Author Archive: cskashifali

DIR 3 KYC (What is DIR-3-KYC)

By cskashifali on | Leave a comment

What is DIR-3-KYC?

 

DIR-3-KYC is a new E-form to be launched shortly by the Ministry of Corporate Affairs.  This form will be used to update KYC of all directors.  As per rule 12A of Companies (Appointment and Qualification of Directors) Rules, 2014 applicable w.e.f. 10th July 2018 every individual who has been allotted a Director Identification Number (DIN) as on 31st March of a financial year as per these rules shall, submit e-form DIR-3-KYC to the Central Government on or before 30th April of immediate next financial year.

 

Therefore the form DIR-3 KYC is to be filed by every individual who has been allotted a Director Identification Number (DIN) as on 31st March of a financial year.

For example DIN was allotted to Mr. X 7th July 2018 he would need to file DIR-3 KYC before 30th April 2019

 

What is the last day to file DIR-3 KYC for directors

whose DIN has been allotted on or before 31st March

2018 ?

 

31st August 2018 is the last date to file DIR-3 KYC by every Director who has been allotted DIN on or before 31st March, 2018 and whose DIN is in ‘Approved’ status.

 

Is it compulsory to file DIR-3 KYC ?

Yes, its mandatory to be filed by all  Director who has been allotted DIN on or before 31st March, 2018 and whose DIN is in ‘Approved’ status

 

EVEN  DISQUALIFIED  DIRECTORS NEED TO FILE FORM

DIR-3 KYC

 

What if someone failed to file form DIR-3 KYC on due

time?

After expiry of the due date by which the DIR-3 KYC form is to be filed, the MCA21 system will mark all approved DINs (allotted on or before 31st March 2018) against which DIR-3 KYC form has not been filed as ‘Deactivated’ with reason as ‘Non-filing of DIR-3 KYC’.

Can the DIR-3 KYC be filed after 31st August 2018?

Yes, After the due date filing of DIR-3 KYC in respect of such deactivated DINs shall be allowed upon payment of a specified fee only, without prejudice to any other action that may be taken by the MCA.

Thanking you.

For Kashif Ali & Associates

(Company Secretaries)

 

Kashif Ali

FCS. LL.B. M.Com.

Member ICSI (NIRC) Placement Committee

Off:C-100, Sarai Julena, New Friends Colony

New Delhi-110025

 

XXXXXXXXXXXXXXXXXX

This article is written by Kashif Ali, fellow member of ICSI and law graduate. Kashif Ali is into corporate law practice since 2010 in the name of Kashif Ali & Associates (Company Secretaries) at New Delhi. He can be reach at cs.kashifali@gmail.com.

 

 

 

 

Companies (Appointment and Qualification of

Directors) fourth Amendment Rules, 2018

Government of India

MINISTRY OF CORPORATE AFFAIRS

Notification

New Delhi, 5th July, 2018

G.S.R. (E).—In exercise of the powers conferred under second proviso to sub-section (1), sub-section (4), clause(f) of sub-section (6) of section 149, sub-section (3) and (4) of section 150, section 151, sub-section (5) of section 152, section 153, section 154, section 157, section 160, sub-section (1) of section 168 and section 170 read with section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Appointment and Qualification of Directors) Rules, 2014, namely: –

  1. (1) These rules may be called the Companies (Appointment and Qualification of Directors) fourth Amendment Rules, 2018.

(2) They shall come into force from 10th July, 2018.

  1. In the Companies (Appointment and Qualification of Directors) Rules, 2014,

(i) The rule 11 shall be renumbered as sub-rule (1) thereof and after sub-rule (1) as so renumbered, the following sub-rules shall be inserted, namely:-

“(2) The Central Government or Regional Director (Northern Region), or any officer authorised by the Central Government or Regional Director (Northern Region) shall, deactivate the Director Identification Number (DIN), of an individual who does not intimate his particulars in e-form DIR-3-KYC within stipulated time in accordance with rule 12A:

(3) The de-activated DIN shall be re-activated only after e-form DIR-3-KYC is filed along with fee as prescribed under Companies (Registration Offices and Fees) Rules, 2014.

