Major Initiatives and Achievements of the Ministry of Corporate
Affairs in the Last One Year
Following
are the major initiatives and achievements of the Ministry of Corporate Affairs
in the last one year.
Furthering
ease of doing business - Companies Act, 2013:
· 16 amendments in the Companies Act, 2013 approved by the
Parliament– these amendments are aimed at facilitating business and addressing
concerns raised by stakeholders. A summary of the amendments is enclosed at
Annexure-1.
· A new integrated e-Form INC-29 has been made available w.e.f
1stMay, 2015 for companies. The Form does away with filing multiple
applications/forms saving time and payable fees. Detail may be seen
atAnnexure-2.
· 24 amendments in Rules under the Companies Act, 2013, 8 Removal of
Difficulty Orders as well as many clarifications were also issued.
· Certain prescribed forms were discontinued or merged with existing
forms. Other Forms were also simplified.
Setting
up of a Committee to look into further modifications required in the Companies
Act, 2013.
·
A broad based Committee consisting of representatives of the
Institute of Company Secretaries of India, the Institute of Chartered
Accountants of India or some industry chambers and from the Ministry is being
constituted to look into requirement for further changes in the Companies Act,
2013.
Notification
of Indian Accounting Standards (Ind AS):
· Consequent to announcement in the budget of Financial Year 2014-15
(para 128), accounting standards converged with global standards, namely,
International Financial Reporting Standards (IFRS) were framed in consultation
with the Institute of Chartered Accountants of India and National Advisory
Committee on Accounting Standards. These thirty nine standards, called Indian
Accounting standards (Ind AS) have been notified on 16.02.2015 as Companies
(Indian Accounting Standards) Rules, 2015. These accounting standards are
significantly congruent with the global standards, with minimum carve-outs and
are expected to boost investor confidence.
Constitution
of NCLT and NCLAT
· The Constitution Bench delivered its final order on the long
standing litigation. The constitution of the NCLT is being taken up in an
expeditious manner.
ANNEXURE
1
Companies
(Amendment) Bill, 2015
SUMMARY
OF AMENDMENTS AND THE OFFICIAL AMENDMENTS
1.
Omitting requirement for minimum paid up share capital, and
consequential changes. (For ease of doing business) -[section 2(68)/2(71) of
the Companies Act, 2013 (Act)].
2.
Making common seal optional, and consequential changes for
authorization for execution of documents. (For ease of doing business)
-[sections 9, 12, 22, 46 and 223 of the Act].
3.
Doing away with the requirement for filing a declaration by a
company before commencement of business or exercising its borrowing powers.
(For ease of doing business) -[Omission of section 11 of the Act and
consequential change in section 248]
4.
Prescribing specific punishment for deposits accepted under the
new Act. To deal with defaults in repayment of depositor. (For protection of
depositors' interests) – [New Section 76A of the Act]
5.
Prohibiting public inspection of Board resolutions filed in the
Registry. (To provide for confidentiality of commercial interests discussed in
resolutions) -[section 117(3) of the Act].
6.
Including provision for setting off past losses/depreciation before
declaring pidend for the year- (Standard prudential clause).[ section 123(1) of
the Act]
7.
Rectifying the requirement of transferring equity shares for which
unclaimed/ unpaid pidend has been transferred to the Investor Education
and Protection Fund (IEPF) even though subsequent pidend(s) has been claimed
-[section 124(6) of the Act].
8.
Enabling provisions to prescribe thresholds beyond which fraud
shall be reported to the Central Government (below the threshold, it will be
reported to the Audit Committee/ Board). Disclosures for the latter category
also to be made in the Board’s Report. [section 143(12) and 134(3) of the Act].
9.
Empowering Audit Committee to give omnibus approvals for related
party transactions on annual basis. (Align with SEBI policy and increase ease
of doing business)– [section 177(4) of the Act].
10.
Exemption u/s 185 (Loans to Directors) provided for loans to
wholly owned subsidiaries and guarantees/securities on loans taken from banks
by subsidiaries. (This was provided under the Rules but being included in the
Act as a matter of abundant caution).[ section 185(1) of the Act].
11.
Replacing ‘special resolution’ with ‘resolution’ for approval of
related party transactions by non-related shareholders. (Balance the process
for majority supported genuine commercial decisions) -[section 188(1) of the
Act].
12.
Related party transactions between holding companies and wholly
owned subsidiaries exempted from the requirement of approval of non-related
shareholders. -[section 188(1) of the Act].
13.
Bail restrictions to apply only for offences relating to fraud u/s
447. [section 212(6) of the Act].
14.
Winding up cases to be heard by 2-member Bench instead of a
3-member Bench. - [section 419 of the Act].
15.
Special Courts to try only those offences carrying imprisonment of
two years or more. (Rationalization of jurisdiction, to let magistrates try
minor violations, with the objective of speeding up disposal).[section 435 and
436 of the Act].
16.
Rationalizing the procedure for laying draft notifications
granting exemptions to various classes of companies or modifying provisions of
the Act in Parliament, in order to ensure speedier issue of final
notifications. (For a faster process of giving exemptions to classes of
companies). [section 462 of the Act].
ANNEXURE 2
NEW FORM
INC-29
1. The integrated e-Form INC-29 is availablewith effect from
01.05.2015 for One Person Company, Private Company, Public Company and Producer
Company.
2.
INC-29 does away with filing of multiple applications/forms saving
time and payable fees. It combines the processes relating to:-
i. Allotment of Director Identification Number (DIN) (up to three
Directors),
ii.
Incorporation of a company, and
iii.
Appointment of first Directors of the company.
3.
The new e-Form does away with the need for reserving a name for
the company prior to applying for its incorporation.
4.
Declarations are in-built in the e-Form. Separate attachments
containing such declarations are not required.
5.
The e-Form is enabled for future integration with e-Biz platform
of DIPP for generating applications for PAN, ESIC and EPFO numbers on the
platform and therefore provide a single interface for these applications also.