Important Updated in relation Annual Filing & Extension of Companies

The Ministry of Corporate Affairs (MCA) on Saturday vide General Circular no. 22/2021 dated: 29/12/2021, gave relaxation on levy of additional fees of e – forms AOC-4, AOC-4 (CFS), AOC-4 XBRL, AOC-4 NON-XBRL AND MGT-7/MGT-7A for the financial year ending on 30.03.2021, under Companies Act, 2013 till 15/02/2021 for the filing of AOC-4, AOC-4 (CFS), AOC-4 XBRL, AOC-4 NON-XBRL and up to 28/02/2021 for the filing of MGT-7/MGT-7A in respect of the Financial Year ended on 31/03/2021 respectively.

Aforesaid Extension is only given for the Relaxation of Additional fees Levied on Delay Filling of E Form AOC-44 and MGT-7/7A (as Applicable). But for those who required to file E Form ADT-1 For Appointment of Auditor on AGM as been required to file the ADT-1 with such Additional fees as Charged under the Companies Act 2013.

Point to be Remember for Aforesaid Extension:-

1. There is No extension is given for Form LLP-8 for Financial Year 2020-21.
2. This Extension if only Applicable to the Annual Filling for Financial Year 2020-21.
3. E Form AOC-4 shall be filled up to 15.02.2021 without any Additional fees For FY 2020-21.
4. E Form MGT7/ 7A shall be filled up to 28.02.2021 without any additional Fees for FY 2020-21.

Applicability of E Form MGT 7A:-

E Form MGT 7A is required to file by the Small Companies and One Personal Company. Such form can be filled by the Company without Attestation of Companies Secretaries in practice.

Here the term Small Companies Means:-

According to Section 2(85) of Company Act, 2013, Small Company means the company which satisfies the following two conditions: –

• paid up share capital of not more than 50 lakhs or such higher amount as may be prescribed which shall not be more than 10 crores; and
• Annual turnover as per profit and loss account of immediately preceding financial year not more than 2 crores or such higher amount as may be prescribed which shall not be more than 100

But This Clause is not Applicable to the

1. Section 8 Companies
2. Public Limited Companies
3. Holding and Subsidiaries Companies
4. Companies Formed under the Special Act.

Set Up a Limited Liability Company (LLC) in Dubai

A procedural way to incorporate a business in Dubai is through a Limited Liability Company or LLC.  

A Limited Liability Company in Dubai is the most common form of business. It can be formed by a minimum of 2 and a maximum of 50 shareholders, whose liability is limited to their shares in the business capital. Most companies with foreign partners opt for an LLC, because of the fact that this is the only option that gives maximum legal ownership, i.e. 49%, to an penetrate and expand for a local business. 

It is mandatory to have a UAE National as a Partner in the LLC (with 51% shareholding), the prospective investor has the option to choose the one UAE national (as a sponsor) as a partner in the company. LLC is flexible and differential profit-sharing arrangements are also possible. This provides the foreign investor with a great edge as 51% of legal equity is with a local partner.

The Department of Economic Development is the regulatory authority for LLC set-up in Dubai.

Advantage of a Limited Liability Company (LLC) in Dubai

Dubai LLC offers unrivalled access to the wider UAE economy. No specific minimum capital needed. Investors can manage the business without any day-to-day interference from the local partner. Convenient to open corporate bank accounts along with easy availability of credit facilities.

This business entity is ideal for a business looking to offer consulting services with an Emirati national as a reliable joint venture partner. The Dubai LLC formation cost depends on the type of activity you choose for your business.

The corporate income tax rate in the UAE is 0%. In addition, the Emirates allow full repatriation of capital and profits.

Other Factors

For setting up a company in the UAE, a local sponsor (who must be a UAE national) to act as your company agent. In a free zone, however, there is no such prerequisite. The importance of the local partner in Dubai can be measured by the fact that the government has mandated by law to have a sponsor for foreigners for doing any activity from entering into the country to end the business in UAE. Sponsor is required for any new business in the UAE. In case of professional services for business there is a need of professional Local Agent to handle all of Governments Services.

These are the steps and Checklist for Incorporation as under –

1. Decide on a Trade Name: - Choose a suitable name that is unique as well as relatable to your business.

2. Choose a Location: - Choose a location that suits you according to the type of your business. Company operations have to be carried out through a physical/virtual office or warehouse.

3. Get a Local Sponsor

4. Get Required Documents: 

5. Obtain License and Pay Fees

The Documents/Checklists required to be submitted in  Department of Economic Development (DED) and other authorities according to the type of LLC to be formed in Dubai are as follows :-

1-Duly filled registration application form with Passport copies of all shareholders and managers of the LLC

2-Passport copy of the local sponsor and NOC from sponsor (if manager or partner has residence visa in UAE)

3-Memorandum of Association (duly attested from a public notary) Registration of trade name and initial approval from DED.