(ii) after rule12, the following shall be inserted, namely:-

“12A Directors KYC:- Every individual who has been allotted a Director Identification Number (DIN) as on 31st March of a financial year as per these rules shall, submit e-form DIR-3-KYC to the Central Government on or before 30th April of immediate next financial year.

Provided that every individual who has already been allotted a Director Identification Number (DIN) as at 31st March, 2018, shall submit e-form DIR-3 KYC on or before 31st August, 2018.”;

http://mca.gov.in/Ministry/pdf/CompaniesAppointmentQualificationRules_06072018.pdf

 

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Posted in: Goods and Service Tax | Tagged:

“CRC” Name Reservation under Companies Act using “RUN” problems faced by Professionals

By cskashifali on | Leave a comment

Dear Friends,

 

We are filing representation before the Ministry of Corporate Affairs on behalf of professional suffering from  Rejection of Name by CRC.

I am Fellow member of the Institute of Company Secretaries of India  and in Practice since 2010 . I myself had loss some big assignments and lost money due to rejections by the CRC .

We believe that the officer sittings in CRC are not corrupt, but  there is some corruption due to which people are earning Rs 30,000/- to 50,000/- for name approval which in normal case would have been rejected by the CRC.

We are going to file a representation to the PMO office to the Ministry of Finance and Ministry of Corporate Affairs informing them the issues we professionals  and entrepreneurs are facing to “Start Business”

We are requesting you to kindly share why your Company name or Company Incorporation was rejected so that we can compile it and file it with our representation.

Sharing some of Rejection stories:

 

Sr. No Name E Mail Reason for Rejection Reason for Rejection
1 Deepak Singhal sdeepak.cs@gmail.com The biggest Reason is NAME IS TOO GENERAL And for TM atleast they should mention under which class it is registered,  as earlier ROC gives clear remarks that this word is registered under this class
2 K. Sankara Subramanian <shankartheacs5@gmail.com> In our case, the promoter is holding a valid TM under class 14 and applied for incorporation with that TM Name. But the Form was marked for resubmission stating the name resembles with a TM under class 35. I think they are not even looking into the attachments or explanation letters.
3 sweety kapoor <sweetykapoor53@rediffmail.com> so but  my colleague  did not get the  first name approved through  run and rs.1000/- gone later second name which had  a simliar name got approved strange
4 Sourabh Singhal <cs.sourabh89@gmail.com> Most common Reason

Name is Too General
5 Durga Bansal <bansal.durga14@gmail.com> In my case, they rejected application 2 times for want of more documents and when third time we submitted the application with all the desired documents then they rejected saying the name is resembling with an existing company but the name given was totally different.
6 Manoj Jain <jain.csmanoj@gmail.com> my concern is why ROC cancel the SRN of INC for the change of name and ask for re-application through RUN and again rejected the application on the same grounds which was accepted earlier at the time of filing INC-1. they should migrate all the approves SRN applied through INC-1.what about the Companies who got the approval from Stock Exchanges and shareholders on the basis of earlier approval In that case it seen name was approved through INC-1 but  rejected in RUN
7 Harshit Shah <cs.harshitshah@yahoo.com> Name applied: _____ Capital Advisors Private Limited (Purely advisory activity does not need SEBI approval)

In-principle approval of concerned regulator is not provided as proposed name includes the word such as Insurance, Bank, Stock Exchange, Venture Capital, Asset Management, Nidhi, or Mutual Fund.
Proposed name   indicated   finance/credit/NBFC etc   activity but declaration according to rule 8(2)(b)(XIII) read with rule 8(2)(b)(III) of Companies Incorporation rules 2014 is not attached.

Name is resembling /closely resembling Companies/LLP
8 Manisha Menon <advmanisha28@gmail.com> Dear All,

I have till now tried four times to get one simple name for our Company. Everytime I am getting complaint that the name has been trademarked or the name remotely resembles to some other Company’s name. Again we have put for name approval. We are facing more difficulty because “RUN” does not have resubmission option. It only gets rejected and our Client’s loose money just like that. Its a very bad idea that MCA has brought. Its a loss of money for the clients. We do not mind paying stamp duty but name approval form should have resubmission option.

