Amendment in Companies (Share Capital and Debentures) Amendment Rules, 2014

Ministry of Corporate Affairs has issued the Companies (Share Capital and Debentures) Amendment Rules, 2015 on 18th March 2015. This is second amendment in these rules. .

The highlights of this amendment as prepared by Institute of Company Secretaries of India  are reproduced here for your reference:

  •  Rule 5: First proviso to sub-rule (3) (b)provided that in companies wherein a company secretary is appointed under the provisions of the Act, he shall be deemed to be authorised for signing the share certificate. This proviso has been deleted implying thereby that Company Secretary or any person authorised by the Board for the purpose can sign the share certificates.
  • Rule 6 : In case of listed companies, duplicate share certificate  shall be issued within forty five days, from the date of submission of complete documents with the company instead of fifteen days earlier.

 

  • Rule 12: In terms of rule 12, a company other than a listed company, which is not required to comply with the SEBI (ESOP) shall not offer shares to its employees under a scheme of ESOPs unless it complies with the requirements under the said rule.

    Before the amendment, an employee of an associate company was also covered within the meaning of employee. Pursuant to the amendment, the employee of an associate company would not be included within the meaning of employee.

 

  • Rule 13: In case of any preferential offer made by a company to one or more existing members only, the provisions of sub-rule (1) and proviso to sub-rule (3) of rule 14 of Companies (prospectus and Allotment of Securities) Rules, 2014 shall not apply.

Rule 14 of Companies (prospectus and Allotment of Securities) Rules, 2014 deals with private placement.

 

  • Rule 18: As per Rule 18(1), in condition (d)(i) regarding issue of secured debentures, the words ‘(not being in the nature of pledge)’ have been omitted.

    In case of a non-banking financial company, the charge or mortgage  may now be created on any movable property.

 

  • In case of any issue of debentures by a Government company which is fully secured by the guarantee given by the Central Government or one or more State Government or by both, the requirement for creation of charge shall not apply.
  • In case of any loan taken by a subsidiary company from any bank or financial institution, the charge or mortgage may be created on the properties or assets of the holding company.
  • Trust deed in Form No. SH.12 or as near thereto as possible shall be executed by the company issuing debentures in favour of the debenture trustees within three months of closure of the issue or offer as against within sixty days of allotment of debentures earlier.
  • A new sub-rule (9) has been added to Rule 18 exempting this rule to any amount received by a company against issue of commercial paper or any other similar instrument issued in accordance with the guidelines or regulations or notification issued by the Reserve Bank of India.

 

  • A new sub-rule (10) has been added to Rule 18 exempting this rule, unless otherwise provided in such Scheme or regulations or directions, in case of any offer of foreign currency convertible bonds or foreign currency bonds issued in accordance with the Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993 or regulations or directions issued by the Reserve Bank of India.


  • Rule 19

 The modification in the nature of correcting cross referencing to the Form in sub-rule (11) has been made. The words ‘Form No. SH-14’ has been replaced with words ‘Form SH-13’

The format of Form No. SH-13 and SH-14 have been substituted.

Source : www.icsi.edu

You can download the amended rules from the following link:

http://www.mca.gov.in/Ministry/pdf/Chapter4_Rules_19032015.pdf

Thanks & Regards

KASHIF ALI & ASSOCIATES
Company Secretaries
268, Business India Complex,
Uday Park, New Delhi-110049
Call us : +91 9718483209

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