MCA UPDATES

1.      It is advised by Ministry of Corporate Affairs (MCA) that the forms w.r.t. Name availability (INC-1) and Incorporation of companies (INC-7/SPICe-INC-32/URC-1/INC-12) should not be filed by the directors:

•           Who have not filed financial statements or annual returns for any continuous period of 3 financial years; and

•           Who are associated with struck off companies.

Forms filed by such Directors shall be rejected summarily by the Central Registration Centre (CRC).

Further, attention is drawn to the provisions of Section 7(5) and 7(6) which, inter alia, provide that furnishing of any false or incorrect particulars of any information or suppression of any material information shall attract punishment for fraud under Section 447.

Attention is also drawn to the provisions of Section 448 and 449 which provide for punishment for false statement and punishment for false evidence respectively.

2.      Ministry of Corporate Affairs (MCA) had earlier issued notification amending Companies (Appointment and Qualification of Directors) Rules, 2014. In the said notification, MCA had amended Rule 4 of Companies (Appointment and Qualification of Directors) Rules, 2014 exempting from appointing independent directors for following classes of unlisted public companies:

·         joint ventures,

·         wholly owned subsidiary and

·         Dormant company.

Now MCA has issued a circular with respect to the above notification clarifying the meaning of joint venture for the purpose of availing exemption under Rule 4.

It is clarified that joint venture would mean a joint arrangement, entered into in writing, whereby the parties that have joint control of the arrangement, have rights to the net assets of the arrangement.