LEGAL UPDATE: RATIFICATION OF MISTAKE IN FROM 1, 1A AND 44

Ministry of Corporate Affairs has issued a circular dated 21st December, 2012, Mistakes made in the filed e-form 1, 1A and 44 can be rectified via form 68 within 365 days of approval of the said forms by the ministry on payment of fee of  Rs.  1000/- in case of e-form 1 & 1A and Rs. 10,000/- in case of e-form 44.

It has been further stated in this circular such forms filed for the companies incorporated before 2009 can also be rectified within 180 days of the effective date of the circular i.e. 23rd December, 2012.

http://www.mca.gov.in/Ministry/pdf/General_Circular_42_2012.pdf

COMPANIES BILL, 2011 APPROVED BY LOKSABHA

Companies Bill, 2011 get approved by the Loksabha yesterday 18th December, 2012 along with the amendments and now to be presented in the Rajyasabha for approval.

A copy of bill to be presented in loksabha was made available on MCA's site:
http://www.mca.gov.in/Ministry/pdf/The_Companies_Bill_2011.pdf

CHANGE OF NAME OF PRIVATE COMPANY AND UNLISTED PUBLIC COMPANY

Companies usually change their name to match the name of the group of the companies to avail of the goodwill attached to the name of the group, at times they change their name for some other reasons too such as to match their new line of business etc. Procedure for change of name of the Company both for private companies as well as unlisted public companies are as follows:

CSR: CORPORATE SOCIAL RESPONSIBILITY IN INDIA:

Confusing and non-mandatory means voluntary as per Indian laws, Why to bother to know this then????

Because even if not compulsory corporate like TATA and Reliance are fulfilling this part upto their extent and the government is planning to make it mandatory for corporate fulfilling certain criteria. Moreover no knowledge is harmful at all.

In easy words corporate social responsibility commonly known as CSR is the return from the corporate to the society the resources for their intake from society. In more known words its like preserving resources while using them for our next generation. 

COMPANY SECRETARY: APPOINTMENT, RESIGNATION, PROCEDURE TO BE FOLLOWED IF MANAGEMENT DOES NOT FILE FORM 32 AFTER RESIGNATION

APPOINTMENT OF COMPANY SECRETARY IN WHOLE TIME EMPLOYMENT:

As per section 383A every Company having a paid-up capital of Rs. 5 Crore or more need to appoint a Company Secretary in Whole Time Employment. If the Company fails to do so every officer in default shall be punishable with fine upto Rs. 5000 for each day of default.

For appointment of Company Secretary it is the general practice to appointment him by passing a board resolution and within 30 days of appointment Form 32 need to be filed with the respective ROC.

Board Resolution for Appointment of Company Secretary:

"RESOLVED THAT pursuant to the provision  of Section 383A and other applicable provision ( including any modification or re-enactment thereof ), if any, of the Companies Act, 1956 the consent of the  Board be and is hereby accorded to appoint Mr. A holding the prescribed qualification under Section 2(45) of the Companies Act, 1956 read with Rule 2(1) of the Companies ( Appointment and Qualification of Secretary ) Rules, 1988 (as amended from time to time) as Whole time Secretary of the Company with effect from ------, to perform the duties which may be performed by a secretary under the Companies Act, 1956 and any other duties assigned to him by the Board from time to time.

CHANGE IN FINANCIAL YEAR

Company follows a financial year of April to March or of January to December, which is decided either by the articles of association of the Company or by directors in the first board meeting by passing a board resolution. After once fixing the financial year of the Company the Board may afterwards decide to change the financial year due to various financial, legal or business reasons. Say the Company is following the financial year of January to December and now it is willing to change it to April to March, what shall be the procedure for doing it?

For such a change in financial year the Board must pass a resolution and inform the stock exchange about such a change in the financial year of the Company in case of listed company and  the company may at its own intimate ROC about it, though no such intimation to ROC has been specified in the Companies Act, 1956.

FORMAT OF BOARD RESOLUTION FOR CHANGE IN FINANCIAL YEAR:

JUDGEMENT OF KOLKATA HIGH COURT ON DEFUNCT COMPANY NOTICE REPLY

In the recent Kolkata High Court Judgment on BASANTI COTTON MILLS PVT. LTD. Vs REGISTRAR OF COMPANIES, WEST BENGAL 

As per the judgment:

A Company can be strike off by the Registrar of the Companies as a Defunct Company only if the company in reply to the notice of defunct company issued to it asserts that it no more carry on any business or the Company do not reply the notice. If in reply to the notice the company affirms otherwise its name can’t be strike off, though the registrar has all the authorities to verify and raise query on the working status of the Company.

Another point of importance is section 3(5) of the Companies Act, 1956 as per which the name of the Company can be strike off if it fails to maintain the minimum paid-up capital requirement, but again in this situation too it shall be an un-disputed and absolute matter of not fulfilling the minimum paid-up capital requirement.

Copy of Judgment : http://judis.nic.in/Judis_Kolkata/detail.aspx

The information given in this blog is the personal understanding of the writer and shall not be used as a conclusive material the content stated/mentioned here is subject to changes by respective government/authorities in the applicable laws. Writer shall not be liable for any direct or indirect damages caused to any person acting solely on/based upon the information provided herein.