Regards,
Manisha
ACS 33083
9 Gyaneshwar Sahai <gyaneshwar.sahai@gmail.com> Name is resembling /closely resembling Companies/LLP
10 Aarti Bhasin <aartibhasin0203@gmail.com> I faced the reason that the name is too generic (which was not the case as the same was available when I checked under “name availability” on MCA services). I find it totally unjustifiable.
11 Taruna Kalra <taruna.cs@gmail.com> 1. they are not checking attachments properly. in hurry, they sent form in re-submission, without checking that attachments are already there
12 Mittal Shah <consultmittal@gmail.com> We have filed name approval application under RUN on MCA portal SRN G75638643 on 3 February 2018 for “LIFESTYLE CLUB AND LESIURE PRIVATE LIMITED” which is rejected by CRC on 6 February 2018 on the basis that  vide – Name is resembling /closely resembling Companies/LLP. The rejection letter stated that Proposed name is closely resemble with existing/reserved Company(s)/LLP(s) ‘LIFESTYLE CLUBOTELS PRIVATE LIMITED’ , ‘LIFESTYLE LEISURES PRIVATE LIMITED’ and many others. Hence, it is not considerable as per the provisions of Sec 4(2) of Cos Act-2013 r.w. ,Companies (INC) Rules, 2014.

Therefore, we again filed another application for name on 6 February 2018 itself as the client eagerly wants to form a company vide SRN G75901363 after checking availability of the desired name on the portal. Accordingly we applied for a modified new name “RC LIFESTYLE CLUB AND LEISURE PRIVATE LIMITED” which was also rejected again after waiting for two days on the similar grounds. Proposed name is nearly resembling with the names of the existing/reserved company/LLP ” RC LEISURE PRIVATE LIMITED”. Hence, not considerable as per the provisions of section 4(2) of the Companies Act -2013.   Proposed name with  “RC” is a TM under Class 36,  Hence not considerable in view of provisions of rule 8(2) (a) (ii) of Companies (Inc.) Rules, 2014.    hence the form is rejected.

We have also raised ticket for service complaint on MCA portal asking for possible solution as the client is in urgency to form a company and start a deal, the government on the public communication as well as on MCA portal saying that now incorporation of a company is “zero fee”, and “starting a business much easier” but we did not find any solution from the compliant that we raised also, two names were rejected causing delay of almost 5 days and still we are back in the same position. Government should either provide some window to check name from all angles by the customer only else provide few name options while applying so alternative names can be approved at least and business can be started without LOSING TIME AND MONEY. MCA tickets only give caveated answers, there is no solution provided.

We need alternative solution on name approval as we do not see any similarity in this class of proposed business. If both these names are not available we wish to continue with “LIFESTYLE LIVING CONCEPTS PRIVATE LIMITED” , we have LLP reserved with the same name.

this is a draft email summarizing our complaints with CRC.
13 DEEPAK SADHU <csdeepakmails@gmail.com> Hi All

It has become a scary assignment to take up incorporation…..I will not be sure if approval of the name will be sought or not….

Please help….I am ready for volunteering to the Ministry and ICS
14 Alpi Nehra alpinehracs@gmail.com Name is resembling /closely resembling Companies/LLP.
15 Akshat Garg cs.akshatgarg@gmail.com> Name Applied : AYUSHI PROGOLD PRIVATE LIMITED                                            Reason for Rejection Present name of the company includes/indicates “Finance/Investment/Stock Broking etc”  which is allowed , subject to in principal approval from the concerned regulatory authority is furnished, for the proposed name change.
16 Pratik Dhodia <cspratik.d@gmail.com> We also filed Name Application through RUN, Got rejected twice, Reason being “approval of Regulatory Body Required” Though the Main Object of the Proposed Company was Carrying on Financial Advisory & Consultancy Business.
17 Anu Pasrija <anupasrija@gmail.com> Hi

I am not understanding the basic idea of bringing this RUN feature into picture . It is not doing any ease of business .So much exercise needs to be done while applying for the name which is actually very time consuming  Over that CRC is taking almost 2-3 days for approval  rather rejection I must say which is making us speechless before the Clients . We cannot quote exact fees to the client  because we  dont know how many attempts it would take for name approval .

