Companies (Incorporation)Third Amendment Rules 2019

MCA vide Companies (Incorporation)Third Amendment Rules 2019 dated 29.03.2019 , has notified that the application (SPICe)for incorporation of a Company shall be accompanied by a linked e-form AGILE (Application for the registration of Goods & Service Tax Identification Number GSTIN) , Employees’s State Insurance Corporation (ESIC) registration plus Employees' Provident Fund Organisation Registration ( EPFO) with effect from 31st March 2019.

G.S.R........(E). In exercise of the powers conferred by sub-sections (1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Incorporation) Rules, 2014, namely: -

1. (1) These rules may be called the Companies (Incorporation) Third Amendment Rules,2019.

   (2) They shall come into force on the date of publication in Official Gazette.

2.     In the Companies (Incorporation) Rules, 2014 (hereinafter referred to as the said rules),

i) after rule 38, the following rule shall be inserted,  namely.-

(38A. Application for Registration of Goods & Service Tax Identification Number (GSTIN, Employees' State Insurance Corporation (ESIC) registration and Employees' Provident Fund Organisation (EPFO) registration

The application for incorporation of a company under rule 38 shall be accompanied by e-form AGILE (lNC 35) containing an application for registration of the following numbers, namely.

(a) GSTIN with effect from 31st March, 2019

(b) EPFO with effect from 8th April, 2019 

(c) ESIC with effect from 15th April, 2019

ii) in the said rules, after Form INC-34, the following form shall be inserted, namely: -

INC-35

MCA notification dated 29.03.2019:-                                 http://www.mca.gov.in/Ministry/pdf/companiesINC3rdAmendmentRules_30032019.pdf

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ANNUAL GENERAL MEETING UNDER COMPANIES ACT 2013

The Companies Act mandates every company to hold a meeting of its members during a calendar year by following a specified procedure given in Act, rules and Secretarial Standards thereof. Such meeting is called Annual General meeting. Annual General Meeting gives a platform to its stakeholders to get information about the Company's Financial position and discuss the affairs of the Company and take decisions as per the prescribed procedure. 

SECTION 96- ANNUAL GENERAL MEETING 

 Every company other than a One Person Company shall in each year hold in addition to any other meetings, a general meeting as its annual general meeting 

There should not be a gap of not more than fifteen months between two Annual General Meetings. 

* in case of the first annual general meeting, it shall be held within a period of nine months from the date of closure of the first financial year of the company. 

* in any other case, within a period of six months, from the date of closure of the financial year: In this case, the last day to hold Annual General meeting would be 30th September of every year.

Note-  If a company holds its first annual general meeting , it shall not be necessary for the company to hold any annual general meeting in the year of its incorporation.

Every annual general meeting shall be called during business hours, that is, between 9 a.m. and 6 p.m. on any day that is not a National Holiday and shall be held either at the registered office of the company or at some other place within the city, town or village in which the registered office of the company is situate.

Annual General Meeting of unlisted Company may be held at any place in India if consent is given in writing or by electronic means by all members in advance

National Holidays Means and includes a day declared as National Holiday by the Central Government.

The Central Government may exempt any Company from Compliance of Section 96 subject to any conditions. 

BUSINESS TO BE TRANSACTED AT ANNUAL GENERAL MEETING

Broadly, There are two types of business transacted at Annual General Meeting 

1.  ORDINARY BUSINESS-

(i) the consideration of Financial statements and the reports of the Board of Directors and Auditors,

(ii) the declaration of dividend,

(iii) the appointment of directors in place of those retiring,

(iv) the appointment of, and fixing of the remuneration of, the auditors.

2. SPECIAL BUSINESS: A part from above mentioned business, all other business shall deemed to be special business.

WHO CAN ATTEND ANNUAL GENERAL MEETING

1. Board of Directors 

2. Members either in person or through proxy

3. Auditors
4. Debenture Trustee, if any
5. Secretarial Auditor, if any.

PUNISHMENT FOR CONTRAVENTION OF SECTION 96

If any default is made in holding the meeting, the Company and every officer in default shall be punishable with fine which may extend to one lakh rupees.

