Monday, 3 October 2016

Effect of Companies (Incorporation) Fourth Amendment Rules, 2016


The Central Government issued a notification on 1th October, 2016 to amend the Companies (Incorporation) Rules, 2014 thereby issuing new rules to be called Companies (Incorporation)Fourth Amendment Rules, 2016. These rules shall come into force on the date of their publication in the official gazette.
The changes appended in the amendment are as follows:

1.  Conversion of public company into private company and vice-versa.
 Rule 33(2) which has been amended says that:
“subject to the provision of sub-rule (1), for effecting the conversion of a public company into a private company, a copy of order of the Tribunal approving the alteration, shalt be filed with the Registrar in Form No INC-27 with fee together with the printed copy of altered articles within fifteen days from the date of receipt of the order from the Tribunal"

Remarks: The word “competent authority” which was termed as Central Government has been replaced with the word “Tribunal”.

2. Rule 38 [Simplified Proforma for Incorporating Co. Electronically (SPICE)] has been inserted after Rule 37 which will be effective from 2nd of October, 2016.:

New simplified integrated process of incorporation has been incorporated with the introduction of new forms namely Form INC-32 alongwith Form INC-33(E-MOA) and Form INC-34(E-AOA). The rules(Rule: 36) for incorporation as prescribed will remain intact. The forms are available on the MCA portal for the ready reference and use.
With the effect of this form, the old forms INC-29, INC-30 and INC-31 shall be substituted respectively.

Remarks: 
·         There will be ease in incorporation as we can file INC-1(i.e. for name approval) before filing the integrated form which was a real disadvantage in the earlier form (INC-29).
·         E-MOA and E-AOA facility has been introduced whereby one can attach the DSC of the subscribers and witness hence physical signature and photograph is not required.
·         There is a facility of adding only 7 subscribers, and if the subscribers are more than 7, then the old process has to be followed.

3. Rule 39 has been after the Rule 38 as inserted with this notification will be effective from 1st November, 2016.

Rule 39: Conversion of co. limited by guarantee in to co. limited by Shares

Terms and Conditions for conversion of company Limited by guarantee in to company limited by shares
1.       A company other than a company registered under Section 25 of the Companies Act, 1956 or Section 8 of the Companies Act, 2013 may convert itself into a company limited by shares.
2.       The company seeking conversion shall have a share capital equivalent to the guarantee amount.
3.       A special resolution is passed by its members authorising such a conversion and omitted a guarantee clause in the Memorandum of association and altering the article of association to provide for the articles as are applicable for a company limited by shares
4.       A copy of the special resolution shall be filed with the Registrar of Companies in Form no. MGT-14 within thirty days from the date of passing of the same along with fee as prescribed in the Companies (Registration Offices and Fees) Rules, 2014.
5.        An application in Form No. INC-27 shall be filed with the Registrar of Companies within thirty days from date of the passing of the special resolution enclosing the altered Memorandum of Association and altered Articles of Association and a list of members with the number of shares held aggregating to a minimum paid up capital which is equivalent to the amount of guarantee hither to provided by its members.
6.       The Registrar of Companies shall take a decision on the application filed under these rules within thirty days from the date of receipt of application complete in all respects and upon approval of Form No. 1NC-27, the company shall be issued with a certificate of incorporation in Form No. INC-11B.

4.    After the Form No. INC-11A, the following form INC-11B shall be inserted.
5.    The form INC-27 is substituted with some changes.

  
               



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