Incorporation of a New Companies under Companies Act 2013




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Things to do before Pre Incorporation of Companies

  1. At least 2 Promoters : Promoters are the persons who will Incorporate or promote the company , it may be individual or a body corporate.
  2. At least 2 Director : Directors are the persons who are responsible for the management of the company , it can be only Individuals , no Company /HUF/Partnership firm can be directors.Normally the directors and Promoters are same in Private Companies .
  3. The Director must have the DIN number alloted by MCA and atleast one director must have the Digital Signature for Digital signing of the E forms which would e submitted to ROC.
  4. STEP 1 NAME APPROVAL

RISK MANAGEMENT POLICY AND COMMITTEE – NEED, PURPOSE & APPLICABILTY

The term Risk may be defined as the possibility that an event will occur and adversely affect the achievement of the Company’s objectives and goals.

Risk management is a structured, consistent and continuous process, applied across the organization for the identification and assessment of risks, control assessment and exposure monitoring. It is the culmination of decision taken to improve corporate governance. The Organizations that actively manage their risks have a better chance of achieving their objectives and preventing major problems occurrence in the Company.
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Risk management policy is policy text containing the element of risk, sources of risk, probability, if any in the Company and the measures to overcome it. The very purpose of framing such a policy is to keep ready to deal with any kind of risk being faced by the Company in future. Obviously one can’t avoid it all together but it is possible to reduce its intensity by undertaking various measures.

The process of risk management consists of four logical and sequential steps:

  • Identification of risk;
  • Evaluation/measurement of risks;
  • Handling of risks and
  • Implementation of risk management decisions.

 

The new Companies Act made it mandatory to form such a policy and to disclose its contents along with the details of the Risk management Committee if any, in the Board’s report. Section 134 of the act enumerates the various disclosures which are required to be made in the Board’s Report and the risk management policy is one of them. As Section 134 (4), clause (n) requires the disclosure regarding risk management policy in the following words:

A statement indicating development and implementation of a risk management policy for the company including identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the company.”

Also the revised clause 49 (VI)(C)of the listing agreement mandates the constitution of a Risk Management Committee. The Board shall be responsible for framing, implementing and monitoring the risk management plan for the company. The Board shall also define the roles and responsibilities of the Risk Management Committee and may delegate monitoring and reviewing of the risk management plan to the committee and such other functions as it may deem fit.

Thus it is concluded that the report of Board of Directors of every company must include a statement regarding indicating the development and implementation of risk management policy and for the Listed companies to constitute a committee for the risk management.

 



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SS-1

MEANING



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Secretarial Standards are the policy documents relating to various aspects of secretarial practices in the corporate sector. These Standards lay down a set of principles which companies are expected to adopt and adhere to, in discharging their responsibilities.

 

SS-1 prescribes a set of principles for convening and conducting Meetings of the Board of Directors and matters related thereto.

 

APPLICABILITY

SS-1 is applicable on the:

  • Meetings of the board of all the companies
  • Meetings of the committees (s) of the board, unless otherwise stated

Note: This standard is applicable on all the companies incorporated under the companies act w.e.f 1st July, 2015 except One Person Company (OPC) in which there is only one Director on its Board.

 

SUMMARY AT GLANCE !!!!

