Why is the Companies Act being changed continuously ?

The recently decriminalised offences include administrative offences such as delays in filing CSR reports, or failure to rectify the register of members in compliance with orders from the NCLT.

Finance and corporate affairs minister  Nirmala Sitharaman on Sunday reported that the administration was moving to decriminalize arrangements of the Companies Act to improve simplicity of working together in the nation as a component of the administration Covid-19 alleviation bundle. The move, which was at first declared on March 4, is a piece of a bigger exertion by the legislature since 2018 to expel criminal punishments from all arrangements of the Companies Act, aside from arrangements managing deceitful lead.

Various offenses recently delegated compoundable offenses, for example those offenses that had either detainment or fines as disciplines have had the detainment punishment expelled. A portion of these offenses have been excluded by and large while others have been moved from the domain of the National Company Law Tribunals (NCLT) to an in-house settling instrument.

Also read this https://moderneducationofindia.blogspot.com/2020/05/complete-process-of-msme-registration.html

Why the change?

The move has been a piece of bigger government endeavors to help simplicity of working together since 2018. The as of late decriminalized offenses incorporate managerial offenses, for example, delays in documenting CSR reports, or inability to correct the register of individuals in consistence with orders from the NCLT. Specialists bring up that the decriminalization endeavors are actually a push to pull back on guidelines presented in 2014 planned for boosting corporate consistence. The administration had additionally acquainted changes with the Companies Act making infringement of the Corporate Social Responsibility (CSR) arrangements deserving of detainment however didn't operationalise the arrangement after input from industry. The Companies Act revision bill 2020 has likewise proposed to expel criminal obligation from CSR arrangements.

"With the update of Companies Act in 2013, significantly more guidelines were presented for better consistence and along these lines various corrective arrangements with both common and criminal punishments were presented accomplice at Deloitte India, taking note of that as consistence levels improved and the administration wanted to support simplicity of working together the administration began to loosen up criminal arrangements.

What is the change?

The number of compoundable offences under the Companies Act have come down to 31 from 81 prior to the 2018 amendment to the Companies Act. A number of these offences have been moved from needing to be prosecuted through the National Company Law Tribunals to being dealt with by the Registrar of Companies. The RoC is empowered to decide penalties for these offences and companies can appeal to the Regional Director (RD) of the Ministry of Corporate Affairs (MCA) to appeal or seek modifications to these decisions. This move would help free up the bandwidth of NCLTs to deal with cases dealing with insolvency and other higher priority matters. The total number offences to be dealt with the in-house adjudication mechanism has risen from 18 in 2018 to 58 proposed in the latest amendment

What could be future prospective ?

According to experts, the ministry is expected to come out with further measures to decriminalise provisions in the companies act particularly those relating to auditors. An auditor with a leading audit firm said the MCA had announced that it would move towards removing criminal liability for issues such as negligence by auditors. “The ministry said they would remove criminal liability for a number of provisions dealing with auditors.

As per specialists, the service is relied upon to come out with further measures to decriminalize arrangements in the organizations demonstration especially those related with auditors. An auditor with a audit firm said the MCA had declared that it would move towards expelling criminal obligation for issues, for example, carelessness by examiners. "The service said they would evacuate criminal obligation for various arrangements managing inspectors.

Here we can see that ministry is actively changing and analyzing the Corporate law to pull it towards simplicity and good governance. Same can be examined by various amendments has come in last few months.

 

 

 

 

 

 

What is MSME and its benefits

Any company that comes under the category of MSME needs to ensure they are registered under the MSME category. MSME registration stands for the micro small and medium enterprises registration. MSMED Act has been launched by the government of India to support the MSME through various schemes, subsidies, and incentives. With MSME Registration, banks also provide the loans at lower rate of interests.

No Fees required Registration is free of cost

MSME

 

Also read this If FCGPR rejected  https://moderneducationofindia.blogspot.com/2020/04/howto-get-approval-if-your-fc-gpr-got.html

Eligiblity Criteria for MSME Registration

MSME enterprises of the Manufacturing sector as well as Service Sector can be categorized on the basis of the amount invested in plant and machinery –

1.      Micro enterprises– Entities investing upto 1crore and turnover upto 5 crore.

2.      Small enterprises– Entities investing upto 10 crore and turnover upto 50 crore.

3.      Medium enterprises– Entities investing upto 20 crore and turnover upto 100 crore.

 

Documents Required for This Process

The following are the documents required for the registration process

1. Aadhar number of the applicant

 

2. Name, gender, PAN number, email id and mobile number of the applicant.

 

3. PAN, location, and address of the organization.

 

4. A number of employees and the date, you are planning to start your business.

 

5. Bank account number and IFSC code

 

6. The basic business activity of the enterprise

 

7. NIC 2 digit code

 

8. Investment in plant and machinery/equipment

 

9. MoA and AoA

 

10. Copies of Sales Bill and Purchase Bill

 

Step by step registration process for MSME

1. Start Registration Process

            Go to Adhaar udhyog website to start the MSME Registration Process.