TIME LIMIT FOR FILING XBRL BALANCE SHEET FOR THE FINANCIAL YEAR 2011-12

MCA has issued circular on 25th October, 2012 to extend the time limit for filing balance sheet in XBRL form from 15th November, 2012 (as per circular dated 6th July, 2012) to 15th December, 2012.

Now the time limit for filing Balance Sheet for the financial year 2011-12 in XBRL form is 15th December, 2012 or within 30 days of AGM whichever is later.

MCA Circular http://www.mca.gov.in/Ministry/pdf/General_Circular_34_2012.pdf  dated 25/10/2012

MCA Circular http://www.mca.gov.in/Ministry/pdf/General_Circular_16_1_2012_XBRL.pdf dated 06/07/2012

OFFICER IN DEFAULT

If a Company made default in compliance of the applicable legal provisions, who will be held responsible for it? Officers in default. Who are the officers in default? As per section 5 of the Companies Act, 1956 following persons are defined as officers in default:

(i)                 the managing director or managing directors;

(ii)               the whole-time director or whole-time directors;

(iii)             the manager;

(iv)               the secretary means the Company Secretary;

(v)                any person in accordance with whose directions or instructions the Board of directors of the company is accustomed to act;

(vi)              any person charged by the Board with the responsibility of complying with that provision:

(vii)            Provided that the person so charged has given his consent in this behalf to the Board;

(viii)          where any company does not have any of the officers specified in clauses (a) to (c), any director or directors who may be specified by the Board in this behalf or where no director is so specified, all the directors:

If a person has been charged with the responsibility of complying provisions the ROC/MCA shall be informed about this by filing Form 1AB.

To give more clarity about the position of nominee directors, independent director, director appointed by the government and in case no director has been named as managing director or so, MCA issued a master circular dated 29^th July, 2011.

As clarified by the MCA the nominee director if appointed by the investors and/or banks, financial institutions etc. can be saved from the liability as officer in default if mentioned so in the agreement for his appointment.

No director appointment by the government shall be an officer in default. It further clarified that a non-executive director will be an officer in default shall be determined on the basis of diligence exercised by him at the time of doing such act as per which officer in default is to be decided.

For further more details check http://www.mca.gov.in/Ministry/pdf/Circular_1-2011_28july2011.pdf

FOR ANY FURTHER QUERY RELATED CONTACT THE BLOGGER AT nikita.1.singh@gmail.com .

The information given in this blog is the personal understanding of the writer and shall not be used as a conclusive material the content stated/mentioned here is subject to changes by respective government/authorities in the applicable laws. Writer shall not be liable for any direct or indirect damages caused to any person acting solely on/based upon the information provided herein.

MCA CIRCULAR ON XBRL FILING DEFAULTS

Ministry of Corporate Affairs has issued circular dated 16^th October, 2012 to point out the mistakes and defaults made in XBRL filings for the year 2010-11. It has requested the respective institutes to give training or issue guidelines for it members to let them learn the proper use of XBRL to make disclosures which must not be diluted or misrepresent the facts about the company’s financials.

It has also pointed out few major mistakes made in the XBRL Filings for the year 2011-12. Please follow the link to read the circular http://www.mca.gov.in/Ministry/pdf/General_Circular_33_2012.pdf

Appointment of Statutory Auditor(s)

·         Appointment of First Auditors:

As per section 224(5) of the Companies Act, 1956 First Auditors of the Company shall be appointed within 30 days of registration of the Company by the Board of Directors of the Company, and if the Directors fail to appoint the auditor as such, the auditor may be appointed by the members of the Company in general meeting.

The First auditors appointed by the Board shall hold the office till the conclusion of the first annual general meeting unless removed by the shareholders in general meeting by giving at least 14 days prior notice and nominating the new auditors.

·         Appointment of Subsequent Auditors:

As per section 224(1) of the Companies Act, 1956 every company shall appoint the auditor in its annual general meeting who will hold the meeting till the conclusion of the next annual general meeting.

·         Casual Vacancy of the Auditors and Appointment in Casual Vacancy:

Casual vacancy may be of two types:

1.      Caused by death: By death of the auditor in his office, such a vacancy may be filled by the Board by passing a Board Resolution.

2.      Caused by Resignation: Such a vacancy can be filled by the members of the Company in extra-ordinary general meeting.

·         Procedure for appointment of Statutory Auditor:

1.      Before proposing appointment of the auditor, take the letter from the auditor to the effect that if the appointment/re-appointment will be made, it will be within the limit specified u/s 224(1B) of the Companies Act, 1956.

2.      Within 7 days of the appointment/re-appointment of the auditor the Company shall inform the Auditor about the appointment/re-appointment.

3.      Within 30 days of receiving the letter of appointment from the Company the auditor must communicate to the respective ROC about the appointment by filing e-form 23B.

·       

          Remuneration of the Statutory Auditor:

The remuneration of the auditor shall be decided in the general meeting or by the Board if they authorised to do so in the general meeting. If in the general meeting the resolution mention as “such remuneration as may be agreed by the Board and the auditors” then after general meeting a Board meeting need to be conducted for determination of remuneration of the auditor.