  • The chairman may adjourn the meeting for any reason, at any stage except when objected or dissented by majority of directors.(pt 1.1.2)
  • Every meeting and items thereof shall have serial no. and meeting can be convened on any time or place, day except a national holiday.( pt 1.2)
  • Directors can attend through electronic mode if such facility is provided, notice should specify, if such mode is provided. (Pt.1.3)
  • Minutes shall be maintained separately for board meetings and each for each of its committees. Notice, agenda, notes to agenda should be sent atleast 7 days before the date of meeting by CS or any authorized director.(Unless longer time is given in articles)
  • Frequency: There should be 4 Board Meeting in each calendar year, maximum interval 120 days between 2 meetings and.(pt 2.1)
  • Quorum: shall be 1/3 rd of total strength or 2 whichever is higher.( 3.4)
  • Attendance register: shall be maintained at the Registered Office of the company or such other place as may be approved by the Board, open for inspection.( 4.1) authenticated by CS and kept in his custody.
  • Minutes shall state serial no., type of meeting name of the company, day, date, venue and time of commencement and conclusion of the Meeting.( 7.2.1)
  • Minutes shall record the name of the director present in alphabetic order, or in any other logical manner, CS and name of the invitees along with capacity in which they attended.
  • Any document etc. if placed in the meeting and referred in the minutes should be initialed by the CS or chairman. Where any resolution has modified or superseded the previous one it should refer the previous resolution.
  • Draft minutes shall be circulated to the directors within 15 day of the meeting by specified mode for their confirmation thereof. ( 7.4.)
  • Entry and alteration: it shall be entered in the book within 30 days of the meeting, the date of such entry shall be recorded by CS or any authorized director. Alteration is not permissible except by way of express approval of the board.( 7.5)
  • Signing and Dating of minutes: Minutes shall be signed by chairman of the meeting or of the next meeting. All the pages shall be initialed and last page is to be signed and dated along with the place of signing.
  • Minutes once signed cannot be modified except otherwise provided and a copy of it should be certified by the CS or by any director authorized by the board and the same shall be circulated within 15 days of signing ,to all the directors.( 7.6)
  • Inspection and Extracts of Minutes: any director, Auditor(s)-statutory, secretarial and cost auditor can inspect it. Members are not allowed to inspect it.[ Directors can inspect the minutes of period before their directorship or even after cessation of directorship for the period of his directorship-both forms electronic or physical] (pt 7.7.1)
  • Extract of any resolution can be taken only after its entry into the minutes book however certified copy of any resolution can be taken even before it, if the text of that Resolution had been placed at the Meeting.(pt 7.7.2)
  • Preservation :The Transferee Company shall maintain the minutes(physical or electronic form with timestamp)of the Transferor company permanently.(pt 8.1)
  • The Transferee company has to maintain the copy of notices, agenda and notes to agenda of the Transferor Company as long as they remain current or for 8 years whichever is later and can destroy them thereafter with the permission of the board and central govt. , if required.(pt 8.2)
  • Disclosure in the annual return and report about the number of meeting of the board and the committees in a financial year and no. of meetings attended by each director. (pt. 9)

Loans from Relative of Director would not be counted as Deposits for Private Companies…



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MCA vide notification dated 15th September, 2015 amended the Companies(Acceptance of Deposits) Rules, 2014 by Companies (Acceptance of Deposits) Second Amendment Rules, 2015.

The said amendment has included the relative of the director in the list of exclusions of deposits in case of Private companies, now the relative of director of private company can also give loan to the company out of his/her own funds. This is a major change which was a big concern for the private companies as with the new act the private companies were not allowed to accept money from the relatives as those were being considered as deposits and private companies were not allowed to accept deposits.
The other change that is being brought by the amendment is that it has increased the limit in various sub rules of rule 3 of Companies (Acceptance of Deposits) Rules, 2014 (which is mainly in relation to  accepting or renewing the deposits) by including the share premium amount with the “Paid-up share capital, free reserves”, now the share premium would also be counted in the limits as specified in the sub rules.
        Following is the bare text of effects of the aforesaid amendment:
  1. In rule 2(1)(c), for sub-clause (viii), the following shall be substituted, namely:-
  “(viii) any amount received from a Person who, at the time of the receipt of the amount, was
     (i)  a director of the company, or
     (ii) a relative of the director of the Private company,subject to submission of a declaration to the effect that the amount is not being given out of funds acquired by him by borrowing or accepting loans or deposits from others and the disclosure of the  details of money so accepted  by the Company in its board’s report.”
 2. In the original rules, in rule 3, -
 (a)for the words “paid-up share capital and free reserves”, wherever they occur, the words “Paid-up share capital, free reserves and securities premium account” shall be substituted;
 (b) in sub-rule (8), in the Table, for item (e) and entries relating thereto the following shall be substituted, namely:
 “(e) Brickwork Ratings India Pvt Ltd (Brickwork) BWR FBBB”
The above amendment will be proven fruitful for the Private Companies as the funds can be arranged much easily.