 

2. Fill Application Form

            At the first step, you have to fill basic details in MSME Registration form.

 

3. Enter Personal Details

Required to fill in all your personal details such as name, address, PAN Card, bank account details registration process. Also, a photo needs to be uploaded.

4. Executive Will Process Application

At this process, an MSME executive will review your application. In case of any discrepancy, you will be notified about the process and make the relevant changes.

5. Receive Certificate of Mail

After filling the complete form you will get the certificate for MSME Registration.

 

 

 

How to get approval if your FC-GPR got rejected by RBI in case of FDI

                                     

FCGPR

When to file FC-GPR

Within 30 days of issue of securities, Company needs to file FC-GPR to RBI in Single Master Form at https://firms.rbi.org.in/firms/faces/pages/login.xhtml.

What are the Documents required for FC-GPR

1) Duly completed FC-GPR form online on FIRMS portal

2) Company Secretary Certificate

3) Declaration by the Authorized Representative of the Indian Company

4) 6 pointer KYC of Foreign Investor on Bank's letter head as per RBI format

5) Copy of FIRC with endorsement

6) If excess/shortage amount received, declaration on company's letter head for the status of excess/shortage amount

7) CA certificate on CA's letter head with firm Reg. No. & Membership No. of CA indicating the manner of arriving at the price of the shares issued to the persons resident outside India (CA certificate must be prior to the date of issue of shares)

8) Debit authority letter to collect AD charges for filling of FC-GPR

9) True Copy of the Board Resolution of the Indian Company (Only the relevant extracts)

10) In case of delay, reason for delay

Possible Queries Can be raised by RBI

1) There is a mismatch in the date of remittance as provided in Form FC-GPR with FIRC

 2) There is a mismatch in the date of remittance as mentioned in Form FC-GPR with FIRC ( In case of multiple FIRCS please mention the earliest date )

3) Endorsement on FIRC obtained from ICICI branch only specifically mentioning total amount received minus amount utilised in share allotment equal to Balance (in INR only) not provided

4) In case of valuation certificate please mention SEBI REGN

5) Please provide debit authorization letter. The applicable charges is Rs.5000+ GST.( Only applicable in case of ICICI Bank not for other Banks)

6) Please provide authorized representative declaration as per FIRMS user manual.

7) Please provide excess inward remittance declaration.( if any)

8) Please provide board resolution passed for allotment of shares.

9) Please provide Delay Reason

Note 1: I have observed so many rejected cases of FC-GPR and Found the above mentioned queries has been raised by RBI/AD end no of times.

Note 2: Many times we see that after complying all the requirements of RBI still FC-GPR got rejected. This problem arises from Ad Bank side even a minor negligence from issuer side can be rejected. In case you are getting continuous rejections for same. You should contact with your AD bank Because sometimes we need to clarify few things to AD bank personally for which is he is not getting convinced.

It is advisable every time when you file FC-GPR ( keep all above documents ready with yourself) try to resolve above queries at prima facie.

In case of any query post down comment below.

FORMATS FOR DEMATERIALISATION OF SECURITIES

   Appointment letter for DP and RTA

                            

    (To be given on company’s letterhead)

To

Name of DP and RTA.

Address of RTA

Sub: Appointment as Share Transfer Agent

Dear Sir,

This is with reference to your proposal dated ___________ to act as Transfer Agent in Physical and Electronic mode. We are pleased to appoint you as our Share Transfer Agent w.e.f. _________.

Thanking you

For ___________________Ltd.

(Director)

                CTC of Board Resolution

(Should be signed by the Company Secretary or MD or any Director)

EXTRACT OF THE MINUTES OF THE MEETING OF THE BOARD OF DIRECTORS OF _______________ DULY CONVENED AND HELD ON ___________ AT _______ .

“RESOLVED THAT the Company do seek admission of the Company’s securities in the Depository system of Central Depository Services (India) Limited to dematerialize the certificates of the shareholders of the Company who may wish to do so”.

“RESOLVED FURTHER THAT the Company appoints ___________  as the Registrar & Transfer Agent (RTA) for the Depository upon such terms and conditions as may be approved”.

