PRIVILEGES AVAILABLE TO OPC

Section	PRIVILEGES
Section 149	The Company can have a minimum one and maximum 15 directors
Section 3	The Company can be formed with a single member
Section 2(40)	Cash flow statement is not mandatory part of financial statements
Section 48	The resolution required to be passed at the general meetings of the company shall be deemed to have been passed if the resolution is agreed upon by the sole member and communicated to the company and entered in the minutes book
Section 96	Holding of Annual General Meeting is not applicable on OPC
Section 98 and 100 to 111 not applicable on OPC
Section 98	Power of Tribunal to call meetings of members, etc
Section 100	Calling of extraordinary general meeting
Section 101	Notice of the Meeting
Section 102	Explanatory Statement
Section 103	Quorum for Meeting
Section 104	Chairman of the Meeting
Section 105	Proxies
Section 106	Restriction of Voting Rights
Section 107	Voting by Show of Hands
Section 108	Voting through electronic means
Section 109	Demand for Poll
Section 110	Postal Ballot
Section 111	Circulation of Member's Resolution
Section 173	Only 2 Board Meeting in a calender year, one in each half year and at least 90 days  gap between 2 Board Meetings
Section 134(4)	Board Report may contain only the  explanations or comments by directors on reservation/ qualifications by the auditors
Section 137	The OPC is required file a copy of its financial statement along with other documents within 180 days of end of the financial year duly adopted by its member By Nikita Singh

MCA CLARIFICATION ON LOANS TO EMPLOYEES

MCA has clarified that loans and/or advances made by the companies to their employees, other than the managing or whole time directors (which is governed by section 185) are not governed by the requirements of section 186 of the Companies Act, 2013. This clarification will, however, be applicable if such loans/advances to employees are in accordance with the conditions of service applicable to employees and are also in accordance with the remuneration policy, in cases where such policy is required to be formulated.

http://www.mca.gov.in/Ministry/pdf/Circular_04_10032015.pdf

CONVERSION OF PUBLIC COMPANY INTO PRIVATE COMPANY UNDER COMPANIES ACT, 2013

Sr. No	Purpose	Attachments	Remarks
1.	Hold a meeting of its Board of directors to consider and approve the proposal for: ·         Conversion of public company into private company. ·         Alteration of Main Object Clause	The following resolutions must be passed at the meeting: ·         To approve the proposal for conversion of the company into private company. ·         To fix time, date and venue for holding an extraordinary general meeting of the company. ·         To approve notice for the general meeting along with the explanatory statement as required under Section 102 of the Act. ·         To authorize the Director to issue the notice of the general meeting on behalf of the Board.	·         The notice for the general meeting must contain text of the following special resolutions, which will be required to be passed at the general meeting. (a)     Special resolution for altering the articles of the company, as required under Section 14 of the Companies Act, 2013. (b)    Special resolution for changing the name of the company as required under proviso to Section 13 of the Act. (c)     Special resolution for altering the memorandum of association (name clause) of the company in accordance with Section 16 of the Act. (d)    Special Resolution for Alteration of Object Clause
2.	Hold general meeting and have the aforementioned special resolutions passed.
	File Form MGT 14: Within thirty days of passing of the special resolutions.	Attachments: ·         Copy of resolution along with explanatory statement under Section 102; ·         Amended copy of AOA & MOA. ·         Copy of Resolution for alteration of Object Clause
	File e-form No. INC-27: ·         For effecting the conversion of a public company into a private company.	Attachments: ·         Minutes of the members' meeting; ·         Altered MOA & AOA; ·         Order of competent authority; ·         Order for condonation of delay; ·         Optional attachment(s) (if any).	·       Any alteration having the effect of conversion of a public company into a private company shall not take effect except with the approval of the Central Government* which shall make such order as it may deem fit. ·       Every alteration of the articles under this section and a copy of the order of the Central Government* approving the alteration as per sub-section (1) shall be filed with the Registrar, together with a printed copy of the altered articles, within a period of 15 days in such manner as may be prescribed, who shall register the same. * This is to clarify that as section 14(1) second proviso of the Companies Act, 2013 has not been enforced as on the date, Thus order of tribunal is not applicable as on date of this article.
	Notice in Newspaper:		·       If the Registrar of Companies so directs, publish a notice in newspaper(s) as per his direction.
	Surrender to the Registrar, the Certificate of Incorporation of the company in order to obtain fresh Certificate of Incorporation consequent upon change of name on conversion of the company into a private Company.		·       It is important to note that the company becomes a private company with effect from the date of approval of the Central Government under the proviso to Section 14 of the Companies Act, 2013, however the change in the name of the company shall be effective from the date of issue of fresh Certificate of Incorporation consequent upon conversion into a private company, by the Registrar of Companies.

