Today, Government has released second set of draft Rules under the Companies Act 2013 and published on Ministry of Corporate Affairs website for the public comments.
The first set has already published for public comments having the total of 16 Chapters. Where as the second set of draft rules having 9 chapters.
The last date for receiving the comments on the second set of Rules is 19th October 2013. The last date for receiving the comments on the first set of Rules is 8th October 2013.
Can a Subsidiary Company hold any shares in its Holding Company? - Section 19 of the Companies Act, 2013
Section 19 of the Companies Act 2013 is notified by the Central Government on 12th September 2013.
Section 19 is basically speaks about the holding of shares between the subsidiary company and its holding company.
Whether the Subsidiary Company can hold shares in Holding Company?
As per Section 19(1) of the Companies Act 2013, no company shall hold any shares in its holding company. Also, no holding company shall allot or transfer its shares to any of its subsidiary companies, if not, such allotment or transfer of shares to the subsidiary companies shall be void
Definitions - Body Corporate / Corporation - Sec 2(11); Book and Paper & Book or Paper - Sec 2(12); Books of Account - Sec 2(13); Branch Office - Sec 2(14); Called-up Capital - Sec 2(15) - the Companies Act, 2013
Section 2: In the Companies Act 2013, unless the context otherwise requires,--
Section 2(11): “Body Corporate” or “Corporation” includes a company incorporated outside India, but does not include--
(i) a co-operative society registered under any law relating to co-operative societies; and
(ii) any other body corporate (not being a company as defined in this Act), which the Central Government may, by notification, specify in this behalf;
Government has already published the 1st set of draft Rules under the Companies Act, 2013 for public comments. The 1st set of draft Rules having 16 Chapters.
Government today announced that 2nd Set of draft Rules covering 9 Chapters will be available on MCA website from 20th September 2013 onwards for stakeholders comments.
Download the first set of draft Rules from here
Download the Forms under the draft Rules from here
Download 131 Draft Forms released by the Government under the Draft Rules for the public comments - The Companies Act, 2013
Government released the 1st phase of draft rules for public comments recently. Today, Government has also released the draft Forms for public comments.
The following forms are available for the public comments:
1. Form No.2.1 : Nomination of the person who shall, in the event of subscriber’s death or his incapacity to contract, become the member of OPC
Extension of due date for receipt of ITR-Vs belongs to AY 2011-12 and AY 2012-13 which are e-Filed in FY 2012-13
There are many taxpayers who have uploaded their Income Tax Returns electronically (without digital signature Certificate) for A.Y. 2OLl-12 [filed during F.Y. 2Ol2-L3l and for ITRs of A.Y. 2OL2-13 [filed on or after 1.4,2012], but have either not filed the corresponding ITR-V or have filed it with the local Income-tax office. ITR-V is accepted only at the Centralized Processing Center (CPC) of the Income-tax Department at Bengaluru by ordinary or speed post. Therefore, a final opportunity is being given to such taxpayers to regularize their Income-tax returns.
All such taxpayers may mail the ITR-V, by 3!st October, 2OL3, by ordinary post or speed post at Post Bag No. 1, Electronic City Post Office, Bengaluru - 560100 (Karnataka). Taxpayers who have filed their ITR-V with the local Income-tax office may again mail their ITR-V to the CPC by 31st October, 2013. Those taxpayers who have earlier mailed their ITR-V, but have not received the acknowledgement e-mail from the CPC, may mail their ITR-V to the CPC again.
The ITR-V form should be mailed to the CPC only at the above address by ordinary post or speed post. Taxpayers may note that no other place or form of delivery will be accepted.
Taxpayers may also note that without acknowledgement of the ITR-V from the CPC it would not be possible for the Income-tax Department to process the Income-tax returns or issue any refunds therefrom, as these would be treated as not having been filed with the Department.
The Companies Act, 2013 is replacing the 57 years old Companies Act. After the President given his consent on 28th August 2013, the Bill enacted as Law calling as The Companies Act, 2013.
Everyone are thinking that the new Companies Act 2013, is Simple and Smaller than Companies Act 1956. The Companies Act 1956 had 658 Sections and 14 Schedules and new Companies Act 2013 has only 470 Sections and 7 Schedules. By looking into the Sections and Pages of the bare act, it is obvious that everyone thinking is correct.
The Companies Act, 2013 contains the words "as may be prescribed" in 331 instances. This means huge amount of law to enacted by way of the Rules to be issued by the Government in process.
So, the question is still unanswered that whether the new Companies Act 2013 is really Simpler and Smaller than the Old Companies Act 1956???