In case of continuing default, five thousand rupees for every day during such default continues.

National Company Law Tribunal/ NCLT on application of member of the Company call or direct the calling of Annual General Meeting and give such ancillary or consequential directions as the Tribunal thinks expedient. 

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ANNUAL E-FILING AS PER COMPANIES ACT 2013

Every Company incorporated under Companies Act 2013 or any previous Act is required to file financial statements along with Annual return every year in the following E-forms with the Registrar of Companies:- 

AOC4- For Filing Balance Sheet

AOC 4 CFS- For Filing Statement containing features of consolidated financial statements of Group Companies

AOC 4 XBRL- For Filing Financial Statements of certain class of Companies.

MGT-7- For Filing Annual Return of Company having share Capital.

CRA-4- For Filing Cost Audit Report of certain class of Companies.

 * There are certain class of Companies which are required to file their financial Statements in XBRL

1) All Companies which are listed in any stock Exchange in India including their subsidiaries, 

2) All Companies having paid up capital of 5 crores and above, or

3) All Companies having turnover of  100 crores and above, or

4) All companies which are required to maintain their accounts as per Companies (Indian Accounting Standards) rules 2015. 

EXEMPTION FROM XBRL FILING

1) Banking Companies

2) Power Companies

3) Non Banking Financial Companies

4) Insurance Companies.

DUE DATE OF FILING 

AOC4/AOC4 CFS/ AOC 4 XBRL

In case of One Person Company- with in 180 days from closure of Financial Year

In all other Cases - with in 30 days from the Date of Annual General Meeting.

MGT-7

With in 60 days from date of Annual General Meeting.

CRA-4

With in 30 days from the date of receiving Cost Audit Report.

* Form CRA-4 is required to be filed by Companies satisfying the limits specified under Companies Act 2013.

PENALTY FOR NON FILING

For Company- Rs.1000 for every day during which the failure continues but which shall not extend Rs. 10,00,000.

For Officers- Imprisonment upto Six months or with fine which shall not less than one lakh Rupees but shall not extend five lakh Rupees.

As per Companies(Registration Offices and Fees) Second Amendment Rules 2018- 

1) If case a document required to be filed under section 92(Annual return)and Section 137(Financial Statements) of the Act after 30.06.2018, following additional late fees to be paid

Delay beyond period mentioned under section 92(4), additional fees would be 100 Rupees Per day;

Delay beyond period mentioned under section 137(2) , additional fees of 100 rupees per day. 

2) In all other cases following additional fees would be paid;

Upto 30 days-                                          2 times of normal fees

More than 30 but upto 60 days-               4 times of normal fees

More than 60 but less than 90 days-         6 times of normal fees

More than 90 days but less than 180 days -10 times of normal fees

Moe than 180 days-                                     12 times of normal fees

* plus 100 per day wef 11.07.2018

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CORPORATE SOCIAL RESPONSIBILITY AS PER SECTION 135 OF COMPANIES ACT 2013

Corporate Social Responsibility or CSR is a business model that company follows to integrate social and environmental concerns in their business operations. CSR is Company's effort to pay back the stakeholders and public , who contributed in their growth and success. CSR cannot be termed as charity. It is a way to make social good towards various aspects of  society and environment. CSR also helps company to make brand name towards its customers and also bolsters the goodwill & growth amongst the general public.


Ministry of Corporate Affairs (MCA)  has made Corporate Social Responsibility mandatory for certain class of Companies from 01.04.2014 as per the provisions of Section 135 of Companies Act 2013 along with Companies(Corporate Social Responsibility Rules) 2014 & Schedule VII.

APPLICABILITY OF CSR

Every Company including its holding & subsidiary company having
1) Net worth of Rupees 500 Crores or more, or
2) Turnover of Rupees One Thousand Crores or more, or
3) Net profit of  Rupees 5 crores or more.

* Every Foreign company defined under section 2(42) of the Act having its branch office or project office in India which fulfills the above criteria shall comply with the provision of Section 135 of the Act along with rules.