Extension for filing CRA-2 for Appointment of Cost Auditor

By Circular http://mca.gov.in/Ministry/pdf/General_Circular_02_2015.pdf MCA has further extended the time limit for filing CRA-2 for Appointment of Cost Auditors upto 31/03/2015.

CONVERSION OF PRIVATE COMPANY INTO ONE PERSON COMPANY

To avail the advantages of One Person Company, many of the Corporates are willing to convert their small Private companies into One Person Company (OPC). The conversion will reduce the compliance manifold, this is one of the key reasons of such a conversion. 

Which Private Company can convert into OPC:

Any private company other than a Company registered under section 8 of the Companies Act, 2013 (or section 25 of the Companies Act, 1956) having a paid-up capital of less than Rs. 50 Lac and an average turnover of less than Rs. 2 Crore, in the specified period, can convert itself into OPC.

Laws governing conversion of Private Company Into OPC:

• Section 18 of Companies Act, 2013
• Rule 7(4) of the Companies (Incorporation) Rules, 2014

Procedure :

1. Board Meeting: 

• Approve the conversion subject to approval of members;
• Authorise Directors for providing Affidavit that the conforming that all members and creditors of the company have given their consent for conversion, the paid up capital company is rupees 50 lakhs or less or turnover is less than rupees 2 crores as the case may be;
• Authorise Directors for taking NOC from all the members & Creditors of the Company on the Conversion.
• Calling of General Meeting

     2. General Meeting:

• Pass Special Resolution for conversion of company into OPC

    3. E-filing & Attachments:

        

• MGT - 14: Withing 30 days of passing of the Special Resolution
• INC-6: With NOC received from members & Creditors, Affidavit by Directors, Special Resolution, List of Members & Creditors, Latest Audited Balance Sheet & Profit & Loss Account.INC-6 shall be filed after MGT-14 has been filed and approved. 
• INC-3: The Consent of Nominee in INC - 3 alongwith his/her PAN card and residential proof shall also be attached with INC-6.

~By Nikita Singh~

Checklist for Issue of Non-Convertible Debentures: Unlisted Company(Companies Act, 2013)

Please note as per the provisions of the Companies Act, 2013; for issue of Non-Convertible Debentures (NCDs) whether it be private company or public company if the securities (which includes debentures), if it is proposed to be listed then the listing agreement and securities laws shall be complied with. The Below mentioned checklist only covers the provisions mentioned in the Companies Act, 2013.

CHECKLIST FOR ISSUE OF NCDs

Sr. No.	Activity	Date	Remark
1.	Board Meeting: (i)Proposal for issue of Debentures (iii)  Approval of draft offer letter and authorization to issue the offer letter subject to approval by shareholders (iv) Registering the name of persons to whom offer to be made (v) Authorization for opening of bank account for the purpose of the said issue (vi) Calling of general meeting		The offer letter shall be sent to the person whose name is recorded for the purpose within 30 days of recording his name.
2.	General Meeting: Shareholders’ approval for: (i)                  Borrowing Limits (ii)                Creation of Charge (iii)               Issuance of Debentures		MGT -14 to be filed within 30 days of passing of special resolution This resolution will be valid for a period of one year.
3.	Sending of offer Letter & Opening of Bank Account: The offer letter shall be sent after approval by the shareholders and the bank account shall be opened for receiving the application & allotment money		Offer letter shall be sent within 30 days of registering the name of proposed applicant
4.	Filing of Offer letter with ROC: Within 30 days of circulation of offer letter, it shall be filed with ROC		PAS-4 & PAS-5 as attachment to GNL - 2
5.	Receiving of Money: The applicant shall made the application in the format given with the offer letter for allotment of securities and shall pay the money from his bank account.
6.	Board Meeting: (i)After closure of offer the allotment shall be made to the applicant from whom the money has been received. The allotment shall be made within 60 days of receiving of the money. (ii) Approval of drafts of agreement for creation of charge & Authorization to director for signing the same.		Here Agreement means the agreement if any to be entered with the debenture holder. MGT-14 for board resolution for allotment of debentures
7.	Return of Allotment: Within 30 days of allotment return of allotment shall be filed with ROC		PAS - 3
8.	Details of offer and allotment shall be maintained by the company in PAS - 5
9.	Creation of charge: After allotment of debentures, charge shall be created in favour of the debentureholder, and the return for creation of charge shall be filed with ROC within 30 days of creation of charge		CGH - 9
10.	Issue of Debenture Certificate: Within 6 months of allotment of debentures

