18 March 2018
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  • Govt to introduce new service for company name reservation
    Jan 27, 2018
    Companies having authorised capital of up to Rs 10 lakh can soon be incorporated without paying any fee, according to the government.The move is part of process re-engineering initiatives aimed at making the "incorporation process speedy, smooth, simple and reducing the number of procedures involved for starting a business," an official release said today.As part of the initiatives, the corporate affairs ministry would be introducing "RUN (Reserve Unique Name)" web service for reservation of company names.The service would be launched tomorrow.
  • Non-compliance to be 'very costly' for companies: Government
    Dec 27, 2017
    Sending out a strong message to corporates, the government has said non-compliance will be "very costly" and strong deterrents will be there to curb the dangerous adventure of using companies for wrongful purposes. Continuing the clampdown on illicit fund flows, the Ministry of Corporate Affairs has already struck off more than 2.24 lakh companies that have not been doing business for long and has disqualified over three lakh directors associated with such entities. Against this backdrop, Corporate Affairs Secretary Injeti Srinivas said things are being simplified for legitimate businesses while checks are being strengthened against illegal business activities.
  • Government tightens screws on assets owned by deregistered companies
    Oct 27, 2017
    The corporate affairs ministry today asked states to complete identification of properties owned by deregistered companies at the earliest and ensure district administrations prevent transactions in those assets. Amid intensifying efforts to fight the black money menace, the ministry has also urged the states to initiate disciplinary action against the officials concerned in case such transactions go through.The names of around 2.25 lakh companies which have not been carrying out business activities for long have been struck off the official records and a number of directors associated with such firms have been disqualified.
  • Govt wants early warning system on shell companies: How it will work
    Sep 29, 2017
    The ministry of corporate affairs (MCA) says work has begun for an "early warning system" regarding shell companies.The term is used to refer to a company without active business operations or much of assets. This by itself isn't illegitimate but they could be used as a manoeuvre for financial operations of a suspect or illegitimate nature. Currently, there is no way to check shell companies systemically, an official said.
  • 200,000 more directors disqualified for holding posts in defaulting companies
    Sep 25, 2017
    The corporate affairs ministry has disqualified another 200,000 directors for holding posts in defaulting companies that have not filed their financial returns for the last three years or more, taking the total number to over 300,000, while cancelling the registration of another 10,000 companies. These directors won’t be able to hold board seats in other companies as well and may have to resign soon from them, potentially impacting other firms as well. While the current law does not provide for any appeal, the government is thinking of exercising “the review power to take any such plea into consideration,” PP Chaudhary, minister of state for corporate affairs, told ET. “By operation of law, these directors are disqualified but we have to see under what provision of law we can examine this. If we need to frame a rule we will do it.”
  • Over 100,000 shell firm directors disqualified for five years
    Sep 13, 2017
    In a fresh crackdown, the Ministry of Corporate Affairs has disqualified 106,578 directors for their association with shell firms. This comes just a few days after bank accounts of around 200,000 shell companies were frozen. The directors identified for disqualification would not only be debarred from their respective boards but also from other companies for five years. It is learnt that more directors are under the scanner. Last Wednesday, the ministry had said a decision had been taken to blacklist 300,000 directors of shell firms.The ministry has said action would also be taken against some members of the Institute of Chartered Accountants of India (ICAI), Institute of Company Secretaries of India (ICSI), and other associations involved with these shell companies. These institutions have been told that they are being monitored.
  • India Inc top deck pays the price for delay in changes to Companies Act
    Sep 12, 2017
    Well-known current and former CEOs of some key Indian blue chips lead the list of people whose revised compensation packages have been delayed for the past three years as government approval is pending due to existing provisions of the Companies Act. Guenter Butschek of Tata MotorsBSE 0.49 %, Anand Kripalu of USL, and S Raghunandan of Jyothy Labs are some of the CEOs who are yet to be paid in full. Provisions of the Act stipulate low limits on salaries for CEOs of loss-making companies while inclusion of stock options under CEO compensation prevent profitable firms from doling out automatic hikes. Many firms with none or low profits are unable to attract top talent for turnaround roles owing to the inability to execute Esop plans.
  • Shareholders can play spoilsport for lenders banking on resolution plan
    Aug 29, 2017
    Amid the euphoria over Bankruptcy Code and hopes of turning around debt-ridden companies, many lenders have overlooked a simple, yet crucial, caveat. Almost all significant decisions — such as offering preference shares to infuse funds into a defaulting company, selling properties and assets, floating convertibles, and declassifying the promoter following a dilution of shareholding - have to be approved by shareholders of the company in question; and some key decisions have to be cleared by a special resolution, requiring the support of 75% shareholders.
  • Now, SFIO has powers to arrest people for violations of companies law
    Aug 28, 2017
    The Serious Fraud Investigation Office (SFIO) now has powers to arrest people for violations of companies law, with the government notifying relevant provisions amid the crackdown on illicit fund flows. The shot in the arm for the probe agency also comes at a time when the government is cracking the whip on suspected shell companies being used for illegal activities, including money laundering and tax evasion.While the Companies Act, 2013 provides powers of arrest to the SFIO, which comes under the corporate affairs ministry, the provision has been notified only now.Most provisions of the Act came into force on April 1, 2014.The SFIO is a multi-disciplinary organisation having experts for prosecution of white-collar crimes and frauds under the companies law.The ministry has notified the rules pertaining to arrests in connection with Investigation by the SFIO and they came into effect from August 24.