Annual Return FORM MGT-7 all contents are here so better Plan In Advance…



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MCA has introduced new Form MGT-7 for filing annual return. This form features a less complex form than earlier form, carrying almost the same information. MCA is trying hard to make compliances easy. This new form is a step forward in making compliances simpler.

What info to be given in revised form MGT-7?
  1. Registration and other detailsCIN & Basic Information of the Company, Type of company, Financial Year, & AGM details etc. are to be provided.
  2. Principal business of the company:Information related to business of the company like no. of business activities, main activity group code, description of main activity group, business activity code, description of business activity and % of total turnover of company are to be filed.
  3. Particulars of holding, subsidiary, joint ventures and associate companiesUnder this, details of holding, subsidiary, joint ventures and associate companies along with % of shares needs to be given.
  4. Share capital, debentures and other securities of the company: This heading requires information regarding break up of share capital with face value, authorised, issued, subscribed and paid up capital, details of shares/debentures transfers since closure date of last financial year, Indebtedness including debentures outstanding at the end of financial year, debentures details and other securities.
  5. Turnover and net worth of the company: Total turnover and net worth of the Company are to be mentioned.
  6. Shareholding Pattern:In this heading information in relation to number of shares & % of shares held by Promoters, Public and Foreign Institutional investors’ needs to be mentioned.
  7. Number of promoters, members and debenture holdersThis bracket deals with any change in the number of promoters, members and debenture holders during the year.
  8. Details of directors and key managerial personnel: Composition of Board of directors, and details of Directors & key managerial personnel to be specified.
  9. Meetings of members/class of members/board/committees of the board of directors:Details regarding various meetings of the Company and attendance of directors in those meetings are given.
  10. Remuneration of directors and key managerial personnel:Details regarding remuneration of Managing Director, Whole Time Director, Manager, CEO, CFO, and Company Secretary and other details are to be entered.
  11. Matters related to certification of compliance and disclosures: Needs to give the certification for all the compliances and disclosures made during the year.
  12. Penalty and Punishment: Details of penalties and compounding of offences needs to be specified, if there is any. In case of no penalty & compounding, simply select NIL for this.
  13. Complete list of shareholders, debentures holders enclosed as an attachment :Needs to specify whether the list of shareholders, debenture holders enclosed as an attachment or not.
  14. Compliance of subsection (2) of section 92, in case of listed companies: This point requires Details of Company Secretary in practice certifying the Annual Return in from MGT-8, in case of a listed company or a company having paid up share capital of Ten Crores rupees or more or turnover of Fifty Crore rupees or more.
  • E form MGT-7 will be soon available on MCA, till it’s not made available you can refer to the points mentioned above to prepare yourself regarding information to be filed in the form.

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Impact of Notifications dt 04/09/2015

 

MCA vide Notifications dated 4th September, 2015 has brought some changes, which are as follows:



