

(ii) Company shall not be able to file Form No. STK-2, once it has received the notice of strike-off in Form No. STK-7 from the RoC.

(iii) The statutory fee for making an application for strike off has been increased to INR 10,000.

(b) List of documents to be filed with the RoC.

The application for removing the name of the Company from the RoC in Form No. STK-2 shall be accompanied by the following documents:

  1. indemnity bond (duly notarised) in Form STK 3;
  2. a statement of accounts containing assets and liabilities of the company made up to a day, not more than thirty days before the date of application and certified by a Chartered Accountant;
  • An affidavit in Form STK 4 by every director of the company;
  1. a copy of the special resolution duly certified by each of the directors of the company or consent of seventy-five per cent of the members of the company in terms of paid-up share capital as on the date of application;
  2. a statement regarding pending litigations, if any, involving the company.

As per the amendment rules, the aforementioned statement of accounts shall now be provided in Form No. STK-8 (the format of which has been provided in the Annexure to the principal rules).

Source: http://mca.gov.in/Ministry/pdf/AmendmentRules_08052019.pdf

Withdrawal of restriction on LLPs to carry on Manufacturing activities

The Ministry of Corporate Affairs (the MCA) had earlier issued Office Memorandum (OM) No. to all the Registrar of Companies (the RoCs) dated on 6 March 2019, instructing the RoCs to reject the applications for incorporation of Limited Liability Partnerships (the LLPs) or conversion of entities into LLPs having Manufacturing & allied activities as the business of the LLPs on the ground that manufacturing activities does not fall under the definition of `Business’ as per the Limited Liability Partnership Act, 2008.

Now the MCA has withdrawn the aforementioned OM on such restriction to the LLPs from carrying out manufacturing & allied activities with immediate effect. Consequent to this clarification, LLPs can now carry out the manufacturing & allied activities and entities carrying-out manufacturing & allied activities can also convert themselves into LLP.

Link: http://www.mca.gov.in/MinistryV2/homepage.html

Regulatory update: Amendment to Private Placement process

Prior to allotment of shares, a company has to follow the process of private placement or rights issue.

In view of resolving the ambiguities and to amend various provisions of the Companies Act 2013 (the Act), the Ministry of Corporate Affairs (“MCA”) had notified the Companies (Amendment) Act, 2017 (the Amendment Act) on 3 January 2018 to amend certain provisions of the Act. Through this Amendment Act, the MCA has revised the provisions with respect to private placement offer which is effective from 7 August 2018.

The key changes brought in through the said amendment are:

(a) Investment Money received under the private placement offer should not be used until the allotment is made and the return of allotment is filed in Form PAS 3 with the Registrar of Companies (the RoC).

(b) Return of Allotment in Form PAS-3 to be filed within 15 days from the date of allotment.

(c) Offeree under private placement shall not transfer his right to subscribe to any other person.

(d) (i) A Company need not pass any special resolution, in case of issuance of non- convertible debentures, where the amount to be raised through such non-convertible debentures is less than Total Paid-up share capital (+) Free reserves (+) Securities Premium.  (ii) In case of issuance of non- convertible debentures, where the amount to be raised through such non-convertible debentures is more than Total Paid-up share capital (+) Free reserves (+) Securities Premium, then a Company can pass one special resolution for all the offers for such debentures during the year.

(e) A private placement offer cum application letter shall be in Form PAS-4 serially numbered and addressed specifically to the person to whom the offer is made and shall be sent to him, either in writing or in electronic mode, within thirty days of recording the name in Form PAS 5.

(f) A company shall issue private placement offer cum application letter (i.e. Form PAS 4) only after the relevant resolution is been filed in Form MGT 14 with the RoC.

(g) The requirement of investment size of not less than twenty thousand rupees of face value of the securities per person has been done away with;

Source: http://www.mca.gov.in/Ministry/pdf/CommencementNoti07_08082018.pdf

 

DELEGATION OF POWERS TO REGIONAL DIRECTOR

DELEGATION OF POWERS TO REGIONAL DIRECTOR UNDER SECTION 458 OF COMPANIES ACT 2013

The MCA vide its notification dated 06 September 2017 pursuant to power vested in it under Section 458 of the Companies Act, 2013 has delegated its powers pertaining to Reduction of Share Capital to the Regional Directors (RD) at Mumbai, Kolkata, Chennai, New Delhi, Ahmedabad, Hyderabad and Shillong, the powers and functions vested in it under Sub Section (2) of Section 66 of the Companies Act 2013.

Accordingly, the RD shall give notice of every application made to it under Section 66(1) to:

  • The Central Government;
  • Registrar (ROC);
  • The Securities and Exchange Board of India (SEBI);
  • and The Creditors of the company.

It shall take into consideration, the representation made to it, if any, within three months from the date of receipt of the notice. If no representation has been received within said period, it shall be presumed that they have no objections.

Source: http://www.mca.gov.in/Ministry/pdf/Delegationpowers_07092017.pdf