Amendment Rules, Circulars Notifications and …

1 Amendment RAmendment RAmendment RAmendment RAmendment rules , Circularsules, Circularsules, Circularsules, Circularsules, CircularsNotifications and OrdersNotifications and OrdersNotifications and OrdersNotifications and OrdersNotifications and Ordersunder Companies Aunder Companies Aunder Companies Aunder Companies Aunder Companies Act, 2013ct, 2013ct, 2013ct, 2013ct, 2013A CompendiumA CompendiumA CompendiumA CompendiumA compendium [updated upto 15th May, 2015]MAMAMAMAMAY 2015Y 2015Y 2015Y 2015Y 2015 PRICE : ` 300/- (Excluding Postage) THE INSTITUTE OF COMPTHE INSTITUTE OF COMPTHE INSTITUTE OF COMPTHE INSTITUTE OF COMPTHE INSTITUTE OF COMPANY SECRETANY SECRETANY SECRETANY SECRETANY SECRETARIES OF INDIAARIES OF INDIAARIES OF INDIAARIES OF INDIAARIES OF INDIAAll rights reserved.

2 No part of this publication may be translated or copied in any form or by anymeans without the prior written permission of The Institute of Company Secretaries of due care and diligence have been taken in the publication of this compendium theInstitute shall not be responsible for any loss or damage, resulting from any action taken on thebasis of the contents of this compendium . Any one wishing to act on the basis of the materialcontained herein should do so after cross checking with the original : 978-93-82207-20-7 Published by :THE INSTITUTE OF COMPANY SECRETARIES OF INDIAICSI House, 22, Institutional Area, Lodi Road, New Delhi - 110 003 Phones : 4534 1000, 4150 4444 Fax : 24626727 Website : E-mail : at :Samrat Offset Works/500/May 2015 PREFACE TO THE REVISED EDITIONLaws framed are reflection of societal developments, with varied degrees ofinterpretations.

3 There always remains scope for the regulators to ensure that thestakeholder expectations are duly incorporated in the Act, 2013 was enacted on 29th August, 2013 replacing the six decadeold Companies Act, 1956. Recognizing the various operational difficulties under thisAct, the Ministry has so far issued 29 Amendment rules , 54 Circulars , 24 Notifications ,10 orders, which signals intent of the regulators to ensure effective implementationof this mammoth piece of legislation in accordance with stakeholders needs compendium is an effort to consolidate the Amendment rules , Circulars , Notifications and orders issued under Companies Act, 2013 to enhance the readabilityand deeper understanding of the subject.

4 The contents of the compendium havebeen developed in a user friendly manner. It also contains in a nutshell amendmentrules, Circulars , Notifications and orders in a tabular form providing an overview tothe readers. Every chapter enlists the sections covered thereunder, the topics covered,the rules framed thereunder, the notification and effective date of said rules , theamendment rules & Circulars issued by the Ministry under the gist of Amendment rules , Circulars , Notifications and orders is also given in eachchapter which is followed by complete text of the said Amendment rules , Circulars , Notifications and am confident that the members and readers will find this compendium commend the dedicated efforts put in by team ICSI led by CS Alka Kapoor.

5 JointSecretary and comprising CS Lakshmi Arun, CS Banu Dandona, Deputy Directors,CS Rakesh Kumar, CS Disha Kant, Assistant Education Officers, CS Naveen Kumar,Assistant under the overall guidance of CS Sutanu Sinha, Chief Executive & OfficiatingSecretary, in bringing out this any publication, there is always scope for further improvement. I would personallybe grateful to users and readers for offering their suggestions/comments for DelhiCS Atul H Mehta29th May, 2015 President, ICSI(iii)(iv)PREFACE TO FIRST EDITIONTo master or thrive in dynamic world, we need to embrace sustainable growth anddevelopment through continuous learning, and constant improvement in the areaswhere we practise, learn and professionalize in the emerging areas, which lead todiversification of profession at the individual and the institutional implementation phase of Companies Act, 2013 and the rules made thereunder onoperational aspects such as annual document filing, shareholders meeting, boardmeeting, committee meeting, disclosures, transfer of securities.

6 Maintenance of records,issue of capital, incorporation/conversion of companies, buy-back of shares etc.; issuesthat involves approval of shareholders/directors; technology enabled provisions suchas e-voting, video conferencing, e-filing etc; led to initial teething difficulties, and theMinistry of Corporate Affairs clarified the concerns of the stakeholders in its first andsecond phase of notification of sections under Companies Act, 2013. Keeping with its capacity building initiatives, the Institute has decided to bring out acompendium of Amendment rules , various Notifications , Circulars and orders issued bythe Ministry of Corporate Affairs, in a user friendly manner, which have been classifiedChapter-wise with text highlights and question answer along with consolidated am confident that this compendium will facilitate the members and readers inunderstanding the nuances of clarifications issued by the commend the dedicated efforts put in by Ms.

7 Lakshmi Arun, Deputy Director and Pal, Assistant Education Officer in the Institute for developing chapter-wise overview of various clarifications, comparative statements in nutshell, under theguidance of Ms. Sonia Baijal, Director, would personally be grateful to the users and readers for offering their views andsuggestions for further DelhiCS R. Sridharan15th August, 2014 President, ICSI(v)(vi)C O N T E N T SIntroduction1 Chapter I Preliminary29 Chapter II Incorporation of company and matters incidental thereto40 Chapter III Prospectus and Allotment of Securities56 Chapter IV Share Capital and Debentures60 Chapter V Acceptance of Deposits by Companies76 Chapter VI Registration of Charges84 Chapter VII Management and Administration85 Chapter VIII Declaration and Payment of Dividend104 Chapter IX Accounts of Companies108 Chapter X Audit and Auditors130 Chapter XI Appointment and Qualification of Directors140 Chapter XII Meetings of Board and

8 Its Powers154 Chapter XIII Appointment and Remuneration of Managerial Personnel174 Chapter XIV Inspection, Inquiry and Investigation178 Chapter XV Compromises, Arrangements and Amalgamations179 Chapter XVI Prevention of Oppression and Mismanagement180 Chapter XVII Registered Valuers181 Chapter XVIII Removal of names of companies from the Register of Companies182 Chapter XIX Revival and Rehabilitation of Sick Companies183 Chapter XX Winding up184 Chapter XXI Companies Authorised to register under this Act185 Chapter XXII Companies Incorporated outside India186(vii)

9 Chapter XXIII Government Companies187 Chapter XXIV Registration Offices and Fees188 Chapter XXV Companies to furnish information or Statistics204 Chapter XXVI Nidhis205 Chapter XXVII National Company Law Tribunal and Appellate Tribunal206 Chapter XXVIII Special Courts207 Others208 SCHEDULE II248 SCHEDULE V252 SCHEDULE VII254(viii)1 IntroductionGST - Move Towards Consumption based Tax An Introductory StudyINTRODUCTIONThe Companies Act, 2013 replaced six decade old Companies Act, 1956, bringing the corporatelegislation in India to be par with modern legislations elsewhere in the globe.

10 The Companies Act,2013 is divided into 29 chapters, 470 sections and 7 schedules. The new law incorporates severalprovisions relating to investor protection, better auditing tools, fraud control, single windowclearance for mergers, e-governance, secretarial standards, board duties, board performanceevaluation, enhanced role of independent directors, institutionalization of corporate socialresponsibility, sections/ rules under Companies Act 2013 is being notified in phases. Section 1 was notifiedon August 29, 2013, 98 sections on September 12, 2013 and 183 sections on April 01, 2014.