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  • Notification regarding sub section (6) of section 129 of the Companies Act, 2013 (18 of 2013) which is in relation to Power of Central Government to exempt certain class of companies hereby exempt Government companies producing defence equipments including the space research to file Additional Information of the general instructions for the preparation of statement of profit and loss in Schedule III (General Instructions for preparation of balance sheet and statement of Profit and Loss of a company) of Companies Act , 2013 subject to fulfilment of certain conditions.
  • Notification regarding sub section (1) of section 467 of the Companies Act 2013 (18 of 2013) the following changes have been made :
    • ​​Alteration in Schedule III in Part I Balance sheet under the heading “Equity and liabilities” for the term trade payables the following shall be substituted :
      • Trade payables :
      • Total outstanding dues of micro enterprises and small enterprises.
      • Total outstanding dues of creditors other than micro enterprises and small enterprises.
    • Addition of five points have been inserted in Notes which is in relation to Micro, Small and Medium Enterprises.
  • Companies (Accounts) Second Amendment Rules, 2015. have been introduced after further amending the Companies (Accounts) rules, 2014
​                   This notification brought the following changes:
  • MCA has released the contents of the much awaited forms
AOC -4 [Earlier Forms 23 AC & 23 ACA]
Form for filing Financial Statements & other documents with the Registrar
&
AOC – 4 CFS [Earlier Forms 23 AC & 23 ACA]
Form for filing Consolidated Financial Statements & other documents with the Registrar,
With certification by CA/CS/CMA.
  • Term “Indian Accounting Standards” will have the same meaning as prescribed in rule 3 & annexure to the Companies (Indian Accounting Standards) Rules, 2015.
  • Financial Statement shall be prepared in the form specified in Schedule III to the Act and also required to comply with the Accounting Standards or the Indian Accounting Standards.
  • The requirement of furnishing information & details as per rule 8(3) of Companies (Accounts) Rules, 2014 shall not be applicable to Government Company engaged in producing defence equipment.
  • Notification regarding sub section (6) of section 129 of the companies Act 2013 (18 of 2013)

 

 

A Quick guide for Form MGT-15

What is MGT-15?



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Form MGT-15 is required to be filed pursuant to section 121(1) of the Companies Act, 2013 and Rule 31(2) of Companies (Management and Administration) Rules, 2014 which are reproduced for your reference.

Section 121(1): Every listed public company shall prepare in the prescribed manner a report on each annual general meeting including the confirmation to the effect that the meeting was convened, held and conducted as per the provisions of this Act, the rules made thereunder  & applicable Secretarial Standard thereon.

Rule 31(2): The copy of the report prepared in pursuance of sub-section (1) of section 121 and sub-rule (1), shall be filed with the Registrar in Form No.MGT-15 within thirty days of the conclusion of the annual general meeting along with the fee.

On whom is it applicable?

LISTED COMPANIES

What information is required while filing MGT-15?

The essentials that needs to be kept in mind while filing MGT-15

  1. Details of the meeting.
  2. Whether chairman of the meeting appointed and name of the chairman.
  3. Number of members attended the meeting.
  4. Whether the requisite quorum is present.
  5. Business transacted at the meeting and result thereof .
  6. Particulars with respect to any adjournment or postponement of meeting and change in venue, if any;
  7. Other Details.

Penalty:

If the company fails to file the report under section 121(2) before the expiry of the period specified under section 403 with additional fee, the company shall be punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees,

AND 

every officer of the company who is in default shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees.

We at mycompaniesact.com have made efforts for the automation of the major provisions and procedural part of Companies Act 2013, we would be giving a online platform to the users to prepare and maintain the documents , Reports , Director Report and ROC Forms  for their respective companies.

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An overview of annual compliances by an OPC



