Online filing system for Alternative Investment Funds (AIF)

The Securities and Exchange Board of India (SEBI) vide circular No. SEBI/HO/IMD/DF1/CIR/P/2017/87 dated 31/07/2017 has introduced an online filing system for applying for registration, reporting and filing in terms of the provisions of AIF Regulations and circulars issued thereunder and various compliances under SEBI (Alternative Investment Funds) Regulations, 2012.

All applicants desirous of seeking registration as an AIF shall submit their applications online only, through SEBI Intermediary Portal at https://siportal.sebi.gov.in

All SEBI registered AIFs shall file/ submit/ apply for any request, as may be required under the provision of aforesaid Regulations & Circulars issued thereunder, through the online system only.

Existing SEBI registered AIFs are advised to activate their online accounts.

MCA Update

MCA Vide General Circular No.08/2017 dated 25^th July, 2017 clarified w.r.t. the financial year in respect of applicability of exemption given to certain private companies from requirement of reporting under section 143(3)(i) of the Companies Act, 2013 (Internal Financial Control system).

  

The said exemption shall be applicable to audit reports in respect of financial statements pertaining to financial years commencing on or after 1^st April, 2016, which are made on or after the date of said notification i.e. 13^th June, 2017.

COMPANIES (MEETINGS OF BOARD AND ITS POWERS) RULES, 2014

Ministry of Corporate Affairs vide notification dated 13^th July, 2017 amended Companies (Meetings of Board and its Powers) Rules, 2014. The amended rules may be called as   Companies (Meetings of Board and its Powers) Second Amendment Rules, 2017

Rule	Earlier	Amended
Rule 3 (3)(e)	The director, who desire, to participate may intimate his intention of participation through the electronic mode at the beginning of the calendar year and such declaration shall be valid for one calendar year	Any director who intends to participate in the meeting through electronic mode may intimate about such participation at the beginning of the calendar year and such declaration shall be valid for one year: Provided that such declaration shall not debar him from participation in the meeting in person in which case he shall intimate the company sufficiently in advance of his intention to participate in person
Rule 3(11)(a)	At the end of discussion on each agenda item, the Chairperson of the meeting shall announce the summary of the decision taken on such item along with names of the directors, if any, who dissented from the decision taken by majority	At the end of discussion on each agenda item, the Chairperson of the meeting shall announce the summary of the decision taken on such item along with names of the directors, if any, who dissented from the decision taken by majority and the draft minutes so recorded shall be preserved by the company till the confirmation of the draft minutes in accordance with sub-rule (12)
Rule 6	The Board of Directors of every listed companies and the following classes of companies shall constitute an Audit Committee and a Nomination and Remuneration Committee of the Board- (i) all public companies with a paid up capital of ten crore rupees or more (ii) all public companies having turnover of one hundred crore rupees or more (iii) all public companies having in aggregate, outstanding loans or borrowings or debentures or deposits, exceeding fifty crore rupees or more	Rule 6  and the provisos has been substituted by the following: The Board of directors of every listed company and a company covered under rule 4 of the Companies (Appointment and Qualification of Directors) Rules, 2014 shall constitute an ‘Audit Committee’ and a ‘Nomination and Remuneration Committee of the Board’.

Exemption to Private Companies

Ministry of Corporate Affairs (MCA) vide Notification dated 13^th July, 2017 hereby amends its Notification no. G.S.R 583 (E) dated 13^th June, 2017.

The criteria of having adequate Internal Financial Controls system will not be applicable to the following private companies:

Section	Earlier	Amended
143(3)(i)	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 anybody corporate at any point of time during the financial year	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; and Having aggregate borrowings less than 25 crores from banks or financial institutions or anybody corporate at any point of time during the financial year

Restore your Dissolved Company

Registrar of Companies (Registrar) has sent notices to the companies and its directors declaring its intention to remove the name of company from the Registrar of Companies and requesting them to represent their case along with relevant documents, if any within a period of 30 days from the date of notice on the following grounds:

a.       A company has failed to commence its business within one year of its incorporation; OR

b.      A company is not carrying on any business or operation for a period of two immediately preceding financial years and has not made any application within such period for obtaining the status of a dormant company under section 455.

