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.

Incorporation of Section 8 Companies: “No Requirement for INC 12 Filling”

Companies(Incorporation) Sixth Amendment Rules, 2019 dated 7th June, 2019, With a view to simplify the process for incorporating Section 8 Companies, requirement of prior filing of INC-12 for new section-8 companies is being dispensed.

So the Process of Incorporation of Section 8 Companies is now simple as the process of incorporation of other Companies.

Old Process of Incorporation of Section 8 Companies:-

1.      Reservation of Name through RUN form

2.      Obtain License for Section 8, Through Form INC-12

3.      Filling and Approval of Form Spice

Current Process of Incorporation of Section 8 Companies after Amendments:

1.      Section 8 Companies can be incorporated by either reserving names through Run and filing SPICe thereafter or by directly filing SPICe.

2.      License Number for a section 8 company shall henceforth be allotted at the time of incorporation itself.

What about form already uploaded for approval of License through E-Form INC-12?

In view of the above, all pending INC-12 SRNs for new Companies pending at respective Registrar of Companies would be marked as ‘Rejected’ on 15th August 2019. Such applicants may thereafter directly file SPICe for obtaining License Number and for incorporation of Section 8 Companies.

What about who already obtain the License number but SPICEs form are yet to be uploaded?

Who have already obtained License Numbers and are yet to file SPICe form for incorporating Sec 8 companies may do so at their convenience but may please note that the forms shall be processed only after a certain time lag to allow for work flow changes to take effect.

MCA Charge filing fees new structure wef 1 August 2019

1. Within 30 days - Normal Fees
2. Delay Up to 30 days  - 6 times normal fees
3. Delay More than 30 days and up to 90 days - 6 times normal fees plus ad valorem fees 0.05% of amt secured by charge subject to maximum of Rs.5 lacs.

Note: 120 days and above charge will not be taken on record by MCA

For example  Considering loan / charge amt of Rs.1 Cr following is ROC fees calculation:
1. Within 30 days - Maximum Fees Rs.600/-
2. Delay Up to 30 days  - Total Rs.4200/- (Rs.600/- + Rs.3600/-)
3. Delay More than 30 days and up to 90 days - Rs.9200/- {Rs.4200/- + Rs.5000/- (i.e. 0.05% of Rs.1 Cr)}

On Rs.100 Cr charge amount - Delay More than 30 days and upto 90 days-  Roc fees Rs.4200/- + advalorem fees Rs.5 Lac=Rs.504200/-

Summary of changes made regarding KYC of DIN vide MCA notification dated July 25, 2019:

1.      KYC of DIN on annual basis by 30th September is mandatory;

2.      KYC of DIN allotted during a financial year can be made only by way of filing of DIR 3 KYC by 30th September of next financial year;

3.      KYC of DIN in respect of which DIR-3 KYC has been made in previous years can be made by filing following forms by 30th September of respective financial year:

a.      DIR-3 KYC WEB - if there is no update in information;

b.      DIR-3 KYC – if there is change in information.

4.      Filing of above forms can be made after 30th September with additional fees of Rs. 5000/-;

5.      It appears any updation in mobile/email can be made only on annual basis through form DIR 3 KYC and not through DIR-3 KYC WEB.

MCA Notified Changes with Effect from 10.05.2019 "Strike off of Companies"

MAJOR CHANGES IN STRIKE OFF OF COMPANIES BY MCA WHICH IS EFFECTIVE FROM 10.05.2019

1. MCA fees doubled from now i.e from 5000₹ to 10000₹.

2. All necessary compliance have to be done before filing STK-2.

3. Before filing STK-2, annual returns and financial statements needed to be filed upto the end of financial year in which company cease to carry on its business.

4. If company wants to file STK-2 after the action been initiated by ROC under section 248(1) then company needs to file all over due returns in AOC-4 and MGT-7.

5. Statement of account needed to be given in stk-8 format only.

6. If notice issued under STK-7 by ROC, then company cannot file STK-2.

7. In STK-4 one point to be added as company has fulfilled all pending compliance, if any ( only applicable in case an application under section 248(2) has been filed after the initiation of action under 248(1).)

FAQ on various Question on DPT -3 Return

FAQ on various Question on DPT -3

Question: - Whether loan received from the employee it liable to report in DPT-3?

Professional Opinion:-

Yes, it is liable to report under DPT-3, because it is also a loan from employee.

Question: - Whether advance received from the customer for provision of services or supplies of Goods it liable to report in DPT-3?

Professional Opinion:-

Yes, it is liable to report under DPT-3. Rule 2 (1) (C) of the Deposit Rules not covered it into the meaning of Deposit. But for the Purpose of DPT-3, any amount received in advance in the course of or the purpose of the company business, for the supply of business or provision of the service or as a security deposit for the performance of the contract for supply of goods or provisions of services is liable to report.