Incorporation has really become a tough assignment to take up
18 CS Praveen Pandey cspraveenpandey@gmail.com Proposed Name – AIMS MAX GARDENIA HOMES PRIVATE LIMITEDProposed names  with  prefix “AIMS” is  a  TM under Class  36 or many more   Rule 8(2) (a) (ii) of Companies (Inc.) Rules, 2014 Hence, not considerable as per the provisions of section 4(2) of the Companies Act -2013. – in Our application name is  AIMS MAX GARDENIA
19 FCS Mahesh Grandhi <mahesh.gpa@gmail.com> We filed for the proposed name with the prefix which includes capital word and like i.e., capitalman and its going to be take up only infrastructure objects and we filed three times and they are asking to submit declaration of Nbfc/Rbi /Sebi which is under rule 8 of INC rules. But Promoters are not convincing to give declaration as required by mca as their proposed company is not a capital trading company

there shall be some stringent rule for capital trading companies …. mere having prefix of the word capitalman, how can anyone give declaration .
20 Harshit Shah <cs.harshitshah@yahoo.com> Name applied was: BHT Commodities Private Limited.

Reason for rejection:
Proposed name is nearly resembling to the existing/reserved  company’s name/LLP’s name BRIO FORCE FITNESS PRIVATE LIMITED and many others. Hence, proposed name is not considerable as per the provisions of section 4(2)of Companies Act, 2013. Proposed name includes word” BHT  ” is existing trademark under Application Number:  1547712 Class / Classes:  35  and many others. <<The trademark is expired>> Thus, proposed name is not considerable as per Rule 8(2)(a)(ii)of Companies(Incorporation)rule, 2014.The proposed name with word COMMODITIES and objects  are too wide & diverse accordingly, indicates that the company carry on finance/investment related activities but declaration according to rule 8(2)(b)(XIII)&(iii) of Companies Incorporation rules 2014 is not attached.Hence, rejected.
21 Mayank Arora cs@mayankarora.co.in The Biggest reason we are getting is of TRADEMARK, in case name doesnt fall in the same class than also they raise objection.

In one case MNC wanted to Form a IT Company in India with the same name but CRC did not allow and raised an Objection that Name is too general, PFA Rejection letter
22 Sandip Jejani Dear Concern

1. One of my client is having four Companies starting with the name “Sahyog”

a. Sahyog Kuries Pvt. Ltd.
b. Sahyog Megachits Pvt. Ltd.
c. Sahyog Realcon Ltd.
d. Sahyog Township Pvt. Ltd.

These Companies are almost 20 years old (Directors and Shareholders common in all) but while applying for the name of new Company the form has got rejected on the ground that it is a trade mark of some other Companies.

The name required is:

a. Sahyog Finance Pvt. Ltd.
b. Sahyog Loans Pvt. Ltd.

2. Second Client is having two Companies starting with the name “Anisha” (15 to 20 years old with common Directors and Shareholders)

a. Anisha Interno Pvt. Ltd.
b. Anisha Appliances Pvt. Ltd.

The name required is:

a. Anisha Industries Pvt. Ltd.
b. Anisha Foods Pvt. Ltd.

Please look into the matter and suggest.
23 More Legal Services <onuscg@gmail.com> Name includes a registered trademark/application to trademark registration
24 Sanajy Dholkia sanjayrd65@gmail.com The name was made available under old INC 1 and while Filing Form 24 with ROC
they are asking for RUN SRN Applied under RUN on 6th Feb No answer and still showing

Plz share your story

Thanking you

Kashif Ali

FCS, LL.B, M.Com

Kashif Ali & Associates

(Company Secretaries)

C-100, New Friends Colony, Sarai Juelna, Opp Escort Heart Institute, New Delhi-25
Ph:  9718483209, mail: cs.kashifali@gmail.com

 

 

 

Posted in: Companies Amendment Act 2017, Goods and Service Tax | Tagged: , ,

ZERO Fees for Company Registration

By cskashifali on | Leave a comment

MCA Vide its notification No. G.S.R. 48 dated 20th January 2018 issued on 25th January 2018 has amended  The Companies (Registration Offices and Fees) Amendment Rules, 2018

 

These Rules shall come into effect from 26th January 2018

Highlights:

  • Introduction of “RUN – Reserve Unique Name” Web service for name reservation, which will be launched on 26.01.2018.

 

  • *Zero Fee* for incorporation of all companies with authorized capital upto Rs. 10 lakh.