  • Centre to amend cost audit rules under companies law
    Aug 14, 2017
    The government will amend the cost audit rules under the companies law in order to ensure parity between financial and cost records.The amendments have been mooted pursuant to implementation of the Indian Accounting Standards (Ind-AS), which converges with global accounting norms.The Corporate Affairs Ministry, which is implementing the Companies Act, has come out with a draft of the proposed amendments to the Cost Records and Audit Rules.Various existing provisions under these rules, including some relating to intangible assets, will be done away with, while Ind-AS compliance will be required for certain other aspects. “Pursuant to implementation of Ind-AS, the Companies (Cost Records and Audit) Rules, 2014 are to be amended to bring parity between financial records and cost records,” the ministry said in a communication.Ind-AS is applicable for certain class companies from the current financial year (2017-18).
  • Government plans to amend norms for removal of independent directors: Arjun Ram Meghwal
    Jul 22, 2017
    The government plans to amend the regulations pertaining to independent directors under the companies law, amid concerns over the procedures followed in appointment and removal of such directors. In recent times, the role of independent directors has come to the fore in the context of corporate governance practices. “An amendment or otherwise to Section 169 would ensue after due process of consultation,” minister of state for corporate affairs Arjun Ram Meghwal said in a written reply to the Lok Sabha. Section 169 of the Companies Act, 2013 pertains to removal of independent directors.
  • Firms will now have to replace independent directors in 90 days
    Jul 13, 2017
    Companies will henceforth have to replace independent directors who resign or are removed from the Board within 90 days, against the earlier 180 days.The Corporate Affairs Ministry has altered the code for independent directors under Schedule IV of the company law to this effect.However, it has exempted government companies from seeking shareholders’ nod for appointing independent directors. Independent directors of government companies have also been exempted from the norm that required their re-appointment to be on the basis of an evaluation of their performance.In face, there won’t be a need for a performance evaluation of independent directors in government companies.Moreover, the independent directors at their separate meetings need not henceforth review the performance of non-independent directors, of the Board as a whole, or of the Chairman of the Board.In sync with SEBI norms Commenting on the development, SN Ananthasubramanian, Practising Company Secretary and former Company Secretaries’ Institute President, said this brings the Companies Act on par with the SEBI’s listing regulations.“This shorter time period of 90 days will enhance the cause of good governance in unlisted companies also,” he said.
  • Government to soon restrict layers of subsidiaries under companies law
    Jul 01, 2017
    The government will soon put in place restrictions on the number of subsidiaries a corporate can have under the companies law, as it steps up the fight against illicit fund flows. The provision, which provides for "layering restriction on investment subsidiaries" for certain class of corporates, is part of the Companies Act, 2013. However, the particular provision is yet to be implemented. In this regard, the ministry -- which is implementing the Act -- has now floated the draft norms for public consultations.
  • Govt prepares to strike off registration of over 2 lakh cos
    Apr 22, 2017
    The government plans to cancel the registration of more than two lakh companies that have not been carrying out business for a considerable period of time, amid stepped up efforts to tackle the black money menace. More than two lakh companies, spread across various states, have been served with show cause notices as they hThe Corporate Affairs Ministry's move also comes against the backdrop of overall efforts by the authorities to crack the whip on shell companies, suspected to be used for money laundering activities.
  • Sebi, Corp Affairs Ministry might tighten removal of independent director
    Jan 23, 2017
    The process followed in the removal of an independent director from the board of a company has come under review. According to sources, discussions are on between market regulator Securities and Exchange Board of India (Sebi) and companies watchdog Ministry of Corporate Affairs (MCA) whether the removal process should be brought at par with the reappointment process of an independent director—which is by way of a special resolution. Under Section 152 of the Companies Act, an independent director can be removed from the board of company through an ordinary resolution.
  • Companies Act to be relaxed for Gift IFSC ventures
    Jul 20, 2016
    The government is amending Companies Act to relax provisions for Gujarat Gift City's international finance centre. The amendments will relax compliance norms. The amendment bill is expected to be introduced in the ongoing Parliament session. Companies operating in Gift IFSC set up by Indians will not be considered foreign companies but these will be provided several operational freedoms. These companies will have flexibility in formation of their boards and on independent directors.
  • Company Law Tribunal benches ‘will be fully functional’ in next few days
    Jun 04, 2016
    All the 11 benches of the newly constituted National Company Law Tribunal (NCLT) will be fully functional in the next “couple of days”, a top Corporate Affairs Ministry (MCA) official said.Infrastructure is ready in all the 10 cities where the NCLT benches are being set up.
  • Corporate Affairs Ministry again extends statutory filing deadline amid MCA21 woes
    Jun 03, 2016
    Extending the deadline for the third time, Corporate Affairs Ministry has now given time till July 7 for companies to submit their statutory filings as issues related to MCA21 portal are yet to be fully resolved. MCA21 is used for making electronic filings under the Companies Act and is managed by Infosys for the ministry. The upgraded system went live in the last week of March and stakeholders have been facing issues in using the portal.
  • MCA21 woes: Government extends filing deadline for stakeholders
    Apr 16, 2016
    With stakeholders facing glitches in using the upgraded MCA21 portal, the Corporate Affairs Ministry has extended the deadline for submitting various filings without additional fee till May 10. MCA21, used for making electronic filings under the Companies Act, is managed by Infosys for the ministry. The upgraded system went live in the last week of March.
  • Company law set for a major re-write
    Feb 02, 2016
    The corporate law framework could see a significant change if a government-appointed panel’s recommendations are implemented this year.Sweeping changes with as many as 100 proposed amendments to the existing company law enacted by the UPA Government in 2013 have been suggested by the 10-member Companies Law Committee, which was set up in June 2015. Some of the significant suggestions include doing away with the need for government approval for managerial remuneration, specifying a pecuniary relationship threshold for directors (violation of independence) and removing the cap of layering of subsidiaries.
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