Question: - Whether NBFC is liable to report in DPT-3?

Professional Opinion:-

Yes, NBFC are liable to report under DPT-3, because only Government Companies is exempted.

Question: - My Client is taken the loan before 01.04.2014 and repaid the same before 31.03.2019. Whether such loan is liable to report?

Professional Opinion:-

No, it is clearly mentioned in the notification that only all outstanding receipts of money or loan as on 31.03.2019 is liable to report in DPT-3. So your dues is clear before 31.03.2019, hence no dues as on reporting date, so you are not liable to report such loan.

Question: - My Client is taken the loan before 01.04.2014 and same is outstanding as on 31.03.2019. Whether such loan is liable to report?

Professional Opinion:-

Yes, it is covered under outstanding receipts of the money or loan hence liable to report.

Question: - If a company does not accept any loan or does not having any outstanding loan, then also company need to comply with the provisions of this rule?

 Professional Opinion:-

If company does not accept loan or does not having any outstanding loan, there is no need to comply with the provisions of this rule.

Question: - Whether information about secured loan, unsecured loan, ECB, loans between holding and subsidiary is required to be furnished?

Professional Opinion:-

There is no specific exemption in the said notification regarding the above referred loan, so, it can be concluded that information about each and every outstanding loan as on 31.03.2019 is required to be furnished.

Question: - What does ‘Particulars not considered as deposit’ means?

Professional Opinion:-

Loan exempted under deposit rules and section 73 shall be considered as particular of non-considered as deposit. For example Loan from companies, Directors, Banks, Financial Institutions, Members etc. Thus every loan taken by company is covered in Rule 16.

Question: - If company received loan from Holding Company, Subsidiary Company or Associate Company. Whether company need to file DPT-3?

Professional Opinion:-

As per rule 16 A DPT-3 is required to file for each and every loan received by the company. Therefore, Company required filing DPT-3 even for loan from Holding, Subsidiary or Associate Company.

Question: - If company does not accept loan or does not having any outstanding loan. Whether need to file DPT-3?

Professional Opinion:-

If company does not accept loan or does not having any outstanding loan, there is no need to comply with the provisions of this rule.

Summary on DPT 3 Return

Quick References on DPT 3

Ø  On 22^nd of January 2019, the Ministry of Corporate Affairs come up with a new amendment in the companies (Acceptance of Deposit) Rules 2019

Ø  Every company other than the government Company shall file a onetime return of outstanding receipts of Money/ Loan taken by the company but not considered as deposits.

Ø  This E Form must be filled within 60 days from 31^st day of March 2019. Hence Due date of this E Form is 29^th day of June 2019.

Ø  Auditor Certificate is one of the mandatory attachments of Form DPT-3, as per the amendment Act but in E Form Released by the MCA it is not covered under mandatory part.

Ø  Fees shall be payable as per the Companies (Registration Offices and Fees) Rules, 2014 and it shall vary between rupees two hundred to rupees six hundred depending upon paid up capital of the Company.

Which Type of Loan Covered under DPT 3?

Ø  DPT 3 is required for both Secured as well as for Unsecured loan

Ø  All the outstanding receipts of Money/ Loan taken from period 01^st day of April 2014 to 31^st day of March 2019 will be covered under Form DPT-3.

Ø  In a case where a company has already repaid loans before or on 31^st day of March 2019, then such a loan is no longer outstanding receipts of Money/ Loan, hence no required to file this E Form DPT-3.

Ø  Even if Loan/ Money has been Received before 01.04.2014 and Still outstanding as on 31.03.2019, then also required to file this E Form DPT 3. But if such loan repaid before or on 31.03.2019, then company not required filing E Form DPT 3.

Some Particulars of the transaction not considered as Deposit, required to give more attention.

Ø  Any amount from government or guaranteed by the Government, foreign government, Foreign bank.

Ø  Any amount received from the bank or facilities from the bank, PFI.

Ø  Any Amount Received by the Company from another Company or inter corporate deposit.

Ø  Any Amount received from a person who, at the time of the receipts of the amount, was a director of the company or a relative of the Director of the private limited Company.

Ø  Any amount received from the employee of the company.

Ø  Unsecured loans from promoters.

Ø  Any amount received in advance in the course of or the purpose of the company business, for the supply of business or provision of the service or as a security deposit for the performance of the contract for supply of goods or provisions of services.

Ø  Any other amount which is not considered as Deposit under Specified Rule.

Ease of Doing Business

Ø  Professional Digital Signature is not required to file this E Form DPT 3.

Ø  If we see the format of DPT-3 as given in the said notification, then we can opine that for now, onetime particulars of outstanding money or loan not considered as deposits is required to be furnished in Form DPT-3. Maybe however, the Companies in future ought to require furnishing information about loans/money not considered deposits along with the loans/money considered as deposits as well.

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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 does 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.