 

  • Re-engineering the process of allotment of DIN by allotting it through the combined SPICe form only at the time of an individual’s appointment as Director (in case he/she doesn’t have a DIN).

Thanking you

For Kashif Ali & Associates

(Company Secretaries)

Kashif Ali

FCS, LL.B, M.com

Ph: 9718483209, Mail: cs.alikashif@gmail.com

 

Source:http://egazette.nic.in/WriteReadData/2018/182248.pdf

 

 

 

Posted in: Goods and Service Tax

*MCA UPDATES* 12th January 2018

By cskashifali on | Leave a comment

*Automatic Reactivation of DIN*

Stakeholders of Condonation of Delay Scheme (CODS) (notified vide General Circular No.16/2017 dated 29th December 2017) may kindly note that the process for ‘reactivation’ of the DINs in respect of disqualified Directors has been completed and the status of the relevant DINs can be checked now. Stakeholders are therefore requested to file necessary ‘overdue documents’ as per the scheme.

*CODS SCHEME NOT AVAILABLE TO SOME DIRECTORS*

 They may further note that the scheme is not applicable for those Directors who may have been associated with a company which was struck off under Section 248(1) of
the Companies Act-2013 and DINs for such individuals shall be
re-activated only upon receipt of orders for revival of the said company, as per due process laid down under Section 252 of the Companies Act-2013.

Please feel free to ask any query or clarification related to re-activation of your Company under CODS Scheme or through NCLT.

Thanking You

For Kashif Ali & Associates
Company Secretaries

Kashif Ali
FCS, LL.B, M.Com
Ph: 9718483209, Mail: cs.alikashif@gmail.com

Posted in: CODS 2018, Goods and Service Tax, MCA UPDATE 2018

Notifications for companies Amemdment Act 2017

By cskashifali on | Leave a comment

 “”The Central Government notified the Companies (Amendment) Act, 2017 (Amendment Act) on 3rd January, 2018. The provisions of this Amendment Act shall come into force on the date or dates as the Central Government may appoint by notification(s) in the Official Gazette. A few provisions in the Amendment Act have important bearing on the working of the Insolvency and Bankruptcy Code, 2016 (Code)””………and define the reason of amendment in section-53, Section 197, and Section 247″”

However it is nowhere mentioned that the date of coming into effect of these provisions shall be date of issue of press relase i.e. 8th January 2018. We are assuming that the date of coming into effect of these sections is 8th January 2018.

 

 

 

Sr. No. Amended Section Effect
1.        53- Prohibition on issue of shares at discount.

Corresponding sections of the 1956 Act- section 79

Brought into effect from 01-04-2014

Amendment Brought into effect from 08-01-2017

 

53. (1) Except as provided in section 54, a company shall not issue shares at a discount.

(2) Any share issued by a company at a discounted price  discount shall be void.

“(2A) Notwithstanding anything contained in sub-sections (1) and (2), a company may issue shares at a discount to its creditors when its debt is converted into shares in pursuance of any statutory resolution plan or debt restructuring scheme in accordance with any guidelines or directions or regulations specified by the Reserve Bank of India under the Reserve Bank of India Act, 1934 or the Banking (Regulation) Act, 1949

 

(3) Where a company contravenes the provisions of this section, the company shall be punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees and every officer who is in default shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees, or with both.

 

 Section 53 of the Companies Act, 2013 prohibited issuance of shares at a discount.

 

 

The Amendment Act now allows companies to issue shares at a discount to its creditors when its debt is converted into shares in pursuance of any statutory resolution plan such as resolution plan under the Code or debt restructuring scheme.

 
2.       

197. (1) The total managerial remuneration payable by a public company, to its directors, including managing director and whole-time director, and its manager in respect of any financial year shall not exceed eleven per cent of the net profits of that company for that financial year computed in the manner laid down in section 198 except that the remuneration of the directors shall not be deducted from the gross profits:

 

Provided that the company in general meeting may, with the approval of the Central Government, authorise the payment of remuneration exceeding eleven per cent of the net profits of the company, subject to the provisions of Schedule V:

 

Provided further that, except with the approval of the company in general meeting, by special resolution—

(i) the remuneration payable to any one managing director; or whole-time director or manager shall not exceed five per cent of the net profits of the company and if there is more than one such director remuneration shall not exceed ten per cent of the net profits to all such directors and manager taken together;

(ii) the remuneration payable to directors who are neither managing directors nor whole-time directors shall not exceed,—

 

           (A) one per cent of the net profits of the       company, if there is a managing or whole-time director or manager;

(B) three per cent of the net profits in any other case.

