Key highlights to Company Act amendment rules 2018

Key highlights to Company Act amendment rules 2018  

Company Act amendment rules 2018 : Some of the major amendments to various rules under Companies Act, 2013 that have been notified by MCA recently are given below: 1 . Amendment relating to meeting of board and its powers: The Government has amended the Companies (Meetings of the Board and its Powers) Rules, 2014. A new provision has been inserted to Rule 4 of the said rules providing that any other director may participate through video conferencing or other audio visual means if there is quorum in a meeting through physical presence of directors. Click here to download the amendment notification. 2 . No more ratification of appointment of Auditor in AGM: The Government has amended the Companies (Audit and Auditors) Rules, 2014. Amendment has been made to rule 3 whereby proviso to sub-rule 7 of Rule 3 and explanation there under have been omitted. Which means that the requirement of ratification of appointment of Auditor in every annual general meeting (AGM) till the conclusion of sixth AGM has been removed. Further Rule 9 of the said rules has been omitted. Rule 9 read that :  In case of criminal liability of any audit firm, the liability other than fine, shall devolve only on the concerned partner or partners, who acted in a fraudulent manner or abetted or, as the case may be, colluded in any fraud. This means that in case whole audit firm will face penalty if partner or partners of that concerned firm has acted in fraudulent manner. This omission has made the penalty provisions more stringent for firm doing Audit. Also rule 10A and Rule 14 have also been amended. Click here to download the amendment notification. 3 . 15 days time for re-submission in case of reservation of name through RUN: The Central Government has amended the Companies (Registration Office and Fees) Rules, 2014. A new provision has been inserted under to Rule 10(3) providing that - Registrar shall allow fifteen days' time for re-submission in case of reservation of name through web service -RUN for rectification of defects if any. Earlier re-submission was not allowed in case of re-submission of application through RUN. Click here to download the amendment notification. 4 . Additional fee payable on delayed annual filing: Further amendment has been made in Annexure I of the Companies (Registration Office and Fees) Rules, 2014 prescribing additional fee of Rs. 100 per day effective from July 1, 2018 for delayed in filing of annual return and financial statements. The additional fee shall also be applicable to revised financial statement or board report as well as Secretarial audit report.

MCA notifies Additional fee of Rs.100 per day for delay in filing ROC Forms w.e.f 1st July 2018

5 . Government changes norms for appointment of Independent Directors: The Government has amended Companies (Appointment and Qualification of Directors) Rules, 2014 whereby amendment has been made to Rule 5. The revised norm provides that in case of appointment of Independent Director, none of the relatives of such independent director should be indebted to the company, its holding subsidiary or associate Company or their promoters, or directors; or has given a guarantee or provided any security in connection with indebtness of any third person to its holding, subsidiary or associate company or their promoter or directors for an amount of Rs. 50 Lakhs at any time during the two immediately preceding financial years or during current financial year. Click here to download the amendment notification. 6 . Amendment relating to prospectus and allotment of securities: The Government has amended the Companies (Prospectus and Allotment of Securities) Rules, 2014. The amendment prescribes omission of : Rule 4 - Reports to be set out in the Prospectus Rule 5- Other matters and reports to be stated in the prospectus and Rule 6- Period for which information to be provided in certain cases. Click here to download the amendment notification. The amendments are effective from May 07, 2018.