MCA Updates
Companies (Miscellaneous) Amendments Rules, 2023 regulatory updates
The Amendment Rules have brought about revisions in the following forms:
- Form MSC-1 (Application to ROC for obtaining the status of the dormant company)
- Form MSC-3 (Return of dormant companies)
- Form MSC-4 (Application for seeking the status of an active company)
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Companies (Share Capital and Debentures) Amendment Rules, 2023
The Amendment Rules have brought about revisions in the following forms:
- Form SH-7 (Notice to Registrar of any alteration of share capital)
- Form SH-8 (Letter of offer)
- Form SH-9 (Declaration of solvency)
After the completion of the buy-back, Form SH-11 is required to be filed with the Registrar and in the case of listed companies with the Registrar and the Securities and Exchange Board of India. Form SH-15 pertaining to the Certificate of compliance in respect of the buy-back of securities has been omitted.
In this regard, the sub-rule 14 of Rule 17 has been substituted, requiring a declaration to be attached along with the Form SH-11, signed by two directors of the company including the Managing Director, if any, certifying that the buy-back of securities has been made in compliance with the provisions of the Act and the rules made thereunder.
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Companies (Management and Administration) Amendment Rules, 2023
The Amendment Rules have brought revision in the Form MGT-3 (Notice of situation or change of situation or discontinuation of situation, of place where foreign register shall be kept).
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Companies (Registration Offices and Fees) Amendment Rules, 2023
A new Rule 8A has been inserted providing for the signing of forms by the resolution professional, liquidator etc for companies undergoing the resolution process or liquidation.
The Rule provides that “e-forms wherever applicable shall be signed by Insolvency resolution professional or resolution professional or liquidator of companies under insolvency or liquidation, as the case may be, and filed with the Registrar along with the fee as mentioned in Table annexed these rules.”
Key points:
The Amendment Rules have brought about revisions in the following forms:
- Form GNL-2 (Submission of documents with the Registrar)
- Form GNL-3 (Particulars of person(s) charged for the purpose of subclause (iii) or (iv) of clause 60 of section 2)
- Form GNL-4 (Filing Addendum for rectification of defects or incompleteness)
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Companies (Incorporation) Amendment Rules, 2023
The amendments have been made to the Rules along with a revision of the following forms:
- Form INC-3 (One Person Company Nominee Consent)
- INC-14 (Declaration)
- INC-15 (Declaration)
- RD-GNL-5 (Form for filing addendum for rectification of defects or incompleteness omitted)
Forms RUN, INC-4, INC-6, INC-9, INC-12, INC-13, INC-18, INC-20, INC-20A, INC-22, INC-23, INC-24, INC-27, INC-28, INC-31, SPICE+ (INC-32), INC-33, INC-34, INC-35 and RD-1.
Key points:
- Nomination by the Subscriber or Member of One Person Company:
The name of the nominee of the owner of an OPC shall be mentioned in the memorandum of One Person Company (OPC) and such nomination details along with the consent of the such nominee shall be filled in Form INC-32 (SPICe+) as a declaration and the said Form along with the fee as provided in the Companies (Registration offices and fees) Rules, 2014 shall be filed with the Registrar at the time of incorporation of the company along with its e-MOA and e-AOA.
- Conversion of One Person Company into a Public Company or a Private company:
The company shall file an application in Form INC-6 for the conversion into a Private or Public Company, other than under section 8 of the Act, along with fees attaching the altered e-MOA and e-AOA. Once the requirements are complied with, the Registrar after examining the latest audited financial statement shall approve and issue the certificate.
- Conversion of Private company into One Person Company:
The company shall file an application in Form INC-6 along with fees attaching altered e-MOA and e-AOA, copy of NOC from creditors and affidavit from the directors confirming the members’ consent for conversion.
- Incorporation of Section 8 Companies:
The requirement of the declarations of practising professionals and persons making the application for incorporation in forms INC-14 and INC-15 has been omitted.
- License under Section 8 for Existing Companies:
The application for a license under section 8 by an existing company shall be made in Form INC-12 along with the attachments mentioned in the amended rule 20(2) of the Companies (Incorporation) Rules, 2014. Inter alia, the amendment has omitted the requirement of showing estimates of the future annual income and expenditure of the company for the next three years.
- Conditions for conversion of a Company registered under Section 8 into a Company of any other kind
An intimation along with a copy of the application with annexures as filed in Form INC-18 with the Regional Director shall also go to the Registrar through the MCA system.
- Shifting of Registered office from one State or Union Territory to another state
The Applicant/Company need not submit a separate copy of the application with the Registrar. An intimation of filing of the application in Form INC-23 with the Regional Director shall be shared with the Registrar through the MCA system.
- Alteration of Articles
For effecting the conversion of a public company into a private company, the SRN of the Form RD-1 pertaining to the order of the Regional Director approving the alteration shall be mentioned in Form INC-27.