“RESOLVED FURTHER THAT Mr./Ms. ______ and/or Mr./Ms. ________ of the company be and are hereby severally authorized to do all such acts and deeds as may be required and to accept/reject, demat/remat request of the Company and to sign all such papers and documents as may be necessary to implement the decision”.

Signature of authorized persons:

Sr. No.	Name of the Authorized Signatory	Designation	Specimen Signature
1.		Director
2.		Director

The resolution was passed unanimously.

Signature with stamp

Name                        : ______

Designation          : Director

Date  :

Place            :

Read complete article for process of Demat of Securities: https://moderneducationofindia.blogspot.com/2020/04/checklist-for-dematerialisation-of.html

                

                      
Declaration from issuer and RTA to Depository

                                                                                                      Declaration

To,                                                                                                                               Date:

Central Depository Services (India) Limited

Marathon Futurex, A-Wing,

25^th Floor, NM Joshi Marg, Lower Parel

Mumbai-400013

Kind Attn:  AVP – Issuer Admission Cell

Dear Sir,

We hereby declare that __________(Name of Company) has appointed M/s ____________ as Registrar & Transfer Agent for providing electronic connectivity and to handle work related to transfer of physical securities, maintenance of records of the holders of securities of the aforesaid company as per Regulations of 53A of Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996 and this arrangement will not be discontinued during the currency of the tri-partite agreement entered into/to be entered into with CDSL.

We further declare that as per the procedure for dematerialization of physical security certificate(s) formulated by us, the physical security certificate(s) should be forwarded to the following address for the purpose of dematerialization of the same.

Name of the Contact Person	:
Designation	:
Name of the Organization	:
Address of the Organization	:
Telephone	:
Fax	:
E-mail	:

Yours faithfully,                                                               

For  ____Name of RTA)                                                              For ____( Name of Company)

                                                                                                                                                                                                               

_____________

(Director)                      (Authorized Signatory)

                                               

                     Networth Certificate

(On the letterhead of Practicing Chartered Accountant/ Practicing Company Secretary)

This is to certify that Networth of ___________________ having Corporate Identification No __________________ and having its registered office address at ____________  has been calculated as under:

Networth as on #: DD/MM/YYYY

Particulars	Amount (in Rs.)
Paid up Capital
Add: Reserve & Surplus
Less: Accumulated losses, if any
Less: Miscellaneous Expenditure
Total Networth

Book Value per share (in Rs.) Total Networth / Total number of outstanding shares

Rs.__________________

# Networth to be calculated as per latest audited  financial statement.

This is to certify that the above mentioned information is true to the best of my knowledge and belief, according to the books and documents produced before me for verification.

                                                                                                                ______________________

Signature

                                                                                                                Name:

               

                                                                                                               Designation:  

                                                                                                      Membership Number:

                                                                                                       Stamp

Place: ______________

Date: ______________

                                    
   Format for undertaking of company

UNDERTAKING ON THE LETTER HEAD OF UNLISTED PUBLIC LIMITED COMPANIES

We ____________________--, an unlisted Public Limited Company incorporated under the Companies Act, 1956, (hereinafter called “the Company”) are desirous to admit our equity shares for dematerialization with Central Depository Services (India) Limited (hereinafter called “CDSL”).

We hereby confirm and undertake:

1. That the Company shall at all times ensure that the provisions of the Companies Act 2013, Securities and Exchange Board of India Act, 1992 and SEBI (Depositories and Participants) Regulations 1996 and all other applicable Rules and Regulations including those made by SEBI from time to time relating to the admission/issuance allotment, transfer, dematerialization and dematerialization etc are duly complied with and shall further ensure that the Company duly observes and performs all its obligations there under.

2. The Company shall regularly and diligently reconcile its dematerialized and physical securities and shall in particular ensure that the aggregate of, (i) the dematerialized securities (in all depositories taken together) and (ii) those held in physical form and those pending dematerialization does not exceed the issued capital of the Company.

    

The Company agrees, declares and confirms that the reconciliation of its securities (including dematerialized securities) is the sole obligation of the Company and its RTA, if any, and the Company shall not look to CDSL or hold CDSL liable or responsible in this behalf.

3.  The Company agrees and undertakes to indemnify and keep indemnified and harmless CDSL, its Directors and employees, from and against any and all liability resulting from claims, demands, penalties, suits and judgments and all costs, charges and expenses relating thereto as a result of a breach by the Company of its covenants as stated hereinabove.

Yours faithfully,

For _________________________-

(Signature)

Designation

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