CSR COMMITTEE

Every class of Company mentioned above has to constitute a Corporate Social Responsibility Committee comprising three directors about of whom One should be independent director.

* In case of Unlisted Public Company or Private Company which is not required to appoint independent directors, can constitute Corporate Social Responsibility Committee without such director.

* In case of Private Company where there are only two directors can constitute Corporate Social Responsibility Committee with only two directors.

* In case of Foreign Company, Corporate Social Responsibility Committee shall be constituted by atleast two persons, one person should be its authorized person resident in India [Section 380(1)(d))] and another person shall be nominated by foreign Company.

DUTIES OF CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

1. Formulate and recommend to the Board, a CSR Policy which shall indicate the activities to be undertaken by the Company as specified in Schedule VII.

2. Recommend the amount of expenditure to be incurred on the activities referred to in clause (i)

3. Monitor the CSR Policy of the company from time to time,

4. Institute a transparent monitoring mechanism for implementation of the CSR projects or programs or activities undertaken by the company.

ROLE OF BOARD OF DIRECTORS

The Board of every Company shall

1) after taking account the recommendation from CSR committee, approve the CSR activities and disclose the contents of the  same in the Board Report and the same shall be displayed on Company's website, if any.

2) ensure that the activities as are included in CSR Policy are undertaken by the Company.

3) ensure that the Company spends atleast two percent of average net profit  made during the three immediately preceding financial years. 

* If company fails to spend such amount, it shall disclose it in the Board Report and specify the reasons for not spending the amount.

CSR ACTIVITIES

1)  The CSR activities shall be undertaken by the company, as per its stated CSR Policy, , excluding activities undertaken in pursuance of its normal course of business.

(2) The Board of a company may decide to undertake its CSR activities approved by the CSR committee, through
a registered trust, society ,its holding , subsidiary, a company established by the company or associate company under section 8 of the Act or otherwise:

* if such trust, society or company is not established by the company or its holding or subsidiary or associate company, it shall have an established track record of three years in undertaking similar programs or projects; 

3) The Company may collaborate with other companies for undertaking projects or programs or CSR activities in such a manner that the CSR committees of respective companies are in a position to report separately on such projects or programs.

4) The CSR projects or programs or activities undertaken in India only  to the amount of CSR expenditure.

5) The CSR projects or programs or activities that benefit only the employees of the company and their families cannot be considered as CSR activities as per the Act.

6) Contribution either directly or indirectly to political parties  cannot be considered as CSR activities.

CSR POLICY

    The CSR Policy of the company shall, , include the following

a)      a list of CSR projects or programs which a company plans to undertake falling under the Schedule VII of the Act,

b)      monitoring process of such projects or programs

c)      that the surplus arising out of the CSR projects or programs or activities shall not
 form part  of the business profit of company.

MISCELLANEOUS POINTS

The Company should give preference to local area and area around it where it operates, for spending the amount earmarked for Corporate Social Responsibility.

The Board's Report of a company on which CSR is applicable shall include an annual report on CSR containing particulars of CSR Activities

 In case of a foreign company, the balance sheet filed under shall contain Annexure  regarding  report on CSR.

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PROCEDURE FOR ALTERATION OF ARTICLES OF ASSOCIATION OF COMPANY

Introduction:-

Articles of Association or AOA along with Memorandum of Association serves as the constitution of the Company. AOA sets out the bye laws and general rules and regulations required for  governing the internal affairs of the Company.

As per Section 2(5)  of Companies Act 2013 "articles" means the articles of association of the Company as originally framed or as altered from time to time or applied in pursuance of any previous company law or of this act.

STEPS FOR ALTERATION OF ARTICLES

STEP 1.

Send 7 days Notice for calling  Board Meeting to all the directors.(Section 173& Secretarial Standard 1)

STEP 2.

 Convene  Board meeting and

a) Pass resolution approving the alteration of Articles,

b) Fix date, time & place for holding Extra Ordinary General Meeting.

STEP 3.

Send  Clear 21 Days Notice to all the directors, shareholders & auditor of the Company.(Section 101 & Secretarial Standard 2),

* Notice shall specify place, date, day and the hour of meeting and shall contain a statement of the business to be transacted at meeting.