Lack of Governance, Risk Management and Compliance (GRC) May Lead To Class Action Suit under The Companies Act 2013
Lack of governance, risk management and compliance (GRC) on part of a company may lead to a class action suit under The New Companies Act, 2013 thereby making the boards of companies more accountable, a top Corporate Affairs Ministry official said at an ASSOCHAM event held in New Delhi on 11th Sep 2013.
“The New Companies Act, 2013 could change landscape for corporates from legal point of view as it brings India laws to speed up with global practices,” Justice Dilip Raosaheb Deshmukh, chairman of the Company Law Board said while inaugurating the 2nd National Conference on ‘Governance, Risk Management & Compliance (GRC): Responsibility, Practice & Reward,’ organized by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).
He further said that as per the New Companies Act the board members of companies will have to oversee judicious use of working capital, while independent directors will be responsible and liable for their action, and if the consent to fraud by the management, they will be held responsible.
Highlighting the significance of technology in making GRC program successful for a company, Justice Deshmukh said, “To make sure GRC, technology has to be fully integrated into the business and risk-management function has to be a company’s overall strategy.”
“The emerging requirements and new standards internally and externally are forcing the Board and management to rethink their roles, responsibilities and discrete relations between GRC activities and this will enable to keep pace with new legislation and stakeholder expectation,” said Justice Deshmukh. “GRC is a managerial intent to assure that entities are transparently governed, specifying culture for decision-making, accountability and integrity and establishing clear directions for an organization to achieve defined goals.”
“GRC relies on proactive due diligence and adoption of best practices for operations and management,” he added. “It assures that management decisions are implemented as intended, through effective controls and the performance is measured against pre-defined metrics and policies are enforced in true spirit.”
He further said that technological innovation, globalization, complex regulation and increased accountability at senior management and board levels have significantly changed the landscape of risk-management and emerging risks of e-business has only made it more complex.
Highlighting the importance of GRC in the present scenario, Justice Deshmukh said, “It is a process by which Board of Directors set objectives for an organization and oversee progress to achieve them and it also allows the organization to operate within parameters presented by the law.”
Talking about the various risks involved in financial business, he said that new and complex products offered by foreign financial markets or institutions can have cross-border risks as their distribution can bring in serious contagious risks across global markets.
Sharing his views on compliance, Justice Deshmukh said, “A Board of Directors of any financial institution should approve and oversee institution’s strategic objectives and set a compliance culture and the board should ensure that financial institution has adequate policies and procedures that enable oversight activities to be carried out on all business lines.”
Which class of Companies should appoint at least one woman director and within what period the Companies should comply?
The Companies Act 2013 mandates the class of companies to appoint at least one woman director in their Board.
Section 149 (1) of the Companies Act, 2013 explains the minimum and maximum number of directors a Company should have in their Board.
Public Limited Company - 3 Directors
Private Limited Company - 2 Directors
One Person Company - 1 Director
Any Company - 15 Directors
However, the Company may appoint more than 15 Directors, after passing a special resolution.
The Company shall have at least one woman director for the following class of Companies:
i) every Listed Company
ii) every other Public Company having paid-up share capital of Rs. 100 Crores or more (or) turnover of Rs. 300 Crores or more
The Company has to comply the mandatory provision of appointing a woman director in the Board,
i) in the case of (i) above: within a period of one year from the commencement of the above provision
ii) in the case of (ii) above: within a period of three years from the commencement of the above mandatory provision
Definitions - Associate Company - Sec 2(6); Auditing Standards - Sec 2(7); Authorized Capital - Sec 2(8); Banking Company - Sec 2(9); Board of Directors - Sec 2(10) - The Companies Act 2013
Section 2: In the Companies Act 2013, unless the context otherwise requires,--
Section 2(6): “Associate Company”, in relation to another company, means a company in which that other company has a significant influence, but which is not a subsidiary company of the company having such influence and includes a joint venture company.
Explanation.—For the purposes of this clause, “significant influence” means control of at least twenty per cent. of total share capital, or of business decisions under an agreement;
Section 2(7): “Auditing Standards” means the standards of auditing or any addendum thereto for companies or class of companies referred to in sub-section (10) of section 143;
Section 2(8): “Authorised Capital” or “nominal capital” means such capital as is authorised by the memorandum of a company to be the maximum amount of share capital of the company;
Section 2(9): “Banking Company” means a banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949;
Section 2(10): “Board of Directors” or “Board”, in relation to a company, means the collective body of the directors of the company;