4-Bank reference letter of each shareholder Location plan and tenancy contract attested by Dubai Municipality’s Planning Department and Civil Defense Department

All the documents must be attested and notarized from the applicant’s home country and UAE consulate. The notarization procedure takes sufficient time and it should be done soon after taking a decision about business setup in Dubai.

Disclaimer :

The entire contents of this article are solely for information purpose and have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation by the Author. The Author of this Article do not constitute any sort of professional advice or a formal recommendation. The author has undertaken utmost care to disseminate the true and correct view and doesn’t accept liability for any errors or omissions. You are kindly requested to verify and confirm the updates from the genuine sources before acting on any of the information’s provided hereinabove. The Author shall not be responsible for any loss or damage in any circumstances whatsoever.

Amendments in Schedule III from 1st day of April, 2021

 As per the amendments many new disclosure has been mandatory as detailed below:

a. Disclosure of Shareholding of Promoters

b. Trade Payables ageing schedule with age 1 year, 1-2 year, 2-3 year & More than 3 years

c. Reconciliation of the gross and net carrying amounts of each class of assets

d. Trade Receivables ageing schedule with age 1 year, 1-2 year, 2-3 year & More than 3 years

e. Detailed disclosure regarding title deeds of Immovable Property not held in name of the Company.

f. Disclosure regarding revaluation & CWIP ageing.

g. Loans or Advances granted to promoters, directors, KMPs and the related parties

h. Details of Benami Property held

i. Reconciliation and reasons of material discrepancies, in quarterly statements submitted to bank and books of accounts.

j. Disclosure where a company is a declared wilful defaulter by any bank or financial Institution

k. Relationship with Struck off Companies

l. Pending registration of charges or satisfaction with Registrar of Companies 

m. Compliance with number of layers of companies

n. Disclosure of 11 Ratios 

o. Compliance with approved Scheme(s) of Arrangements

p. Utilisation of Borrowed funds and share premium

q. Details of transaction not recorded in the books that has been surrendered or disclosed as income in the tax assessments

r. Disclosure regarding Corporate Social Responsibility

s. Details of Crypto Currency or Virtual Currency

MCA Form PAS-6 and its Applicability

Form PAS-6 (Reconciliation of Share Capital Audit Report on half yearly basis) and It’s Applicability

Provision:

Filing of Form PAS-6 under Rule 9A(8) of the Companies (Prospectus and Allotment of Securities) Rules, 2014

Objective of the Form PAS-6:

Reconciliation of Share capital Audit Report on half yearly basis By Companies.

Applicability:-

This Rule is Applicable on On Unlisted Public Companies.

Reporting Period Commencement:

They shall come into force with effect from 30th September, 2019. First Reporting Period is 30th September 2019.

Company Responsibility:

1. Every unlisted public company governed by this rule shall submit Form PAS-6 to the Registrar with such fee as provided in Companies (Registration Offices and Fees) Rules, 2014 within sixty days from the conclusion of each half year duly.
2. The company shall immediately bring to the notice of the depositories any difference observed in its issued capital and the capital held in dematerialised form.”. 

Special Measures under Companies Act, 2013 (CA-2013) and Limited Liability Partnership Act, 2008 in view of COVID-19 outbreak

In order to support and enable Companies and Limited Liability Partnerships in India to focus on taking necessary measures to address the COVID-19 threat, including the economic disruptions caused by it, the following measures have been implemented by the Ministry of Corporate Affairs to reduce their compliance burden and other risks: -

