MCA Updates

·                               Amendment in Companies (Audit and Auditors) Rules, 2014

Ministry of Corporate Affairs (MCA) vide notification dated 22 June 2017, has made an amendment to the Companies (Audit and Auditors) Rules, 2014  

Pursuant to this notification, the limit of paid up share capital of “Rs.20 crores or more” has been revised to “Rs. 50 crores or more” subsequent to which the private companies having paid up share capital of less than Rs. 50 crores shall not be required to comply with the provisions of Section 139(2) of Companies Act, 2013 regarding the rotation of auditors.

·                            Surrender of Director Identification Number

E- Form DIR-5 (Application for surrender of Director Identification Number) has been deployed as an e-form for filing purposes w.e.f 21st June 2017. Stakeholders who wish to surrender DIN shall be required to file this e-form instead of it being filed as an attachment to form RD-1.

Exemption to Government Companies

Ministry of Corporate Affairs (MCA) vide Notification dated 13^th June, 2017 hereby amends its Notification no. G.S.R 463(E) dated 5^th June, 2015(Principal Notification).

The Government companies will not be eligible to claim the following exemptions alongwith those specified in Principal Notification, if they have defaulted in filing of financial statements or annual returns under section 137 and section 92 respectively with Registrar.

Section	Earlier	Amended
96(2)	Place of holding AGM Such other place as the Central Govt. may approve in this behalf	Place of holding AGM Such other place within the city, town or village in which the registered office of the company is situated or such other place as the Central Govt. may approve in this behalf
152(6) and (7)	Directors retiring by rotation- Shall not apply to:    Govt. Co in which entire paid up share capital is held by Central Govt.  or by State Govt. or by both Subsidiary of Govt. Co. referred above	Directors retiring by rotation- Shall not apply to: 1. Govt. Co which is Unlisted company; and > =51% of paid up capital is held by Central Govt.  or by State Govt. or by both 2. Subsidiary of Govt. Company referred above
230 to 232	The Tribunal had the powers under the following sections: S. 230 Compromise and Arrangements with creditors and members S 231. Power of tribunal to enforce compromise or arrangement S. 232 Merger and Amalgamation of companies	For the word “Tribunal”, wherever it occurs, the words “Central Government” shall be substituted in following sections: S. 230 Compromise and Arrangements with creditors and members S 231. Power of tribunal to enforce compromise or arrangement S. 232 Merger and Amalgamation of companies

Exemption to Section 8 companies

Ministry of Corporate Affairs (MCA) vide Notification dated 13^th June, 2017 hereby amends its Notification No. G.S.R 466(E) dated 5^th June, 2015 (Principal Notification).

The Section 8 companies will not be eligible to claim the following exemptions alongwith those specified in Principal Notification, if they have defaulted in filing of financial statements or annual returns under section 137 and section 92 respectively with Registrar.

Section	Earlier	Amended
Clause (b) and First proviso to 149(1)	Earlier criteria related to minimum and maximum no. of directors was exempted	Now Section 149(1)(b) and First proviso to Section 149(1) are not applicable. i.e. Only criteria related to minimum no. of directors are applicable as follows: For public company -  3 directors For private company – 2 directors
186(7)	No Such provision	Section 186(7) shall not apply to a company in which : 26% or more of paid up share capital is held by Central Govt./State Govt. Or both in respect of loans provided by such company for funding Industrial Research and Development project in furtherance of its objects as stated in MOA

Exemptions to Private Companies

Ministry of Corporate Affairs (MCA) vide Notification dated 13^th June, 2017 hereby amends its Notification no. G.S.R 464 (E) dated 5^th June, 2015 (Principal Notification).

The private companies will not be eligible to claim the following exemptions alongwith those specified in Principal Notification, if they have defaulted in filing of financial statements or annual returns under section 137 and section 92 respectively with Registrar.

Section	Earlier	Amended
2(40)	Cash Flow statement is not mandatory for: ·         One person Company ·         Small Company ·         Dormant Company	Cash flow statement is not mandatory for: ·         One person Company ·         Small Company ·         Dormant Company ·         Start-up Company (Private company)
Clause  (a) to (e) of Section 73(2)	Shall not apply to a Private company which accepts from its members monies not exceeding 100% of aggregate of paid up share capital and free reserves	Shall not apply to a Private company- (A)    which accepts from its members monies not exceeding 100% of aggregate of paid up share capital, free reserves and securities premium account’, or   (B)    which is a start up for 5 years from the date of its Incorporation or (C)    which fulfils all of the following conditions: (a)      which is not an associate or subsidiary company of any other company   (b)      If the borrowings of such a company from Banks or Financial institutions or any Body corporate is less than twice of its paid up share capital or 50 Crore rupees, whichever is lower; and (c)      Such a company has not defaulted in the repayment of such borrowings subsisting at the time of accepting deposits under this section Provided that the company referred to in clauses (A), (B) or (C) shall file the details of monies accepted to the Registrar in such manner as may be specified.".
92(1)(g)	Every company including small company requires to provide details of Remuneration of directors and Key Managerial Personnel in its Annual return.	Now, small companies are required to disclose the details of remuneration of directors only.
92(1)	In relation to One Person Company, small company, the annual return shall be signed by the Company Secretary and if there is no Company Secretary, by the Director of the company	Now in addition to One Person Company and  Small company, Private Company which is a start up , the annual return shall be signed by the Company Secretary and if there is no Company Secretary, by the Director of the company
143(3)(i)	The Auditors report shall also state: (i) whether the company has adequate Internal Financial Controls system in place and the operating effectiveness of such control	Clause (i) shall not be applicable to private companies which is: ·         One Person Company; or ·         Small Company; or ·         Having turnover less than 50 Crores as per latest audited financial statements; or ·         Having aggregate borrowings less than 25 crores from banks or financial institutions or any body corporate at any point of time during the financial year
173(5)	One Person Company (OPC) or Dormant Company or small company shall conduct at least one meeting of board of Directors in each half of the calendar year and the gap between the two meeting is not less than 90 days	Alongwith OPC, dormant and small company, this section shall also apply to Private company which is a start up
174(3)	Earlier the same provision is inserted in section 184(2)	Now the same has been inserted in Section 174(3) Interested director may also be counted towards quorum in such meeting after disclosure of his interest pursuant to section 184