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The new act brought so many advances & Introduction of a One Person Company (OPC) is proving to be a boon for so many of us. This Revolutionary Concept is
a step forward to facilitate more business friendly corporate regulations in India.
As the earlier provisions demanded that if a person wants to set up a private
company; one hasto have another person as the previous law demanded
as per the concept of minimum two shareholders. But, now with the new advance
version of the act- the conceptof an OPC allows ‘one person’ to enjoy all
the benefitsof a Private Ltd Company all alone; which basically entitles ‘one person’ to have access to credits, bank loans,legal protection etc. all under
 the heading of a separate legal entity.
What is an OPC?
One Person Company is defined in Sub- Section 62 of Section 2 of The
Companies Act, 2013, which reads as follows:
Only a natural person who is an Indian citizen and resident in India­­-
– shall be eligible to incorporate a One Person Company;
– shall be a nominee for the sole member of a One Person Company.
The term “resident in India” means a person who has stayed in India for a period
of not less 182 days immediately proceeding one calendar year.
ANNUAL COMPLIANCES BY AN OPC
  1. Section 184(1) states that Every Director of the Company in First Meeting of the Board of Director in each Financial Year will disclose his interest in other entities in Form MBP-1, & whenever there is any change in his interest then a fresh MBP-1.(But no need to file it to the Roc).
  2. Section 164(2) states that Every Director of the Company in each Financial Year will file disclosure of non-disqualification under Form DIR-8 with the Company.
  3. Section 173 states, an OPC shall hold a minimum number of Two Meetings of its Board of Directors every year in such a manner that Minimum gap between both the Meetings, should be not less than 90 (Ninety) days.
  4. Section 134 states that Directors’ report shall be prepared by mentioning of all the information required for One Person Company under Section.
  5. Section 137 states that Company is required to file its Balance Sheet along with statement of Profit and Loss account and Directors’ Report in E-form AOC-4. Balance Sheet, Statement of Profit & Loss account, Directors’ Report.
  6. Section 92 states that OPC will file its Annual Return in E- Form MGT-7 within 60 days of entry of ordinary resolution in Minute Book. Annual Return will be for the period 1st April to 31stMarch. In Case of OPC, there is no need to hold AGM.
  7. Section 139 states, Auditor will be appointed for the 5 (Five) year and form ADT-1 will be file for 5-year appointment. After that every year in AGM, Shareholder will ratify the Auditor but there is no need to file ADT-1.
  8. Section 136 states, Company shall send to the Members of the Company approved financial statement, Directors’ report and auditors’ Report at least 21 clear days before the date of AGM.

 Acts & Rules

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Forms

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Dashboard

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“STATUTORY REGISTERS”- why & how to maintain …?



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The Companies Act, 2013 requires every company to maintain statutory records in the form of Registers & Minutes. Companies under the old Act were maintaining the same in physical form, however Rule 27 of Companies (Management and Administration) Rules, 2014 in the Companies Act, 2013 has changed the picture totally, prescribing for compulsorily preparation of Registers in Electronic form for listed companies and a company having not less than 1000 shareholders, debenture holders and other security holders.
Moreover other companies can also choose either to maintain records in physical or electronic form.
It also prescribes certain formats in which these registers are to be maintained, important ones are as follows:
  1. REGISTER OF MEMBERS (MGT-1)
  2. REGISTER OF DEBENTURE HOLDERS /OTH. SECURITIES HOLDERS (MGT2)
  3. REGISTER OF RENEWED AND DUPLICATE SHARE CERTIFICATES.(SH-2)
  4. REGISTER OF SWEAT EQUITY SHARES   (SH-3)
  5. REGISTER OF EMPLOYEE STOCK OPTIONS (SH-4)
  6. REGISTER OF SHARES OR OTHER SECURITIES BOUGHT-BACK (SH-10)
  7. REGISTER OF CHARGES (CHG-7)
  8. REGISTER OF LOANS, GUARANTEE, SECURITY AND ACQUISITION MADE BY THE COMPANY (MBP-2)
  9. REGISTER OF INVESTMENTS NOT HELD IN ITS OWN NAME BY THE COMPANY(MBP-3)
  10. REGISTER OF CONTRACTS WITH RELATED PARTY(MBP-4)
  11. RECORD OF PRIVATE PLACEMENT(PAS-5)
  12. REGISTER OF DEPOSIT ACCEPTED/ RENEWED
  13. REGISTER OF DIRECTORS & KMP AND THEIR SHAREHOLDINGS

As we are aware of the fact that the world is moving towards a paperless system thus, the makers of the Companies Act, 2013 have also initiated a step towards it by allowing companies to maintain these registers electronically. We atmycompaniesact.com have made efforts for the automation of the statutory registers wherein we would be giving a online platform to the users to prepare and maintain the registers under the new act in electronic form for their respective companies.

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Director Report ,

AGM Documents,

Annual Return ,

Depreciation chart.

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Forms

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