- Conversion of an Unlimited Liability Company into a Limited Liability Company by Shares or Guarantee
The application in Form INC-27 shall be filed along with the altered e-MOA and e-AOA.
- Conversion of a Company Limited by Guarantee into a Company Limited by Shares
The company shall file an application in Form INC-27 with the Registrar of Companies within 30 days from the date of the passing of the special resolution along with the altered e-MOA and e-AOA.
- Application under sub-section (41) of section 2 for change in the financial year
Form RD GNL-5 pertaining to the rectification of defects or incompleteness has been omitted.
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Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2023
The Amendment Rules have brought about revisions in the following forms:
- Form MR.1 (Return of appointment of key managerial personnel)
- Form MR.2 (Form of application to the Central Government for approval of appointment or reappointment and remuneration or increase in remuneration or waiver for excess or overpayment to managing director or whole-time director or manager and commission or remuneration to directors)
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Amendment in the Companies (Appointment and Qualification of Directors) Rules, 2014
The salient highlights of the amendments in rule 14 are as mentioned below:
1. In sub-rule (1), “sub-section (1) or” is inserted after the words “disqualification under”;
Earlier directors were required to inform the concerned companies about disqualification under section 164(2) only.
However, after the abovementioned amendment, a declaration regarding disqualification under section 164(1) is also required to be informed to the concerned companies in Form DIR-8.
2. After sub-rule (1), the following is inserted:
“(1A) whenever a company receives the information in Form DIR-8, the company shall, within thirty days of such receipt, file Form DIR-9 with the Registrar.”
Earlier Form DIR-9 was filed only when:
- a company failed to file the financial statements or annual returns, or
- failed to repay any deposit, interest, dividend, or
- failed to redeem its debentures, as specified in section 164(2).
However, after the abovementioned amendment, the Companies are required to file Form DIR-9 even where it receives Form DIR-8 from a director regarding disqualification under section 164(1) in addition to existing requirements.
3. In sub-rule (5), “and filed before the Regional Director.” is inserted after the words, “Form DIR-10”;
Any application for removal of disqualification of directors is required to be filed before the Regional Director in Form DIR-10.
4. Further, Form DIR-3, Form DIR-3C, Form DIR-5, Form DIR-6, Form DIR-8, Form DIR-9, Form DIR-10, Form DIR-11, Form DIR-12 are amended and substituted and are available as web-based forms in V3 portal of the MCA.
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Amendment on Companies (Prospectus and Allotment of Securities) Rules, 2014
The Ministry of Corporate Affairs vide its notification dated 20th January, 2023 has amended the Companies (Prospectus and Allotment of Securities) Rules, 2014 to the Companies (Prospectus and Allotment of Securities) Amendment Rules, 2023. The same came into force with effect from 23rd January, 2023.
Key points:
The notification has omitted the requirement of attaching a copy of the resolution passed in the general meeting authorizing the issue of bonus shares to Form PAS-3 in accordance with sub-rule (6) of rule 12.
Further, Form PAS-2, Form PAS-3, Form PAS-6 are amended and substituted and are available as web based forms in V3 portal of the MCA.
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Amendment on Nidhi Rules, 2014
The Ministry of Corporate Affairs vide its notification dated 20th January, 2023 has amended the Nidhi Rules, 2014 to the Nidhi (Amendment) Rules, 2023. The same came into force with effect from 23rd January, 2023.
The notification states that in the Nidhi Rules, 2014, Form NDH-1, Form NDH-2, Form NDH-3 and Form NDH-4 are amended and substituted and are available as web based form in V3 portal of the MCA.
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Amendment on Companies (Registration of Foreign Companies) Rules, 2014
The Ministry of Corporate Affairs vide its notification dated 20th January, 2023 has amended the Companies (Registration of Foreign Companies) Rules, 2014 to the Companies (Registration of Foreign Companies) Amendment Rules, 2023. The same came into force with effect from 23rd January, 2023.
Key points:
The notification has amended sub-rule (2) clause (c) of rule 3 with respect to registering the particulars of each director and secretary or, equivalent of every foreign company with the Registrar, from “father’s name or mother’s name and spouse’s name” to “father’s name or mother’s name or spouse’s name”.
Further, Form FC-1, Form FC-2, Form FC-3, Form FC-4 are amended and substituted and are available as web based forms in V3 portal of the MCA.
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Amendment on Companies (Authorised to Register) Rules, 2014
The Ministry of Corporate Affairs vide its notification dated 19th January, 2023 has amended the Companies (Authorised to Register) Rules, 2014, to the Companies (Authorised to Register) Amendment Rules, 2023. The same came into force with effect from 23rd January, 2023.