STEP 4.

Convene Extra Ordinary General Meeting and Pass Special Resolution (75% consent of shareholders present in person or through Proxy) for approving Alteration of Articles.

STEP 5.

FILE FORM MGT-14 as per Section 117 to Registrar of Companies with in 30 Days of Passing the Resolution along with the following Documents

a) Copy of Resolution

b) Notice of Extraordinary General Meeting along with Explanatory Statement.

c) Copy of Altered Articles of Association.

* NOTE- Alteration having effect of Conversion of Public Company to Private Company, approval of National Company Law Tribunal is required.

Every alteration made in the Articles shall be noted in all copies of Articles.

FORMAT OF BOARD RESOLUTION

“RESOLVED THAT pursuant to the provisions of Section 14 and other applicable provisions, if any, of Companies Act, 2013, (including any statutory modifications or re-enactment thereof, for the time being in force), and the rules framed there under, consent of the Board of Directors of the Company be and is hereby accorded, subject to the approval of Shareholders in General Meeting,the articles of association of the Company be and are hereby altered as under:[ insert the clauses to be altered]

FURTHER RESOLVED THAT  (Name Of Director), Director of the Company be and is hereby authorized, on behalf of the Company, to file  necessary E-form including E-form 14 with the Registrar of Companies and to do all acts, deeds, matters and things as deem necessary and to sign and execute all necessary documents, applications and returns, for giving effect to this resolution."

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E FORM INC-22A (Also Known As ACTIVE FORM) 

MCA in order to find out Shell Companies, has amended the Companies (Incorporation) Rules, 2014 and a New E- Form INC-22A(Also known as ACTIVE - (Active Company Tagging Identities and Verification )has been introduced vide Notification dated 21.02.2019 to ensure that the Company is active with its proper registered Office. 

APPLICABILITY-  Every company incorporated on or before the 31st  December,2017.

EXEMPTION FROM FILING-  Companies which  are:- 

1.Struck off,

2.Under process of winding up,

3.Liquidation,

4.Dissolved companies.

As recorded in the register.

RESTRICTION FROM FILING E-FORM 22A- 

Any company which has not filed its financial statements under section 137 or  annual returns under section 92.

LAST DATE OF FILING INC-22A- 25.04.2019

CONSEQUENCES OF NON FILING-

1. Penalty of INR 10,000.

2.  Status of Company will be"ACTIVE non compliant" until INC- 22A is filed.

3. Company will be debarred from filing:-

(i) SH-07 (Change in Authorized Capital); 

(ii) PAS-03 (Change in Paid-up Capital); 

(iii)DIR- 12 (Changes in Director except cessation); 

(iv) INC-22 (Change in Registered Office); 

(v) INC-28 (Amalgamation, de-merger)

4. Liable for action under section 12(9) of Companies Act 2013.

MANDATORY ATTACHMENT  IN  INC-22A-

1. Photograph of registered office showing external building and 

2. Photograph showing inside office with at least one director, KMP who is authorized to affix his/her digital signature. 

PARTICULARS TO BE FILED IN INC-22A

1. Corporate  Identity Number (CIN) of  company.

2. Name, Address,Latitude and Longitude of the registered office of the Company and Email Id of Company; (Email Id to be verified through One Time Password (OTP)

3. Number of Directors including details of  Names of Director, DIN( All DINs should be in active status)

4. Details of Statutory Auditor, Cost Auditor, Managing Director or Whole Time Director or Manager or  Chief Executive Officer (if any).

5. Detail of Company Secretary, if any.

6. SRN of Form AOC-4,AOC-4 XBRL, MGT-7 for financial year 2017-18.

VERIFICATION OF INC-22A- 

1. In case of One Person Company- One Directors

2. In all other cases-  One director or One KMP or Two directors

PROFESSIONAL CERTIFICATION-  BY PRACTICING CS/CA/CWA

MCA Notification dated 21.02.2019- 

http://www.mca.gov.in/Ministry/pdf/CompaniesIncorporationAmendmentRules_21022019.pdf

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