~By Nikita Singh~

THE COMPANIES (AMENDMENT) BILL, 2014

 The Companies (Amendment) Bill, 2014 has been passed by Lok Sabha. This bill brings out the amendments to clear the practical difficulties and to promote the Commerce & Industry. The key highlights of the Bill are as follows:

1.  It removes the minimum pai-up capital requirements for incorporating a private/public company;

2.  The requirement of having a Common Seal is being optional from mandatory, so the consequential requirements of use of the Common Seal have also been amended;

3. The Bill has prescribed the punishment/ consequences for acceptance of public deposit in non-compliance with the deposit provisions read with the rules under the Act. i.e.

(i)   The amount of deposit along with the interests due will have to be returned;

(ii)   In addition to the above, the Company shall be liable for a fine not less than Rs. 1 Crore but which may extend to Rs. 10 Crores;

(iii)  every officer of the company who is in default shall be punishable with imprisonment which may extend to seven years or with fine which shall not be less than twenty-five lakh rupees but which may extend to two crore rupees, or

with both:

4.  The great relief provided is that no person shall be entitled to inspect or obtain copies of the resolutions filed under section 117 of the Act;

5.For declaring dividend previous year losses and depreciation shall first be set off against the profit of the current year;

6. Again the major practical difficulty has been removed in the benefit of the public that only the dividend un-paid or unclaimed for consecutive 7 years shall be transferred to IEPF and not the shares;

7.Enabling threshold limits for reporting of frauds by the auditors;

8.  Empowering Audit Committee to approve the related party transactions , as may be prescribed;

9.The exemptions for applicability of section 185 , earlier mentioned in rules, has been added to section itself;

10.  Special resolution being replaced by ordinary resolution for approval of related party transactions at places, also exempted related party transactions between holding and wholly owned subsidiary, where consolidated accounts shall be made and presented in general meeting for shareholders’ approval;

11. Bail restrictions to apply only for offence relating to fraud u/s 447;

12. winding up cases to be heard by 2-member Bench instead of a 3-member Bench;

13. Special Courts to try only offences carrying imprisonment of two years or more.

As the bill has been approved by Lok Sabha, it is hopeful to get the further approvals soon and became the amendment act. But the corporate world and the professionals are still waiting for the proposed privileges to private companies to get approved, the draft of which has already been circulated by the Ministry. Furthrer the said bill doesn’t refer to the biggest problem of approval of related party transactions in Closely held companies and the difficulties of loan to directors etc. i.e. companies having common directors.

~By Nikita Singh~

498A: THE GLORIOUS CRIME???

photo by : http://www.freeclassifieds.in/classified-ad-41810.html

In recent past, I came out of theater with a thousand questions in my mind after watching “Daawat-E-Ishq”. Surely, all the girls are not “Gullu” who fall in love with the honesty of “Taru” and will have a happy ending by a proper married life. The movie not only raised the issue of 498A but with the same effort the evil of dowry was also raised. I give it a 10 on 10 to show both the sides of a coin to reflect how both the sex are getting dragged into the crime.

We all are more or less aware about the crime called “Dowry” and to protect the society from the same and similar crimes the law came in the form of “498A” of The Indian Penal Code. So, with the law came its use and misuse in the form of Needy and Greedy. Let’s read the most talked about or heard about section to be aware of the law:

Section 498A of The Indian Penal Code:

Husband or relative of husband of a woman subjecting her to cruelty.—Whoever, being the husband or the relative of the husband of a woman, subjects such woman to cruelty shall be pun­ished with imprisonment for a term which may extend to three years and shall also be liable to fine. Explanation.—For the purpose of this section, “cruelty” means:

(a) any wilful conduct which is of such a nature as is likely to drive the woman to commit suicide or to cause grave injury or danger to life, limb or health (whether mental or physical) of the woman; or

(b) harassment of the woman where such harassment is with a view to coercing her or any person related to her to meet any unlawful demand for any property or valuable security or is on account of failure by her or any person related to her to meet such demand.

Don’t raise your eyebrows on only plain reading of the section, the misuse is, the so called beloved newly married wife will go to the nearby police station lodging the complaint against the Husband, his mother, sister (mostly along with the husband the female members of the family and senior citizens are dragged, taking the advantage that no man will let the female members and senior citizens go to jail) on the basis of which the persons against whom the complaint has been lodged are arrested immediately, without sufficient investigation and put behind bars on a non-bailable term. Even if the complaint is fake, you shall be presumed guilty until you prove that you are innocent. Mostly in such false cases a handsome amount is asked to take the charges back and to go for a mutual divorce. Even the victims agrees to pay to save themselves from the harassment and damage to their social reputation, the main reason be mostly to protect the female members from the so called police –court-kachahari matters.