Key points:
The salient highlights of the amendments in rule 3 are as mentioned below:
1. In accordance with sub-rule (2), clause (a), clause (b), clause (c), clause(d) in case of an application for either of the following:
- By a Limited Liability Partnership or firm for registration as a company limited by shares; or
- By a Limited Liability Partnership or firm for registration as a company limited by guarantee or as an unlimited company; or
- A society for registration as a company limited by guarantee under section 8; or
- By a trust for registration as a company limited by guarantee under section 8.
The Company is required to attach and provide the required documents and information to the Registrar in Form No. URC. 1. The following sub-clauses have been amended to substitute the requirement from “written consent or No Objection Certificate from all the secured creditors of the applicant” to “No Objection Certificate from secured creditor along -with charge holder, if applicable”.
2. Further, as per sub-clause (a) and sub-clause (b), the requirement of an undertaking that the proposed directors shall comply with the requirements of the Indian Stamp Act, 1899 (2 of 1899), as applicable; and a copy of the latest income tax return of the Limited Liability Partnership or firm, as the case may be, have been omitted.
3. Further, as per sub-clause (c) and sub-clause (d) the following requirements have been omitted:
- written consent from the majority of members whether present in person or by proxy at a general meeting agreeing for such registration, and the resolution shall also provide for declaration of the amount of guarantee and
- an undertaking that the proposed directors shall comply with the requirements of the Indian Stamp Act, 1899 (2 of 1899) as applicable and
4. In addition to the above in sub-clause (c), details of the objects of the company alongwith a declaration from all the members that the restrictions and prohibitions as mentioned in clause (b) and clause (c) of sub-section (1) of section 8 of the Act shall be complied is also omitted.
5. The requirement of a copy of the latest income tax return of the trust in accordance with sub-rule (d) also omitted.
6. To give effect to the above mentioned amendments, Form URC-1 is amended and substituted and is available as web based forms in V3 portal of the MCA.
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Amendment on Companies (Accounts) Rules, 2014
The Ministry of Corporate Affairs vide its notification dated 20th January, 2023 has amended the Companies (Accounts) Rules, 2014, to the Companies (Accounts) Amendment Rules, 2023. The same came into force with effect from 23rd January, 2023.
The notification has substituted Form AOC-5 and is currently available as web based form in V3 portal of the MCA.
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SEBI Updates
Limiting relaxation in relation to dispatch of physical copies of financial statements etc. –Regulation 58 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulation)
SEBI mandates that the entity with listed non-convertible securities shall send a hard copy of the financial statements along with all annexures, which are to be laid before a company in its general meeting, to those holders of non-convertible securities who have not registered their email address(es) either with the listed entity or with any depository.
In view of the relaxations granted by the Ministry of Corporate Affairs (MCA) from dispatching of physical copies of financial statements due in the year 2023 (i.e. till September 30, 2023), the SEBI vide its circular dated January 05, 2023 granted the relaxation w.r.t requirement of Regulation 58(1)(b) of Listing Regulations upto September 30, 2023.
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Relaxation from compliance with certain provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
The SEBI has granted various relaxations to the listed entity under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulation) during COVID-19 pandemic including the relaxation for dispatching of physical copies of the financial statements along with all annexures to those shareholders who have not registered their email addresses as per Regulation 36(1)(b) of the Listing Regulation.
Based on the representation received from listed entities and MCA circular dated December 28, 2022, SEBI vide its circular dated January 05, 2023 decided to extend the relaxations w.r.t dispatching of physical copies of Annual Report till September 30, 2023.
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Monitoring and Periodical reporting of the compliance with the requirements pertaining to ‘Security and Covenant Monitoring’ system hosted by depositories
SEBI has specified the manner of recording of charges by Issuers and manner of monitoring and other responsibilities of stakeholders for ‘Security and Covenant Monitoring’ using Distributed Ledger Technology (DLT)
SEBI vide its circular dated January 05, 2023 specified that Depositories shall ensure periodic monitoring regarding compliance with the requirements of various circulars issued in this regard and also requires Depositories to report any instances of non-compliance, on a quarterly basis, not later than one month from the end of the quarter, in the format specified in the said circular
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Extension of Timelines for Entering and Verification of the Details of the Existing Outstanding Non-Convertible Securities in the ‘Security and Covenant Monitoring’ system hosted by Depositories
SEBI vide Circular dated January 05, 2023 has extended the timelines for entering the details of the existing outstanding non- convertible securities in the “Security and Covenant Monitoring” system hosted by Depositories on or before January 31, 2023 and Debentures Trustees (DTs) shall verify the same by February 28, 2023 Also, DTs will be required to submit a fortnightly progress report on status of compliance within 5 days of the end of the fortnight.