1. No additional fees shall be charged for late filing during a moratorium period from 01st April to 30th September 2020, in respect of any document, return, statement etc., required to be filed in the MCA-21 Registry, irrespective of its due date, which will not only reduce the compliance burden, including financial burden of companies/ LLPs at large, but also enable long-standing non compliant companies/ LLPs to make a'fresh start'. The Circulars specifying detailed requirements in this regard are being issued separately.
2. The mandatory requirement of holding meetings of the Board of the companies within the intervals provided in section 173 of the Companies Act, 2013 (CA-13) (120 days) stands extended by a period of 60 days till next two quarters i.e., till 30th September. Accordingly, as a one time relaxation the gap between two consecutive meetings of the Board may extend to 180 days till the next two quarters, instead of 120 days as required in the CA-13.
3. The Companies (Auditor's Report) Order,2020 shall be made applicable from the financial year 2020-2021 instead of being applicable from the financial year 2019-2020 notified earlier. This will significantly ease the burden on companies & their auditors for the financial Year 2019-20. A Separate notification has been issued for this purpose.
4. As per Para Vll (1) of Schedule lV to the CA-13, independent Directors (lDs) are required to hold at least one meeting without the attendance of Non independent directors and members of management. For the financial year 2019-20, if the lDs of a company have not been able to hold such a meeting, the same shall not be viewed as a violation. The lDs, however, may share their views among themselves through telephone or e-mail or any other mode of communication, if they deem it to be necessary. 
5. Requirement under section 73(2)(c) of CA-13 to create the deposit repayment reserve of 20% of deposits maturing during the financial year 2020-21 before 30th April 2020 shall be allowed to be complied with till 30th June 2020.
6. Requirement under rule 18 of the Companies (Share Capital & Debentures) Rules, 2014 to invest or deposit at least 15% of amount of debentures maturing in specified methods of investments or deposits before 30th April 2020, may be complied with till 30th June 2020.
7. Newly incorporated companies are required to file a declaration for Commencement of Business within '180 days of incorporation under section 10A of the CA-13. An additional Period of 180 more days is allowed for this compliance.
8. Non-compliance of minimum residency in India for a period of at least 182 days by at least one director of every company, under Section 149 of the CA-1 3 shall not be treated as a non-compliance for the financial year 2019-20.

These aforesaid relation provide a relief to the company to be face major non compliance due to COVID-19.

Deployment of SPICEe+

Deployment of SPICEe+

Message1

(i) Stakeholders may please note that as part of Government of India’s Ease of Doing Business(EODB) initiatives, the Ministry of Corporate Affairs would be shortly notifying & deploying a new Web Form christened ‘SPICe+’  (pronounced ‘SPICe Plus’) replacing the existing SPICe form.

(ii) SPICe+ would be an integrated Web form offering multiple services viz. name reservation, incorporation, DIN allotment, mandatory issue of PAN, TAN, EPFO, ESIC, Profession Tax (Maharashtra) and Opening of Bank Account. It will also facilitate allotment of GSTIN wherever so applied for by the Stakeholders. After deployment of SPICe+ web form, RUN shall be applicable only for change of name of existing companies.

(iii) Upon notification & deployment, all new name reservations for new companies as well as new incorporations shall be applied through SPICe+ only

(iv) However, incorporation of companies for names reserved through the existing RUN service shall continue to be filed in the existing SPICe eform along with related linked forms as applicable and if marked under resubmission shall be resubmitted in SPICe eform.

(v) Resubmission of SPICe forms submitted prior to date of deployment of SPICe+ web form shall also be filed in the existing SPICe eform and related linked forms as applicable.

*Message2*
Due to the proposed changes to the RUN web service (for companies), RESUBMISSION OPTION for name reservation SHALL NOT BE AVAILABLE from 1st Feb 2020 ONWARDS for approximately 15 days. Hence, after 01 Feb 2020, stakeholders are advised to EITHER AWAIT DEPLOYMENT OF SPICe+ AND THEN APPLY FOR NAMES through SPICe+ web form or perform due diligence while submitting any application in existing RUN    web service for name reservation. RUN applications (for companies) filed w.e.f    1st February 2020 onwards shall either be approved or rejected based on checks performed by CRC officers. Stakeholders may kindly note and plan accordingly.

Companies (Incorporation) Eighth Amendment Rules, 2019

MCA has recently issued Companies (Incorporation) Eighth Amendment Rules, 2019 on 16 th October, 2019.

As per Notification mentioned above there is amendment in Rule 25A i.e. Active Company Tagging Identities and Verification (ACTIVE).

1. Whether DIR-12 can be file for cessation of Director?
Yes even status of Company is inactive. Company is allowed to file DIR-12 for cessation of Director.

2. Due to any reason all the directors are disqualified u/s 164. Whether Company can get appointment of one director from backend.

Yes as per latest amendment, even if all the directors are disqualified and status of company is inactive. ROC can appoint one director from backend.

3. In question No.2. Whether DIR-12 can be file for appointment of Second Director?
Yes, once one directors appointed by ROC from backend. DIR-12 can be file for appointment of another director even status of company is inactive.

4. Where DIN of all or any of the directors are deactivated, whether DIR-12 can be file by Company for appointment of new Director.

Yes as per latest amendment, even DIN of all or any of Directors are deactivated still Company can file DIR-12 with Roc for appointment of new Director.

5. Due to any reason any directors are disqualified u/s 164 and minimum no. of directors reduces below minimum limit. Whether Company can file DIR-12 for appointment of new Director.

Yes as per latest amendment, Company can file e-form DIR-12 for appointment of new director in above condition even status of Company is inactive.