CORPORATE LAW UPDATES
• List of forms providing waiver of additional fee as per Circular No. 06/2021 and 07/2021. The MCA has revised the list of forms for which additional fee waiver is made available as per Circular no. 06/2021 and 07/2021 due to COVID-19 pandemic. Further, 13 more new forms to the list have been added, namely:
i.FORM BEN-2: Return to the Registrar in respect of declaration under section 90
ii.FORM IEPF-1: Statement of amounts credited to Investor Education and Protection Fund
iii.FORM IEPF-7: Statement of amounts credited to IEPF on account of shares transferred to the fund
iv.FORM AOC-5: Notice of address at which books of account are maintained
v.FORM SH-7: Notice to Registrar of any alteration of share capital
vi.FORM CRA-2: Form of intimation of appointment of cost auditor by the company to Central Government.
vii.FORM-15: Notice for change of place of registered office
viii.FORM-4: Notice of appointment, cessation, change in name / address / designation of a designated partner or partner and consent to become a partner/ designated partner
ix.FORM-5: Notice for change of name
x.FORM-12: Form for intimating other address for service of documents
xi.FORM-22: Notice of intimation of Order of Court/ Tribunal/CLB/ Central Government to the Registrar
xii.FORM-29 LLP: Notice of
(A) alteration in the certificate of incorporation or registration
(B)alteration in names and addresses of any of the persons authorised to accept service on behalf of a foreign limited liability partnership (FLLP)
(C) alteration in the principal place of business in India of FLLP
(D) cessation to have a place of business in India
xiii.FORM-27 LLP: Form for registration of particulars by Foreign Limited Liability Partnership (FLLP)
Fordetails: https://www.mca.gov.in/bin/dms/get document?mds=N2pxvsmVDKIDdx 0TtXM3Ow%253D%253D&type=op en
• The Companies (Incorporation) Fourth Amendment Rules, 2021
The MCA vide notification dated June 07, 2021 has further amended the Companies (Incorporation) Rules, 2014, whereby in Rule 38A, the facility of obtaining Shops and Establishment Registration has been included. Further, changes in Form No.INC-35 have been notified where in place of “AGILE-PRO”, the letters “AGILE-PRO-S” has been substituted.
For details: https://www.mca.gov.in/bin/dms/get document?mds=r2JGVOj52RJgsqks MI8Hqw%253D%253D&type=open
•The Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Amendment Rules, 2021 (June 09, 2021)
The MCA vide notification dated June 09, 2021 has further amended the provisions of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, whereby a new Rule 6A pertaining to the Manner of transfer of shares under sub-section (9) of Section 90 of the Companies Act, 2013 to the Investor Education and Protection Fund (IEPF) has been inserted.
For details: https://egazette.nic.in/WriteReadDat a/2021/227437.pdf
•Covid-19: Supreme Court rejects plea for fresh loan moratorium relief The Supreme Court on June 11, 2021 rejected a plea seeking a fresh loan moratorium relief in the wake of the second Covid wave as implemented in the aftermath of the first, saying such decisions with financial ramifications are best left to the policymakers – the government and RBI – as “judges are not experts in financial matters”
For details: https://www.financialexpress.com/in dustry/banking-finance/covid-19-su preme-court-rejectsplea-for-fresh-lo an-moratorium-relief/2269939/
• The Companies (Meetings of Board and its Powers) Amendment Rules, 2021
The MCA vide Notification dated June 15, 2021 has omitted Rule 4 of the Companies (Meetings of Board and its Powers) Rules, 2014 which was related to the matters not to be dealtwithinameetingthroughvideo conferencing or other audio-visual means.
Accordingly, with the said amendment, now the following items can be considered in a Board Meeting held through video conferencing or other audio-visual means, namely: –
i.The approval of the annual financial statements;
ii.The approval of the Board’s report; iii.The approval of the prospectus; iv.The Audit Committee Meetings for consideration of financial statement including consolidated financial statement if any, to be approved by the board under section 134 (1) of the Companies Act, 2013 and
v.The approval of the matter relating to amalgamation, merger, demerger, acquisition and takeover.
For details: https://egazette.nic.in/WriteReadDat a/2021/227614.pdf
• The Companies (Creation and Maintenance of databank of Independent Directors) Amendment Rules, 2021
The MCA vide notification dated June 18, 2021 has amended the Companies (Creation and Maintenance of databank of Independent Directors) Rules, 2019. Accordingly, with this amendment, a new sub-rule 8 has been inserted in Rule 3, whereby it stipulates that in case of delay on the part of an individual in applying to the Indian Institute of Corporate Affairs for inclusion of name in the data bank of independent directors or in case of delay in filing an application for renewal thereof, the institute shall allow such inclusion or renewal, as the case may be, after charging a further fee of Rs.1000 on account of such delay.
For details: https://egazette.nic.in/WriteReadDat a/2021/227694.pdf
• The Companies (Indian Accounting Standards) Amendment Rules, 2021 The MCA vide Notification dated June 18, 2021 has further amended the Companies (Indian Accounting Standards) Rules, 2015 pertaining to various Indian Accounting Standards (Ind AS), including those related to: Additional disclosures w.r.t. interest rate benchmark reform to enable users of financial statements to understand the effect of interest rate benchmark reform on an entity’s financial instruments and risk
management strategy, regarding this an entity shall disclose information about:
(a) the nature and extent of risks to which the entity is exposed arising from financial instruments subject to interest rate benchmark reform, and how the entity manages these risks; and
(b) the entity‘s progress in completing the transition to alternative benchmark rates, and how the entity is managing the transition.