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Operational Circular for Credit Rating Agencies
Securities and Exchange Board of India (Credit Rating Agencies) Regulations, 1999 prescribes guidelines for registration of Credit Rating Agencies (CRAs), general obligations of CRAs, manner of inspection and investigation and code of conduct applicable on CRAs. Multiple circulars have been issued, over the years, covering the operational and procedural aspects thereof.
In order to enable access to all the circular at one place, SEBI has issued the operational circular for CRAs dated January 06, 2023.
Detailed circular can be accessed by clicking the link mentioned below:
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RBI Updates
RBI rationalizes reporting Foreign Investment in Single Master Form (SMF) on FIRMS Portal
The Reserve Bank of India (RBI) on January 04, 2023, issued a notification regarding the rationalization of reporting of foreign investment in SMF on FIRMS portal. As part of this, the RBI has stated that:
- The forms submitted on the portal will be auto-acknowledged. The AD banks shall verify the same within five working days based on the uploaded documents, as specified.
- In cases of delayed reporting, the AD banks shall either advise the Late Submission Fee (LSF) to the applicants, which will be computed by the system or advise for compounding of contravention, as the case may be.
The forms submitted in FIRMS will now be processed as detailed below:
- All forms submitted with the requisite documents will be auto-acknowledged on the FIRMS portal with a time stamp and an auto-generated e-mail will be sent to the applicant.
- The forms submitted within prescribed timelines, will be verified by the AD banks based on the uploaded mandatory documents and ensure that the same are in compliance with the extant guidelines.
- The system would identify the delay in reporting, if any. For the forms filed with a delay:
| Less than or equal to three years | Greater than three years |
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- The remarks of the AD Bank for rejection of forms, if any, will be communicated to the applicant through a system generated e-mail and the same can also be viewed in the FIRMS portal.
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Income Tax Updates
Extension of time limit to March 31, 2023 in respect of compliance under Section 54 to 54GB of the Income-tax Act,1961 (‘Act’) for the period relating to April 1, 2021 to 28 February, 2022
In view of the Covid -19 pandemic and resultant restrictions imposed, the CBDT had earlier vide Circular No. 12 of 2001 dated 25 June 2021 extended the due date for compliance requirements under Section 54 to 54GB of the Act (provisions relating to capital gain exemptions) to September 30, 2021 in respect of all such compliances falling within the period April 1, 2021 to September 29, 2021.
Given the various representations received by the CBDT in respect of the genuine hardships faced by the taxpayers in meeting the compliance requirements provided under Section 54 to 54GB of the Act, the due date for such compliance is further extended to March 31, 2023 for all such compliances falling within the period April 1, 2021 to 28 February, 2022.
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E-Filing of updated Income Tax Return enabled on Income Tax Portal for AY 2022-23
Filing of updated return was introduced vide Finance Act, 2022 to facilitate tax payers to file a fresh return of income or to revise a return of income already under Section 139(1) and Section 139(4) of the Act, where the time limit to revise such return under Section 139(5) has expired, subject to meeting the conditions provided under Section 139(8A) of the Act and the payment of additional tax and interest as prescribed.
Taxpayers opting to file updated return for AY 2022-23 may now file the return, as the option for filing such return for the specified assessment year has now been enabled on the income tax portal.
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CBDT issues addendum to Notification 2 of 2021 relating to Statement of Financial Transactions (SFT) for Interest income, abolishing the limit of Rs 5,000/- for interest income paid to taxpayers
As per sub-rule (4)(b) of Rule 114E Director General of Income-tax (Systems) shall specify the procedures, data structures and standards for ensuring secure capture and transmission of data, evolving and implementing appropriate security, archival and retrieval policies.
The Remarks column point 1 at Annexure A– Guidelines for Preparation of Statement of Financial Transactions (SFT) mentioned “The information is to be reported for all account/deposit holders where cumulative interest exceeds Rs 5,0001 per person in the financial year.
The Remarks column at Annexure A is modified now to read as “The information is to be reported for all account/deposit holders where any interest exceeds zero per account in the financial year excluding Jan Dhan Accounts”.
This notification is effective from January 05, 2023 and in view of this notification, banking companies, co-operative banks, Post Master General, NBFC would be required to report details all interest income paid to taxpayers without any threshold limit.
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GST Updates
Clarifications regarding applicability of GST on certain services
As per the circular GST is applicable for services like i) accommodation services supplied by Air Force Mess to its personnel, ii) Incentive paid by Ministry of Electronics and Information Technology (MeitY) to acquiring banks under Incentive scheme for promotion of RuPay Debit Cards and low value BHIM-UPI transactions.regulatory updates
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Clarification regarding GST rates and classification of certain goods based on the recommendations of the GST Council in its 48th meeting held on 17th December, 2022
Based on the recommendations of the GST Council in its 48th meeting held on 17th December, 2022, clarifications, with reference to GST levy, related to the following are being issued through this circular.