“Provided also that, where the company has defaulted in payment of dues to any bank or public financial institution or non-convertible debenture holders or any other secured creditor, the prior approval of the bank or public financial institution concerned or the non-convertible debenture holders or other secured creditor, as the case may be, shall be obtained by the company before obtaining the approval in the general meeting.

 

(2) The percentages aforesaid shall be exclusive of any fees payable to directors under sub-section (5).

(3) Notwithstanding anything contained in sub-sections (1) and (2), but subject to the provisions of Schedule V, if, in any financial year, a company has no profits or its profits are inadequate, the company shall not pay to its directors, including any managing or whole-time director or manager, by way of remuneration any sum exclusive of any fees payable to directors under sub-section (5) hereunder except in accordance with the provisions of Schedule V and if it is not able to comply with such provisions, with the previous approval of the Central Government.

 

(4) The remuneration payable to the directors of a company, including any managing or whole-time director or manager, shall be determined, in accordance with and subject to the provisions of this section, either by the articles of the company, or by a resolution or, if the articles so require, by a special resolution, passed by the company in general meeting and the remuneration payable to a director determined aforesaid shall be inclusive of the remuneration payable to him for the services rendered by him in any other capacity:

 

Provided that any remuneration for services rendered by any such director in other capacity shall not be so included if—

(a) the services rendered are of a professional nature; and

(b) in the opinion of the Nomination and Remuneration Committee, if the company is covered under sub-section (1) of section 178, or the Board of Directors in other cases, the director possesses the requisite qualification for the practice of the profession.

(5) A director may receive remuneration by way of fee for attending meetings of the Board or Committee thereof or for any other purpose whatsoever as may be decided by the Board:

 

Provided that the amount of such fees shall not exceed the amount as may be prescribed:

 

Provided further that different fees for different classes of companies and fees in respect of independent director may be such as may be prescribed.

 

(6) A director or manager may be paid remuneration either by way of a monthly payment or at a specified percentage of the net profits of the company or partly by one way and partly by the other.

 

(7) Notwithstanding anything contained in any other provision of this Act but subject to the provisions of this section, an independent director shall not be entitled to any stock option and may receive remuneration by way of fees provided under sub-section (5), reimbursement of expenses for participation in the Board and other meetings and profit related commission as may be approved by the members.

(8) The net profits for the purposes of this section shall be computed in the manner referred to in section 198.

 

(9) If any director draws or receives, directly or indirectly, by way of remuneration any such sums in excess of the limit prescribed by this section or without the prior sanction of the Central Government, where it is required, he shall refund such sums to the company and until such sum is refunded, hold it in trust for the company.

(9) If any director draws or receives, directly or indirectly, by way of remuneration any such sums in excess of the limit prescribed by this section or without approval required under this section, he shall refund such sums to the company, within two years or such lesser period as may be allowed by the company, and until such sum is refunded, hold it in trust for the company

 

(10) The company shall not waive the recovery of any sum refundable to it under sub-section (9) unless permitted by the Central Government. approved by the company by special resolution within two years from the date the sum becomes refundable”

“Provided that where the company has defaulted in payment of dues to any bank or public financial institution or non-convertible debenture holders or any other secured creditor, the prior approval of the bank or public financial institution concerned or the non-convertible debenture holders or other secured creditor, as the case may be, shall be obtained by the company before obtaining approval of such waiver

 

(11) In cases where Schedule V is applicable on grounds of no profits or inadequate profits, any provision relating to the remuneration of any director which purports to increase or has the effect of increasing the amount thereof, whether the provision be contained in the company’s memorandum or articles, or in an agreement entered into by it, or in any resolution passed by the company in general meeting or its Board, shall not have any effect unless such increase is in accordance with the conditions specified in that Schedule and if such conditions are not being complied, the approval of the Central Government had been obtained.

 

(12) Every listed company shall disclose in the Board’s report, the ratio of the remuneration of each director to the median employee’s remuneration and such other details as may be prescribed.