Further amendments including changes in the basis for determining the contractual cash flows as a result of interest rate benchmark reform, additional temporary exceptions arising from interest rate benchmark reform etc., has been introduced.
For details: https://egazette.nic.in/WriteReadDat a/2021/227712.pdf
• The Companies (Accounting Standards) Rules, 2021. The MCA vide notification dated June 23, 2021 has notified the Companies (Accounting Standards) Rules, 2021 for Small and Medium sized companies (SMCs), with which the turnover and borrowing limits has been revised as well as disclosure requirements has been made less onerous for SMCs.
The revised definition of “Small and Medium Sized Company” (SMC) means, a company-
securities are not listed or are not in the process of listing on any stock exchange, whether in India or outside India
(i) whose equity or debt securities are not listed or are not in the process of listing on any stock exchange, whether in India or outside India
(ii) which is not a bank, financial institution or an insurance company
(iii) whose turnover (excluding other income) does not exceed two hundred and fifty crore rupees in the immediately preceding accounting year
(iv) which does not have borrowings (including public deposits) in excess of fifty crore rupees at any time during the immediately preceding accounting year and
(v) which is not a holding or subsidiary company of a company which is not a small and medium-sized company.
Explanation: F or the purposes of this clause, a company shall qualify as a Small and Medium Sized Company, if the conditions mentioned therein are satisfied as at the end of the relevant accounting period.
• Clarification on passing of ordinary and special resolutions by companies under the Companies Act, 2013 read with rules made thereunder on account of COVID19- Extension of time
The MCA in view of the continued disruption caused due to COVID-19 pandemic and to provide greater ease of doing business has further allowed the companies to conduct their EGMs through Video-Conferencing or other audio-visual means or transact items through postal ballot in accordance with the framework provided earlier upto December 31, 2021.
For details: https://www.mca.gov.in/bin/dms/get document?mds=fYGpVQRhK8ssM3 lRSs7fsg%253D%253D&type=open
• Relaxation on levy of additional fees in filing of certain Forms under the Companies Act, 2013 and LLP Act 2008- Extension of time.
In continuation to General Circular No: 06/2021 dated May 03, 2021, the MCA has granted additional time upto August 31, 2021 to companies/LLPs to file forms under the Companies Act, 2013/ LLP Act, 2008 (other than a CHG-1 Form, CHG-4 Form and CHG-9 Form) which were/are due for filing during April 01, 2021 to July 31, 2021 without any additional fees. Accordingly, only normal fees shall be levied upto August 31, 2021 for forms (other than charge related forms referred above) required to be filed during April 01, 2021 to July 31, 2021.
For details: https://www.mca.gov.in/bin/dms/get document?mds=oNl%252BU4n7x% 252FntbDPEaxYULQ%253D%253D &type=open
OTHERS
• IAMAI to set up a board to oversee self-regulation by crypto exchanges Industry body, Internet and Mobile Association of India (IAMAI), on June 01,2021saiditissettingupaboard to oversee the implementation of a self-regulatory code of conduct for its members that lays down that all crypto exchange members will voluntarily comply with AML/CFT and KYC and other company and taxation laws.
• Cabinet approves Model Tenancy Act for circulation to States, UTs The Union Cabinet on Wednesday, June 2, 2021 approved the Model Tenancy Act to be sent to the States and Union Territories to enact legislation or amend laws on rental properties. The meeting was chaired by Prime Minister Narendra Modi.
“It will help overhaul the legal framework with respect to rental housing across the country, which would help spur its overall growth…It will enable creation of adequate rental housing stock for all the income groups thereby addressing the issue of homelessness,” a government statement said.
Among the provisions in the model Act is a cap of two months’ rent on the security deposit to be paid by tenants for residential properties and six months’ rent for non-residential spaces and appointment of a rent authority to settle disputes in each district. The Act also makes it mandatory for there to be a written agreement between the property owner and the tenant
For details: https://www.pib.gov.in/PressReleas ePage.aspx?PRID=1723636
• Indian economy will grow at 8.3% in 2021, says World Bank
Indian economy is expected to expand 8.3 per cent in fiscal year 2021-22, a report by World Bank projected. In its latest issue of Global Economic Prospects, the Washington-based global lender said that even though the forecast has been revised up by 2.9 percentage points, its masks significant expected economic damage from the second wave of Covid-19. Besides, it projected the global economy to grow 5.6 per cent this year, up from the 4.1 per cent it forecasted in January. It said that Covid vaccinations and stimulus given by various central governments will power the fastest worldwide expansion in nearly five decades.
• DPIIT notifies 74% FDI cap in insurance sector under Automatic Route
The department for promotion of industry and internal trade (DPIIT) has notified the government’s decision to increase the foreign direct investment (FDI) limit in the insurance sector under the automatic route to 75% from 49% earlier.
The Insurance (Amendment) Bill, 2021, was passed by Parliament in March. The Bill amended the Insurance Act, 1938. The new arrangement is expected to benefit 23 private life insurers, 21 private non-life insurers and seven specialised private health insurer companies.
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