CORPORATE LAW UPDATES
Filing of declaration for commencement of business by Nidhi companies
Pursuant to the provisions of section 10A of the Act read with Companies Incorporation rules, every company incorporated with share capital in India shall commence business only after filing a declaration regarding payment of subscription money against the share capital subscribed by every promoter / shareholder of the company in prescribed e-form INC-20A. This declaration is required to be filed within 180 days from the date of incorporation of the company with the Registrar of Com- panies (ROC).
In line with the aforesaid provisions, MCA vide notification dated 8th April 2022 has also extended the requirement of filing the declaration for commencement of business by Nidhi companies with ROC at the stage of incorporation itself. Accord- ingly, all Nidhi companies shall commence business only after filing the declaration for commencement of business in prescribed e-form INC-20A with ROC under Rule 12 of Companies (Incorporation) amendment rules, 2022.
CIRCULAR NO. SEBI/HO/IMD/F- PI&C/CIR/P/2022/57, DATED 29-04-2022
SEBI modifies guidelines for FPIs, Designated Depository Participants and ‘Eligible Foreign Investors’
Editorial Note : SEBI vide SEBI Circular No. IMD/FPI&C/- CIR/P/2019/124 dated 05-11-2019 issued operational guidelines for FPI, DDP, and FI whereby the designated depository participant is required to grant certificate of registration, bearing the registra- tion number generated by NSDL in a centralised manner. SEBI has decided to modify the operational guidelines. Now, the designated depository participant is required to grant the certificate of registration, bearing the registration number generated by SEBI.
SECTION 188 OF THE COMPANIES ACT, 2013 – RELAT- ED PARTY TRANSACTIONS
SEBI not justified in penalising company by taking a ‘hyper- technical’ view of the law on Relat- ed
Party Transactions – Securities and Exchange Board of India v. R.T. Agro (P.) Ltd. – [2022] 137 taxmann.com 496 (SC)
SECTION 232 OF THE COMPANIES ACT, 2013 – AMALGAMATION
Where applicant companies i.e. transferor companies and transferee company had jointly filed application in relation of scheme of amalgamation proposed between them along with relevant documents, convening and holding of meetings of Equity Shareholders, Secured and Unsecured Creditors of appli- cant companies was to be dispensed with – Inward Vinimay (P.) Ltd., In re – [2022] 137 taxmann.com 285 (NCLT-Jaipur)
SECTION 247 OF THE COMPANIES ACT, 2013 – VALUATION BY REGISTERED VALUERS
Where in FIR filed by CBI as regards inflated valuation of properties registered valuer ‘R’ was not named as an accused and there was no direct allegation on her and case was under investigation, contraventions alleged in Show Cause Notice (SCN) as regards eligibility to be registered valuer did not appear to be established and SCN was disposed of without any direction – Ms. Esther Rani Jakkula., In re – [2022] 137 taxmann.com 292 (IBBI)
RBI notifies guidelines for loans & advances granted by Non – Banking Financial Companies (NBFCs) to its directors, their relatives, senior officers & real estate borrowers. RBI vide notification dated 19th April 2022 has notified following guidelines for loans & advances granted by NBFCs to its Directors, their relatives, senior officers & real estate borrowers.
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Loans & Advances granted to |
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Directors & Relatives |
Senior Officers |
Real Estate Borrowers |
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No NBFC shall without the prior approval of its Board of Directors / Committee of Direc- tors grant loans & advances > Rs 5 crore to: • its Directors or Directors’ relatives; • any company in which any of its Directors or their relatives is interested as a major share- holder, director, manager, employee or guarantor • NBFCs shall obtain a declara- tion from the borrower giving details of the relationship of the borrower with the NBFCs Directors / senior officers for loans & advances > Rs 5 crore. NBFCs shall recall the loan if it comes to their knowl- edge that the borrower has given a false declaration • These guidelines shall be duly brought to the notice of every Director and be placed before the NBFCs Board of Director • NBFCs shall disclose in their annual financial statements, the aggregate amount of such sanctioned loans & advances |
• Loans & advances granted to the senior officers of the NBFC shall be reported to the NBFC’s Board of Directors • No senior officer or any Committee comprising of that senior officer as its member shall, while exercising the powers of sanction of any loan facility, shall grant any loans & advances to the relative of that senior officer. Such a facility shall only be sanctioned by the next higher sanctioning authority under the delega- tion of powers |
• NBFCs before granting any loans & advances to the real estate borrowers shall ensure that the borrowers have obtained prior permission from the Government / local Govern- ment / other statutory authori- ties for the project, wherever required • To ensure that the loan approval process is not hampered on account of taking the aforesaid statutory approv- als, NBFC may sanction approval for the loan & advanc- es. However, the disburse- ments shall be made only after the borrower has obtained requisite approvals from the Government / other statutory authorities |
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* The terms ‘Loans & advances’ will not include loans / advances against the following: • Government securities; • Stocks & shares; |
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