 On expiry of the time mentioned in notice, the Registrar may, unless cause to the contrary is shown  by the Company, strike off its name from the Register of Companies and publish notice thereof in  official gazette. On such publication, the company stand dissolved.

Recently many companies have been struck off by the Registrar. The only remedy available to restore the Company, if it is operational, is to file an appeal in Form No. NCLT 9 to National Company Law Tribunal (Tribunal) under Section 252 of the Companies Act, 2013.

How to restore the company?

·         As per Section 252, any person aggrieved by an order of the Registrar may file an appeal to the Tribunal within a period of three years from the date of the order of the Registrar.

·         If Tribunal is of the opinion that removal of name of the company is not justified in view of the     absence of any of the grounds referred above on which order was passed by the Registrar, it may  order restoration of the name of the company.

·       The Tribunal shall give a  reasonable opportunity of making representations and of being heard to the Registrar, the Company and all the persons concerned

In some of the recent cases filed under Companies Act, 2013, Tribunal have passed the order in favour of company to restore its name subject to fulfilment of the requisite formalities mentioned in report of Registrar.

In Sheikh Nuruzzaman V/s The Registrar of Companies, Kolkata bench[1], the Tribunal had passed an order granting restoration of name of the company only on compliance with the requisite formalities as pointed out in report of Registrar i.e. annual filing for the period of default alongwith prescribed fees within four weeks from the date of order. The similar order was pronounced in Mohit Parikh V/s The Registrar of Companies[2] and Manoj Kumar Agarwal V/s Registrar of Companies[3].

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[1] C.P.No.96/KB/2017 dated 26^th May, 2017

[2] C.P.No.148/KB/2017 dated 26^th May, 2017

[3] C.P.No.97/KB/2017 dated 26^th April, 2017

Amended Companies (Appointment and Qualification of Directors) rules, 2014

Ministry of Corporate Affairs vide notification dated 5^th July, 2017 amended Companies (Appointment and Qualification of Directors) Amendment Rules, 2017(Rule). The amendment is in respect to Insertion of sub-Rule(2) in Rule 4.

As per Rule 4(1), the following classes of companies shall have at least two directors or such higher number of directors as may be required for composition of its audit committee as independent directors –

(i) the Public Companies having paid up share capital of ten crore rupees or more; or

(ii) the Public Companies having turnover of one hundred crore rupees or more; or

(iii) the Public Companies which have, in aggregate, outstanding loans, debentures and deposits, exceeding fifty crore rupees:

By inserting Sub-rule (2), the following classes of unlisted public company shall not be covered in the above provision:

(a) a joint venture;

(b) a wholly owned subsidiary; and

(c) a dormant company as defined under section 455 of the Act.".

Amendment in National Company Law Tribunal Rules, 2016

Ministry of Corporate Affairs (MCA) vide notification dated 5^th July,2017 have amended the National Company Law Tribunal Rules, 2016. The amendment is with respect to inserting the a new Rule after rule 87, (Rule 87 A). The highlights of the same are as follows:

·        An Appeal or application under section 252(1) and (3) of Companies Act, 2013 must be made in the prescribed Form No. NCLT 9.

·        A copy of the appeal or application, shall be served on the Registrar and on such other persons as the Tribunal may direct, not less than 14 days before the date fixed for hearing

·        Tribunal while passing the order, shall direct the following :

o   Deliver certified copy of the order to the Registrar of Companies within 30 days from date of order

o   Registrar shall publish the certified copy of the order in the Official Gazette

o   Appellant/Applicant shall pay costs occasioned by appeal or application to the Registrar

o   Company shall file the pending financials & Annual Returns with Registrar and comply with requirements of Companies Act, 2013 within such time as may be directed by the tribunal

·        An application under second proviso of sub-section (1) of Section 252 shall be in     Form No. NCLT 9.