 

(13) Where any insurance is taken by a company on behalf of its managing director, whole-time director, manager, Chief Executive Officer, Chief Financial Officer or Company Secretary for indemnifying any of them against any liability in respect of any negligence, default, misfeasance, breach of duty or breach of trust for which they may be guilty in relation to the company, the premium paid on such insurance shall not be treated as part of the remuneration payable to any such personnel:

 

Provided that if such person is proved to be guilty, the premium paid on such insurance shall be treated as part of the remuneration.

 

(14) Subject to the provisions of this section, any director who is in receipt of any commission from the company and who is a managing or whole-time director of the company shall not be disqualified from receiving any remuneration or commission from any holding company or subsidiary company of such company subject to its disclosure by the company in the Board’s report.

 

(15) If any person contravenes the provisions of this section, he shall be punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees.

 

“(16) The auditor of the company shall, in his report under section 143, make a statement as to whether the remuneration paid by the company to its directors is in accordance with the provisions of this section, whether remuneration paid to any director is in excess of the limit laid down under this section and give such other details as may be prescribed.

(17) On and from the commencement of the Companies (Amendment) Act, 2017, any application made to the Central Government under the provisions of this section [as it stood before such commencement], which is pending with that Government shall abate, and the company shall, within one year of such commencement, obtain the approval in accordance with the provisions of this section, as so amended

 Section 197 of the Companies Act, 2013 required approval of the company in a general meeting for payment of managerial remuneration in excess of 11 percent of the net profits. The Amendment Act now requires that where a company has defaulted in payment of dues to any bank or public financial institution or non-convertible debenture holders or any other secured creditor, the prior approval of the bank or public financial institution concerned or the non-convertible debenture holders or other secured creditor, as the case may be, for such payment of managerial remuneration shall be obtained by the company before obtaining the approval in the general meeting.

 
 

3.        

  

247- Valuation by registered valuers

 

Corresponding sections of the 1956 Act- NA
Brought into effect from:  18–10-2017
Amendment Brought into effect from : 08-01-2017

 

 

247. (1) Where a valuation is required to be made in respect of any property, stocks, shares, debentures, securities or goodwill or any other assets (herein referred to as the assets) or net worth of a company or its liabilities under the provision of this Act, it shall be valued by a person having such qualifications and experience and registered as a valuer in such manner, on such terms and conditions as may be prescribed and appointed by the audit committee or in its absence by the Board of Directors of that company.

 

(2) The valuer appointed under sub-section (1) shall,—

 

(a) make an impartial, true and fair valuation of any assets which may be required to be valued;

 

(b) exercise due diligence while performing the functions as valuer;

 

(c) make the valuation in accordance with such rules as may be prescribed; and

 

(d) not undertake valuation of any assets in which he has a direct or indirect interest or becomes so interested at any time during or after the valuation of assets. during a period of three years prior to his appointment as valuer or three years after the valuation of assets was conducted by him”

(3) If a valuer contravenes the provisions of this section or the rules made thereunder, the valuer shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees:

 

Provided that if the valuer has contravened such provisions with the intention to defraud the company or its members, he shall be punishable with imprisonment for a term which may extend to one year and with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees.

 

(4) Where a valuer has been convicted under sub-section (3), he shall be liable to—

(i) refund the remuneration received by him to the company; and

(ii) pay for damages to the company or to any other person for loss arising out of incorrect or misleading statements of particulars made in his repo

 

 Section 247 of the Companies Act, 2013 prohibited a registered valuer from undertaking valuation of any assets in which he has a direct or indirect interest or becomes so interested at any time during or after the valuation of assets.

 

The Amendment Act now prohibits a registered valuer from undertaking valuation of any asset in which he has direct or indirect interest or becomes so interested at any time during three years prior to his appointment as valuer or three years after valuation of assets was conducted by him

 

For Kashif Ali & Associates
(Company Secretaries)

Kashif Ali
FCS, LL.B, M.Com.
C-100, GF, Sarai Julena, New Friends Colony, New Delhi-110025
Ph: 9718483209  Mail : cs.alikashif@gmail.com

The Companies Amendment Act, 2017

MCA Updates 6th January 2018
CONDONATION OF DELAY SCHEME 2018”

 

Posted in: Companies Amendment Act 2017