Now, read some of the related facts used in judgment given by Honorable Supreme Court of India in the matter of ARNESH KUMAR Vs STATE OF BIHAR & ANR.  dated 2^nd July, 2014:

“There is phenomenal increase in matrimonial disputes in recent years. The institution of marriage is greatly revered in this country. Section 498-A of the IPC was introduced with avowed object to combat the menace of harassment to a woman at the hands of her husband and his relatives. The fact that Section 498-A is a cognizable and non-bailable offence has lent it a dubious place of pride amongst the provisions that are used as weapons rather than shield by disgruntled wives. The simplest way to harass is to get the husband and his relatives arrested under this provision. In a quite number of cases, bed-ridden grand-fathers and grand-mothers of the husbands, their sisters living abroad for decades are arrested. “Crime in India 2012 Statistics” published by National Crime Records Bureau, Ministry of Home Affairs shows arrest of 1,97,762 persons all over India during the year 2012 for offence under Section 498-A of the IPC, 9.4% more than the year 2011. Nearly a quarter of those arrested under this provision in 2012 were women i.e. 47,951 which depicts that mothers and sisters of the husbands were liberally included in their arrest net. Its share is 6% out of the total persons arrested under the crimes committed under Indian Penal Code. It accounts for 4.5% of total crimes committed under different sections of penal code, more than any other crimes excepting theft and hurt. The rate of charge-sheeting in cases under Section 498A, IPC is as high as 93.6%, while the conviction rate is only 15%, which is lowest across all heads. As many as 3,72,706 cases are pending trial of which on current estimate, nearly 3,17,000 are likely to result in acquittal.”

The difference between the dowry and the 498A is the demand of dowry is made before marriage in 90% of the cases and we have a choice in our hand to say a clear “NO” to it. Which means the society needs to say “NO” for the marriages where dowry is demanded, but what about 498A? It starts with a happy marriage, where the boy and his family go for an actual marriage but the girl and her family goes for a so called “Glorious Crime of Marriage” to earn some easy money.

Following are some of the steps which you can use to protect yourself from 498A if you are planning to get married and you are MALE:

1.      Do proper background checkup of the prospective bride.

2.      Check her and her families back ground, like if she has a sister, what is her marital status, if divorcee the reasons and all.

3.      Specially, if they have recently shifted to the home, you have been taken to meet them, check from where they belong to, where they were living earlier and the checks on native place.

4.      If the spending of the family is more than their income, stay away.

5.      If even before marriage, the girl have so many emotional things to tell you, like how much she loves you, how good a wife she will turn to be, how much respect she is going to give your parents, what a bad past she has but faced that bravely etc

6.      If you are going for a second marriage and the girl is also a divorcee, better to check what charges she has made up for his ex-husband and not only read the court orders.

7.      If the girl has a full-fledged relationship, might be some close relative too and a frequent visitor to her family or her town, give a deeper thought or investigate/enquire deep down to the root or time to probe further.

8.      If the girl has a close lawyer/matrimony consultant friend specially a male, who might help her in finding the prospective groom/divorce case, think twice.

9.      If you are going for a marriage from some matrimonial site, better to hire a detective agency side by side for the short listed girls, it may cost you a few thousand rupees but it may save a fortune too.

10.  Check the birth certificate/ marksheets etc. of the girl in original.

In short and simple, I will sum-up 498A as a “Sword with double sharp edge”/ Do-Dhari-Talwar. It is very useful for the one who are being victims of the crime of “Dowry and harassment” but the real question is in how many genuine cases the wife was able to prove the misdeed, as of the facts the one who shall be sheltered under the law, has mostly been deprived by the delayed justice, as well said justice delayed is justice denied. On the other hand the greedy, who is making money by misuse of it, by charging the groom and his family under the fake cases are not only making some easy money, but also the person and his family charged by the fake case are drained mentally, physically and financially. Ironical fact of this legal provision is the sisters/mothers and other female relatives of the groom are treated as criminals but the wife and her family even when the fake charges are proved get released easily.

The law shall provide equality for all, else soon the proverb that the Women is weaker section of society will turn as Men is weaker section of society. I personally plea for such a law, which protect the rights, provide equality and also include strict provisions for those who misuse the law and play with it for their personal benefits.

~By Nikita Singh~